How have developed countries and international financial institutions responded to the escalating debt of many developing countries during the 1990s and even through today?

Question

Quizplus · Accepted Answer

Developed countries and international financial institutions have responded to the escalating debt of many developing countries by canceling large amounts of debt. This has been done through initiatives such as the Heavily Indebted Poor Countries (HIPC) and the Multilateral Debt Relief Initiative (MDRI). The cancellation of debt helps reduce the burden on developing countries and allow them to use resources for other development projects. While higher interest rates and cuts in spending have been suggested, debt cancellation has been the most significant measure taken by developed countries and financial institutions. The formation of regional trade agreements may also be helpful in reducing debt in the long term, but it is not the primary response to the issue of escalating debt.

How Have Developed Countries and International Financial Institutions Responded to the Escalating