| Problem | Components |
|---|---|
| Policy issue area: | World |
| Policy issue: | Economy |
| Description: | Inability of less developed countries to repay/manage their huge debt load ($1.25 trillion). |
| Symptoms: | Hundreds of billions of dollars in loans are in danger of default; countries cut back imports from the United States and try to increase exports, causing loss of jobs (up to 1 million); global economic growth is slowing. |
| Causes: | World-wide recession; lagging/hampered world economic development. |
| Cost of problem: | - |
| Solution | Components |
| Resources: | International financial institutions; governments and financial institutions of industrialized countries. |
| Goal: | Provide assistance to Third World nations to restructure existing debt, and spur both recovery and expansion of their economy. |
| Program area: | World economic development |
| Program-remedy: | 1. World Bank or other supranational financial institution empowered to discount
bank loans in exchange for long-term bonds 2. Programs for exchanging debt for equity in local businesses 3. Debt forgiveness for the least viable economies. |
| Program-prevent: | Long-term program of world economic development strategy and aid. |
| Cost of program: | - |
| Beneficiaries: | Economies and populations of the less developed countries. |