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Scraped on 05/06/2025, 21:28:37 UTC
I would say your third point in your post, corruption is the main hindrance affecting developing countries concerning the issues of loans and bailouts.
Loans typically given out, comes with an interest attached. A country, having focused leaders with genuine plans to grow the country would take loans only when necessary and use them for it's intended use and not steal such funds for personal use.

When borrowed funds are embezzled, and it's intended use left unaccomplished, there is little option than to borrow again for that same project. And having little to no credit worthiness, financial institutions that give loans wouldn't be so willing to give such countries more loans.
Desperation sets in and in a bid to get more loans, deals are made. Deals that aren't favorable for the country taking the loan and putting the country into more debt than it could manage. The cycle continues leaving such countries dependant on loans and bailouts. How then could such a country grow?
Original archived Re: Some negative effects of foreign loans and bailouts to developing countries
Scraped on 05/06/2025, 21:23:48 UTC
I would say your third point in your post, corruption is the main hindrance affecting developing countries concerning the issues of loans and bailouts.
Loans typically given out, comes with an interest attached. A country, having focused leaders with genuine plans to grow the country would take loans only when necessary and use them for it's intended use and not steal such funds for personal use.

When borrowed funds are embezzled, and it's intended use left unaccomplished, there is little option than to borrow again for that same project. And having little to no credit worthiness, financial institutions that give loans wouldn't be so willing to give such countries more loans.
Desperation sets in and in a bid to get more loans, deals are made. Deals that aren't favorable for the country taking the loan and putting the country into more debt than it could manage.