This is a recent essay by a student that has been put online by UKEssays. They don't know who the student is because they lost the details, but it is a very good essay so they put it out anyway. The grammar needs tidying up as English is probably not the student's first language, but I liked the essay. It covers what I was trying to say about debt in another post but this goes into more detail. This is just an excerpt, there is a lot more on the site.
First of all, the article is studied about the IMF and World Bank offer the loan which consists of horrifying loan interest that cause the particular country unable to pay back the principle of the loan. Besides that, some country even cannot afford to cover the high interest rate charge by the IMF and World Bank. The loan that offered by the IMF and World Bank to poor country is considered as the debt trap because most of the countries made the IMF and World Bank loan is unable to pay back their debt. Besides that, the debt trap will limit the future earnings capacity because next generation needs to bear the loan if the past decade is unable to finish pay the debt.
Next is IMF and World Bank dominate the world's poor majority in developing and third world countries by using the economic growing reason to attract the lenders. After that, the loan sharks have hijacked the economies of more than 60 countries because of the loan agreement set by the IMF and World Bank. However, the capacity of the debt trap can claim all surplus production of a society. The compound interest caused most of the countries are unable to finish pay back the loan. The debt trap robs major surplus of the production in the whole society so that the particular country economic will not growth before they settle all the debt.
Due to the bad economic, an estimated 100 million children live and work on the streets in the developing world because they need to work hard to supplement their families' income in order to continue future life. Moreover, there are 25 million children live in the streets with other without family children. Basically, most of the young victims in debt trap countries force to be criminals in order to continue their life and some of them cannot survive due to the hunger pain and diseases because they no money to buy the medicine and find medical treatment.
Besides that, the indebted countries force to pay their debt interest by reducing the budget on the public facilities. In fact, most of the poor Africa countries spend most of the government budget on debt repayment instead of spending on healthcare and education and then the rich clients will more and richer after absorb debt repayment from the indebted countries. The consequences are some countries such as Keyans, Bostwana, South Africa and Zimbabwe citizens is died because of the HIV and AIDS infection spread very fast among each other due to the not enough money on medical treatment. The results are wealth people will be richer and poor countries will not able to repay their loan interest. However, five hundred billionaires in the world have too much wealth while around three billion people are considered as poverty. The fact is most of the income from the third world will go into the debt service payments and absorbed as banks profit so that the five hundred billionaires actually gained their profit from the poverty. An example in Nigeria debt was the government borrowed up around $5 million dollar but the amount was compounded to $16 billion only in one year period because of the high compound interest charge by the IMF and World Bank.