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This money will certainly help to pay for a lot of rebuilding - schools, houses, hospitals and infrastructure. It will also pay for food, clean water and medicines.$393 BILLION!!!
But even though $3 billion sounds like a massive amount of money, it’s just a tiny fraction of the amount these countries owe.
WHAT IS DEBT?
Just to remind you, debt is an amount of money that is owed. The debts of the world’s poorest countries are huge. And the 12 countries hit by the tsunami together have debts of as much as $393 billion.
The worst hit country, Indonesia, has the biggest debt of all these countries, owing as much as $132 billion. Thailand has debt of $59.2 billion, while Sri Lanka owes $9.6 billion.
THE WORLD BANK
They borrow the money in the first place from other governments through international organisations like the World Bank. But as with all debts, they have to try and pay back the money they have borrowed. That is very expensive and some countries can barely afford to do so. Some end up spending more on debt than on hospitals or schools.
Every day poor countries pay $30 million to the rich world to deal with their debts.
There are many who want governments in the rich world to cancel some of this debt. Rock stars like Bono of U2 and Bob Geldof are campaigning for this, urging that it would be better if poor countries kept the money and were able to spend it on improving their own quality of life.
WORLD’S RICHEST
So far the world’s richest countries have agreed to cancel $100 billion of debt. Those hit by the tsunami will benefit from some of this, but over the rest of the year, you will see a lot more stories in newspapers or on television about trying to help all poor countries deal with their debt.
Dominic Dudley
Business Editor, New Media Age
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