Using these sources and your own knowledge, explain why, despite wide-ranging debt cancellation, the Third World debt crisis has not been solved.
Source K
The Third World debt crisis is another issue that remains unresolved. It is three decades since the Third World debt crisis began, yet there is still no fully adequate mechanism for enabling indebted countries to work-out their debts. Arrangements negotiated through the Paris Club often require that indebted countries adopt an IMF-approved structural adjustment strategy, yet they are obliged to base their projections on excessively optimistic assumptions about growth that give them very little debt relief. This is partly the result of the inadequacy of the resources which poorer developing countries are able to mobilize, either internally or through external, concessional assistance.
Source L
Years after debt campaigners succeeded in persuading the International Monetary Fund (IMF), World Bank and G8 to abolish debts worth billions of dollars owed by developing countries, figures show total external debts are once again on the increase.
Data in the World Bank's global development finance 2012 report ... shows total external debt stocks owed by developing countries increased by $437bn over 12 months to stand at $4tn at the end of 2010, the latest period for which data is available.
The global financial crisis has focused attention on the debts of the rich west. The US had gross external debts (those borrowed from foreign lenders including commercial banks, governments, individuals or international financial institutions) of $14.3tn (95% of GDP) in 2010, while those in the European Union had swelled to $13.7tn (85% of GDP) and the UK owed $9tn (400% of GDP).
But in the case of richer countries, these gross debt figures are balanced by debts owed to them by other countries. Tim Jones, policy officer at the Jubilee Debt Campaign (JDC), said: "As well as owing large debts, countries such as the US and the UK also have large debts owed to them. Most of the debt owed by and to the UK is through banks, rather than the government. Taking account of debts owed to the UK, whether to the government or private sector, external debt is around 20%. This is lower than many developing countries, as well as EU members such as Ireland and Spain."
It is not the same for the poorest countries, which do not own valuable assets overseas - although it should be noted that 40% of the total external debt stock is accounted for by the so-called Bric group consisting of Brazil, Russia, India and China.
The JDC says debt is "still a huge issue" for developing countries, which have been hit hard by the financial crisis. Exports have crashed, nationals working overseas have less money to send home, and multinational companies scale back costs and investment. The JDC estimates that the current $4tn of external debts owed by developing countries costs them more than $1.5bn a day in repayments - and $34m of that comes from the very poorest countries.
A major chunk of the debt owed by 32 countries, mostly in sub-Saharan Africa, was eliminated by the heavily indebted poor countries (HIPC) initiative of the World Bank and IMF, which was reinforced by the G8's 2005 multilateral debt relief initiative (MDRI).