Debt relief

Debt relief cancels or reduces debts. A government making large loan repayments has less money available for services and infrastructure. Reducing those repayments can release funds for development.

Debt relief reduces or cancels money owed. Some developing countries borrowed heavily during the 1970s and 1980s and subsequently struggled with repayments and interest. Reducing these payments can release money for services and development projects rather than debt repayment.

Three important connections are international trade, investment by transnational corporations (TNCs), and international aid or debt relief. They work differently: trade earns income by selling goods and services; investment finances business activity; aid provides assistance; and debt relief reduces repayment obligations.