Question

After a devastating earthquake hit Haiti in 2010, the economic leaders of the free world forgave Haiti's debt. Will this action likely hurt or help Haiti's development? Explain.

Answer 1

Ideally, economic debt forgiveness allows a developing nation to invest money in its people’s social welfare to improve areas such as healthcare and education rather than pay back loans that often were used corruptly by governments. Given the complete catastrophe of the Haiti earthquake and the country's severe poverty, this debt forgiveness hopefully will allow for a more rapid recovery from the devastation.