Why Third World developing countries will remain in debt


Before we answer this question, it is important to look at who referred to these countries as “Third World” and “Developing” & the reasons for such a tag. Next, we need to look at how these nations fell into debt and finally why they cannot ever think of coming out of debt.

How did Developing Countries become “Developing Countries”

All of the developing countries were one time colonized by the nations that call themselves “developed”. Their “development” was as a result of plundering these now “developing countries”. This is the sad truth.

The reply of most ignorants are – why can’t the developing nations become developed just as the present developed nations have. If only, it was this simple. Many have forgotten that alongside independence, these former oppressors set up international institutions, international laws and international systems to ensure they continued to indirectly rule over the nations that they once directly ruled. To facilitate this further they used their religion and education system to nurture a set of brown/black/yellow sahibs to carry forward their objectives locally on behalf of them.

Little attention has been paid to the manner that the former colonial rule, of close to 500 years completely erased the civilizational values/traditions/customs, socio-legal-political indigenous systems that prevailed, committing horrendous crimes that far exceeds those termed as war crimes and crimes against humanity in present context. None of these crimes have been accounted for while the perpetrators pretend to now be paragons of virtue. To add insult they are placing taglines like “human development index” and classifying countries into levels in order to ensure that the developed nations will keep them in limbo, shuttling them from one level to another or bringing their levels down if the nations don’t tow the line.

Having adopted scorched earth policy to kill people, livelihoods and livestock, polluted the environment in these former colonies, the developed nations are finding fault with countries for ‘unsafe drinking water’ ‘lack of hygiene’, ‘environmental hazards’ etc.

Having churned and promoting pornography and other social ills for profit, nations are being accused of not doing enough about sex trafficking, drug trafficking, prostitution etc.

Having created and trained/armed covert groups to rebel against nations, the developed world accuses developing nations of lack of law & order and violating human rights.

Having forced nations into exporting what is grown at home – developed nations accuse the developing of malnutrition and extreme poverty.

Having encouraged youth to rebel against the system – the developed nations are appalled at teenage pregnancy, school drop outs and psychological disorders among youth.

Having forced countries to cut down on state sponsored social welfare the developed nations accuse developing nations of poor healthcare, poor education and unemployment. A lot of hypocrisy is happening.

While developed nations directly deal diplomatically with developing nations exerting pressure from one front, the international institutions controlled by developed nations impose institutional regulations while the next biggest tool the UN ends up poking its nose into everything with impunity.

Bilateral & multilateral financial assistance are not really “assistance” – they have low interest & allow longer terms to settle but they come with stringing politicized conditions.

How much funds has UN got since inception – how much is their administrative costs & how much have they spent & on what since 1945 needs to be audited.

Yearly, the UN comes up with various initiatives (Millennium Development Goals/Sustainable Development Goals etc) and blueprints all of which are subtly attempting to dilute the national sovereignty and bring rule under the auspices of the UN and not too many nation states are realizing this.  The unfair and legally questionable manner UNHRC has been exerting itself over Sri Lanka vis a vis the issue of the LTTE is a case in point.

Defining Developed nations!

We are defining developed by the definition given by the developed nations but are these developed nations really ‘developed’? The US for example has shocking figures of people in poverty, living off food stamps, living in cardboard boxes on the road and these figures run into millions!

Bhutan’s happiness index is certainly a new wave to measure ‘development’. The reality is that these measurements and benchmarks cannot be dictated by the developed world and a different form of index that is not biased should take place – that measures health, poverty, happiness, compassion for humans & animals/environment, literacy & entrepreneurship etc.

Decolonization led to name-sake ‘independence’. The Global North that plundered Global South with impunity and pretended to give “independence” dictated how the newly independent nations could ‘develop’ – how and at what cost. Thus the new independent nations became once more victims of a new form of systematic exploitation. The international institutions that gave “loans with interest” and the international organizations that dictated “trade & diplomacy” ensured the developing nations could never exceed their boundaries. When “aid” is given with explicit requirement to cut down on state welfare measures – does it not inadvertently mean that the health, education and social conditions of a country declines, while expecting the same country to pay back the loan taken with interest & penalty is added for those not keeping to timelines? Is this money that is given as “AID’ not created money, churned from Western printing press which also controls the international trade currency?

Of course, with the manipulative international system it is natural that it would trickle down to tapping the local corrupt be they politicians, corporates, public sector or even individuals. The vogue nowadays is to subtly cripple the state apparatus and pass on to corporates/private sector in what is very much part of the global capital corporatocracy. As an example, while the Government has to take the flak for sub-standard medicines, how much of these medicines are being imported by private parties including doctors? When a natural disaster occurs, how many of the nations that jump to send food, actually send foods that are nearing shelf-life expiry making use of the opportunity to dump what they would throw to feed those in calamity?

Why are global issues like human/children trafficking, narcotics, arms & ammunition prevalent when they can be easily stopped? Is this a lucrative business and is this why there are only “controls” but never “closure”. Similarly, when 10 people can easily erase world hunger and accumulated wealth of the world’s 1% is the accumulated wealth of the world’s 99% – what does this say of inequality? How can the world promote “equality” with such glaring inequality? When sub-standard items are always sent to the Third World how can the quality of the Third World ever improve?

When neo-liberalism/capitalism is all about returning to the Third World as “investors” to plunder with machines what could not be done during colonial rule, is there any institutions to prevent such?

When water resources are being eyed knowing the future of water scarcity, governments and officials are silenced into “privatizing” water.

When food resources are also declining, once again governments & officials are silenced to export food and import foods that only wither the health conditions of the people.

When fertilizer mafia and genetically modified foods are promoted even by foreign governments as part of trade & diplomacy, how can countries grow foods that are not full of chemicals? How far has the soil of countries been destroyed by chemicals simply because a handful want to yield quicker harvest and as a result of their short-sighted profit-psychology, the world’s soil is being ruined.

If 892million (12% of the global population) is still defecating in the open (of which 678m live in 7 countries) – what is the development the world can boast of?

Is it not shocking that 1.4billion still live without electricity (OXFAM)


If the world is in decline, it is the nations that control the world who should be accountable as well as the international institutions that control & manipulate international order.

If the UN, IMF, WB, WTO and others have not produced anything that has changed the status quo of nations since these entities were formed in 1945 – what good is it to continue them even under different name if controlled by the same people?


Developed nations hold the tools to development

  • They use tariff protection
  • They use subsidies to their advantage
  • They define the laws & the justice

Conditions attached to bilateral & multilateral financial assistance

  • Developed nations do not give aid freely, they have strings of conditions that are kept secret from the people.
  • They may charge lesser interest and give longer period for repayment but this is nothing compared to the conditions they demand for that financial aid.
  • The greater the strategic value of a country for a developed nation, the greater the conditions imposed (Sri Lanka is a case in point)

The developed world has been giving “aid” to support developing nations economically, environmentally, socially & politically – where has the ‘development’ been? What is the scorecard from all of this ‘aid’ given?


How developed countries & the international institutions – IMF, World Bank, WTO control the Third World

  • To adopt “policies” beneficial to them
  • To change “laws” beneficial to them
  • To create “institutions” beneficial to them
  • WTO rules hardly favor developing nations. Tariffs and subsidies always favor the developed nations so how can developing nations become industrially developed?
  • All of the international institutions are based on western values only – they have completely disregarded Eastern civilizational values of true equity.

What good are economic policies by Third World if these policies and initiatives are subtly clipped by the Global North? The rich nations forget that they developed not by policies or international institutions or even democracy – they used tariff protection & subsidies most often unfairly. In fact the American Civil War was due to tariff more than slavery.

Most of the nation’s calling themselves “democratic” functioned worse than despots during their tyrannical rule of the nations they invaded & occupied. These atrocities come nowhere near those that they term war crimes, crimes against humanity, genocide etc. Going forward their systems were not without corruption. Elections meant vote fraud, corruptions in legislature, bureaucracy, nepotism were all piecemeals of “democracy” and prevails in Global North & South in different measures & global North owned media ensures the corruptions of the Global South gets wider international attention. Little attention is paid to the hijacking of intellectual property rights that have been usurped from Eastern civilizations for want of written evidence.

When the Global North plundered with impunity – laws, rules & regulations were one-sided and there was nothing called justice. Now, as they continue to rule post-colonial, they insist on laws, rules & regulations which they wish to dictate and decide. Of course, the fact that many public & private institutions have browns/blacks and yellows at the helm makes no major difference, as they are happy to carry out what the imperialists desire even if it impacts their own people. When the worlds central banks are all connected and influenced by a handful – how can sovereign nations decide the fate of their economy? When countries have been invaded because foreign companies wanted to manipulate world banana trade, what else is there to say? Leaders that were about to nationalize oil, gas etc were overthrown & replaced by dictators or brutally assassinated. These blueprints continue unabated.

None of the above is likely to benefit developing nations or ever bring them out of the rut they are in (either because of their own shortcomings but primarily as a result of the pressures from the developed countries to ensure they never come out of the rut) It is important to realize that no developing country that tries to change the status quo will get away or be allowed to do so – any nation or leader that tries to will be faced with an international condemnation campaign based on lies & propaganda or in worse case scenarios get eliminated. So not too many leaders wish to upset the applecart. This is the reality. The only way a sea change can happen is for all developing nations to come to a common platform & say – enough is enough that they have suffered enough & it is time their countries deserve better.

In such a context, how can developing nations “develop” beyond the levels “allowed” and with what conditions do they have to balance their ‘development” goals, having to always be aware that they have to remain enslaved to the global “good policies” and institutional dictates.

The developing nations have to take loans as these loans have to be paid back with interest to the global North & international institutions. The moment nations stop taking loans, the Global North will lose their “interest” both in terms of money & in terms of dictating to Global South. Therefore, when a people’s protests holds placards demanding the government goes to the IMF, it clearly gives a message.


It is good for readers to understand how the world works in reality!


Shenali D Waduge

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