Question

Discuss three ways through which the debt regime rules and restructuring of social economies reversed the development project.

Answer 1

Answer:
Three ways through which debt regime rules and restructuring of social economies reversed development project in following ways:

• Earlier taking debt for expanding the economies used to be considered bad, but after debt regime rules and restructuring of social economies taking debt to increase the growth rate to achieve desired result much faster than earlier projected time is considered better. And the same is being followed by most of the developed countries be it US, China or Japan.
• As long as development rate is maintained these economies gets debt at very low rates, and sometime to maintain the desired growth they even take further loan to maintain the growth rate which may be harmful in long run but shows desired result in short run.
• As this debt regime and restructuring is so much dependent on growth and its increase in growth rate which justifies such a huge debt that these countries need to show development even during the phase of expansion or development where growth rate should subdue. Earlier when debt regime was not there during expansion or development phase growth rate use to be less and it used to increase post development but now its always increasing due to debt cycle, which may get burst if not shown as increasing.

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