The reason for slow growth rate and re-emergences of povertya)Earning ...
Foreign loan cause show the sovereign to our country and payment of high rate of interest and and such cause debt trap.
The reason for slow growth rate and re-emergences of povertya)Earning ...
Reasons for slow growth rate and re-emergence of poverty:
- Growing dependence on foreign loans: One of the main reasons for slow growth and re-emergence of poverty is the growing dependence on foreign loans. When a country relies heavily on foreign loans to finance its development projects, it can lead to a debt trap situation where the country struggles to repay the loans, resulting in economic instability and slow growth.
- Impact on economic growth: The burden of repaying foreign loans can divert resources away from productive investments, leading to slower economic growth. Additionally, the conditions attached to these loans, such as austerity measures and structural reforms, can further hinder economic development and exacerbate poverty.
- Negative effects on poverty: The cycle of borrowing to repay existing debts can create a vicious cycle of poverty, as the country may have to cut social spending and increase taxes to meet debt obligations. This can lead to a decline in living standards, increase in inequality, and a rise in poverty rates.
- Challenges for sustainable development: Dependence on foreign loans can also undermine a country's ability to achieve sustainable development goals, as it may prioritize short-term economic gains over long-term investments in areas such as education, healthcare, and infrastructure.
In conclusion, the growing dependence on foreign loans can significantly contribute to slow growth rates and re-emergence of poverty in a country. It is essential for policymakers to carefully assess the risks associated with foreign borrowing and develop strategies to promote sustainable economic growth and poverty reduction.
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.