Debt Crises in the Least Developed Countries (LDC) and the Impact of Essay

Debt Crises in the Least Developed Countries (LDC) and the Impact of the Debt Reforms in LDC - Essay Example This paper dedicated to the problem of the unsustainable external debt and its repayment in in the least developed countries (LDU), which is considered an impediment to their economic growth and development. The report by the UN found out that there is a high probability that any LDC that exports primary commodities has an unsustainable external debt and that there is a close association between falling and volatile commodity prices and unsustainable external debt. The debt problem of commodity-exporting LDCs is rooted in the low level of domestic resource mobilization, low rates of return on investment, the vulnerability to external shocks and slow export growth. For debt sustainability to be achieved, the rate of growth of exports must be greater than the rate of interest on outstanding debt. Although high levels of debt can depress economic growth in low-income countries, external debt slows growth only after its face value reaches a threshold level estimated to be about 50 percent of GDP. A major challenge LDCs face is ensuring that a reasonable resource level is allocated for debt servicing to avoid the risk of default and to maintain conducive relations for debt relief negotiations with its debtors Governments must make efforts to stabilize commodity prices, perk up their levels of domestic resource mobilization, increase rates of return on investments and raise export growth, and finally protect themselves from external shocks. Debt reform not only includes maintaining a manageable level of debt but also decreasing corruption incidence in LDCs, allocating a reasonable resource level for debt servicing to avoid the risk of default, without sacrificing than they can afford to invest in basic health care or education.

Conspicuous consumption Research Paper Example | Topics and Well Written Essays - 3750 words

Conspicuous consumption - Research Paper Example Tastes and preferences were the principal determinants for the purchase of lavish goods. Exceptionally luxurious products that maintained good quality where desired more. Income did not have a bearing on the decision to purchase luxurious goods, as many people were not fascinated by the price of goods. The Chinese middle class engage in conspicuous consumption so that they can maintain a high standing in the society. They are more westernized and stylish thus seeking to be more exceptional than the other Chinese. Recently, China has witnessed a steady annual growth rate of 10%. This rise has propelled China to an economic powerhouse in less than three decades. Because of China’s rise, approximately 500 million people were raised above the poverty line (Frith, 2010). The middle class did not only resort to unfeasible high-end lifestyles but also changed from a saving to a spending culture. Conspicuous consumption is more pronounced in China because it has a relatively high number of young millionaires. Chinese millionaires lie at the age of 39 years being younger than their international peers are. These millionaires consume luxury goods in order to maintain their professional relationships and high social ranks (Dorothea, M2011). Chinese people are known for bragging in society through ownership of luxurious commodities. They greatly value success, wealth, and social status through displaying expensive watches, jewelry and cars to gain respect from the commoners. Chinese ‘little emperors’ are also an important factor contributing to conspicuous consumption of luxurious goods in China. These young consumers are a result of the one child policy that was adopted in the 1970’s. Those born during that period are without siblings therefore being the focus of attention of parents (Dorothea, M2011). They were brought up as spoilt children who got what they wanted, when they wanted it. It is for this