... for sanctions for the recalcitrant countries. Aside from debt relief or reduction, defaulting is one way of resolving the burgeoning problem of external debt. When these countries announced that they were no longer interested in paying their external debts that had grown into huge amounts and these compounded amounts have become extremely difficult to pay, several questions come to mind. How did these countries amass such debts that it could not pay? Why did the creditors allow the situation to balloon to such proportions? How would these unpaid debts affect the world economy in general? Despite the loan amounts being substantial, why had these countries remained destitute, if not poorer? The aim of this essay is in the ensuing sections, the discussion will focus firstly on the root causes of the third world debt. Secondly, there were several solutions proposed to reduce third world debt. Whether they were effective or not ...

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