Origins of the debt crisis. The debt crisis is rooted in the steady decline in the prices of poor countries' exported raw materials in relation to the prices for imported finished products, rising oil prices in the late 1970s, and irresponsible practices of creditors as well as debtor governments. The dimensions of the debt crisis. Most of this debt is owed to other governments and to international lending institutions such as the World Bank. The share of debt per person exceeds the annual income per person in these countries.
Most countries are unable to meet their scheduled debt payments.
The human impact of debt. To repay debt, governments shift scarce financial resources away from schools, health clinics, roads and other investments that promote human development. In Africa, governments are paying four times more to international creditors than they spend on education, health and nutrition. Current policy solutions are inadequate. Efforts to reduce debt have often been too small and often uncoordinated.