What are the causes and impacts of debt vulnerabilities in developing countries?

Globally, debt vulnerability is a serious problem that negatively affects people's

lives and economies in many nations. Several factors contribute to debt vulnerabilities in
developing nations.

From an economic perspective, these countries are vulnerable to fluctuations in

global prices due to their reliance on commodity exports and inadequate fiscal
management. Weak institutional frameworks and political unpredictability make it
difficult to manage debt effectively. The problem of debt has numerous effects.
Exorbitant debt servicing costs discourage private and public investment, which slows
economic expansion. Besides that, austerity measures to manage debt often result in
reduced spending on healthcare, education, and social services, increasing poverty and
inequality.

In conclusion, addressing debt vulnerability is crucial for the sustainable

development of many developing nations. The economic reliance on volatile commodity
exports and poor fiscal management, coupled with weak institutional frameworks and
political instability, significantly contribute to these vulnerabilities.

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