Developing nations took on large debts to modernize, but now spend most new borrowing on interest payments rather than development. In 2005, some developed nations began providing grants instead of loans to the poorest countries to relieve this debt burden. Foreign aid comes in both economic and military forms and is given by wealthier nations, like the U.S., to support other countries through organizations like the World Bank, IMF, and WTO.

2. • A major problem for developing
nations is DEBT PAYMENT
• Developing nations had to borrow
large sums of money to modernize and
industrialize

3. • These nations continue to borrow millions of
dollars a year. Most of this money goes to buy
food and medical care, and to pay the
INTEREST on the loans.
Interest Payments
are a heavy burden
on the borrowing
nations

4. • In 2005, a group of 28 developed nations
agreed to give grants of money to the very
poorest nations rather than loans. Loans
were forgiven and they do not have to pay
them

5. • This money grants are part of what is called
FOREIGN AID
• FOREIGN AID is economic and military
assitance given by one nation to another

6. • After World WAR II, The Marshall Plan, was
one of the first U.S. foreign aid programs.
• Since them U.S. has contributed more than
$460 billion in foreign aid

7. • Today U.S. is the second largest contributor or
foreign aid in the world, Japan ranks first.

8. INTERNATIONAL
ORGANIZATIONS

9. WORLD BANK
(International Bank for Development and
Reconstruction)
• The UN founded the
World Bank in 1944 to
lend money to member
nations:
• Investment
• Foreign trade
• Repayment of Foreign
Debts
• It provides about 10% of
World’s Foreign Aid

10. IMF
(INTERNATIONAL MONETARY FUND)
• 1945
• Agency of UN
• Promote economic
cooperation among its
184 member nations
• It works to set
exchange rates for their
money
• Expand trade

11. WTO
(World Trade Organization)
• 1995
• International Trade
agreements and rules
violations by memeber
nations
• 148 members including
all the major nations of
the world