Debt Reduction - GCSE Geography Definition

Debt reduction refers to strategies and processes implemented to decrease the amount of money owed by countries to external lenders, which can significantly impact their economic development. In the context of GCSE Geography, this is particularly relevant to developing countries that often have high levels of debt that hinder their ability to invest in essential services such as healthcare, education, and infrastructure. Debt reduction can be achieved through various means including debt forgiveness, where the lender cancels part or all of the debt, or debt restructuring, where the terms of the debt are modified to make repayment more manageable. This process is crucial in enabling countries to allocate more resources towards sustainable development and improving the quality of life for their populations, thus reducing the dependency on financial aid from wealthier nations.