Uncertainty of development programmes due to short-term loans

The lack of symmetry between the long-term requirements of development and the short- to medium-term nature of commercial bank external financing places clear obstacles in the way of broad-based socio-economic development. Policy makers can confront the problem in a variety of ways, but in order to illustrate the gravity of the matter for a country that is heavily indebted to commercial banks, policy options can be simplified and reduced basically to two: (a) to focus development strategies on activities with high short-term private commercial rates of return and wait for social development to 'trickle down' to the population; or (b) to seek balanced socio-economic development today and hope that banks will refinance their short maturities.
Related UN Sustainable Development Goals:
GOAL 1: No PovertyGOAL 2: Zero HungerGOAL 3: Good Health and Well-beingGOAL 4: Quality EducationGOAL 5: Gender EqualityGOAL 6: Clean Water and SanitationGOAL 7: Affordable and Clean EnergyGOAL 8: Decent Work and Economic GrowthGOAL 9: Industry, Innovation and InfrastructureGOAL 10: Reduced InequalityGOAL 11: Sustainable Cities and CommunitiesGOAL 12: Responsible Consumption and ProductionGOAL 13: Climate ActionGOAL 14: Life Below WaterGOAL 15: Life on LandGOAL 16: Peace and Justice Strong InstitutionsGOAL 17: Partnerships to achieve the Goal
Problem Type:
F: Fuzzy exceptional problems
Date of last update
04.10.2020 – 22:48 CEST