Distinguish between debt forgiveness and debt retirement?
Debt retirement refers to the paying off of a debt in order to
avoid future interest payments, this can only be done if the
current funds available are able to clear the outstanding balance
of the debt.
Debt forgiveness on the other hand can be considered to be an
amnesty by lending institution for countries who are heavily
indebted, this is usually done to help alleviate the debt burden
faced by such countries.
Therefore the difference between debt retirement and debt
forgiveness is that one is paid off by the country who is able to
pay off the debt and the other is an amnesty given to remove the
debt for countries who cannot afford to pay it off.
Related Q&A：
Why do countries take on debt？Well, you know, countries take on debt for a bunch of reasons. One big reason is to fund important infrastructure projects like building roads, bridges, and power plants. These things cost a lot of money upfront, and borrowing helps get them done faster. Another thing is to deal with economic crises or emergencies. Sometimes there's a sudden need for a lot of money to help people or stabilize the economy. Oh, and also to invest in education and healthcare to improve the quality of life for their citizens. So, basically, it's all about making things better and moving forward, but it's gotta be managed carefully or it can cause problems!
