Objective: To illustrate the impact of debt and debt relief in developing countries
Time: 30 minutes
Materials: Paper, pencils, erasers
Group Size: Any

Instructions
Many poor countries around the world are buried in huge amounts of foreign debt. The payments countries make toward servicing their debts contributes to the cycle of poverty by funnelling money away from essential investments such as health care, education and infrastructure. This exercise will help students visualize how debt affects poor countries.

Divide the class into groups and ask them to plan a village by drawing it on a piece of paper. They have $50,000 in government funding to use and may add anything from the list below to their village so long as they do not spend more than the $50,000. Each item costs $5,000.

After students have completed and shared their plans with the rest of the class, explain to them that their country is in deep debt and the government has cut their village's funding from $50,000 to $25,000 to service their loan. The groups must now decide which features of their village will be removed from their plans as a result of this cut in funding.

Next, tell the students that their country has just become involved in a debt relief program that will free up $5,000 annually that can be used in the village. Have the students decide which items they will add over the next five years and explain why.

To wrap up, discuss what impact debt had on their villages, which services or infrastructure they decided to cut and what they learned about their priorities as they implemented the debt relief plans.

Available Items ($5,000 each)
Clinic, elementary school, high school, water pump, roads, park, medical supplies, livestock, funds for teachers and school materials, community centre, town hall, irrigation system, maternity ward, fertilizers, electricity, sewage system, technical college, tree nursery, daycare centre

Related Resource
Transforming Lives