ABSTRACT
Removal of the debt burden is a necessary cause of escape from poverty. The experience of the Marshall Plan after the Second World War shows that an aid programme can, in suitable circumstances, transform the economic outlook of countries reduced to a certain level of poverty by an externally induced disaster. There is an intimate connection between the presence of absolute poverty which is abundantly visible in many low-income countries and that of unpayable sovereign debt. The conditionalities of the remission will go a long way to establishing a new beginning in proper financial management from both creditors and debtors. Debt is not the sole cause nor its removal a sufficient cause for recovery, but it is a great contributory factor of lasting poverty of low-income countries. One of the major sources of impoverishment in poorer countries has been the deterioration in their terms of trade.
