Firstly forgiving all debts for poor countries will be an economic loss to the rich countries .All the money they had worked for as a nation will not be of any help to the citizens if lent to poor countries and not paid back .Debt relief program ca be a disadvantage to the rich countries and an advantage to the poor countries. Similarly it can be an advantage to both the parties since it strengthens ties between them.
Secondly, rich countries cancelling poor countries debts can result to too much dependence by poor countries .The poor countries will not manage and learn to develop through their own efforts but will rather depend on the developed nations for providence. If the financial help is given in form of loan, the poor countries, similarly referred as developing or underdeveloped countries will utilize the money more meaningfully .On the other hand the funds given should earn a low interest rate to ensure the poor countries settle the debts without difficulties.
On the other hand, if a poor country is moving forward by putting the funds into impeccable use, then the debts should be forgiven so as to encourage countries who do not use the funds given with care and integrity .Nevertheless poor countries should also try and depend on themselves rather than always depending on aid programs .A country that learns to depend on itself will also succeed in joining international market and roles. Such countries will get more trust and respect from developed countries.
In other cases where the previous government of a poor country misuses funds, and when a different government is unable to settle the squandered money, the rich countries can write off the loans .In short, forgiving of debts has both merits and demerits. Doesn’t it?