Spiralling debt
Aim:
To understand how debt can spiral out of control.
You will need:
Scrap paper, scissors (optional), blackboard and chalk/pen and paper, timer.
Duration:
15 minutes
Explain that the group has been lent $1000. You need to earn money to repay it, by making paper spirals. For each spiral made you will earn $1. If the money is not repaid by the time limit (1 minute) interest will be charged of $200, and so on every minute.
The leader should be the timer, and keep a running chart with four columns:
Total debt; Money earned (-); Interest added (+); Total still owed.
Start a new row for each round, writing in the new 'Total debt'.
When the timer is stopped ask one person to collect and count all the spirals made, and give them to the leader.
(You make a spiral by cutting (or tearing) a circle out of paper. Then carefully cut it by going in from one edge and following the circle around and around until you reach the centre, forming a spiral.)
Keep the game short - the aim is to convey quickly how debt repayments can soon get out of control. Play 3 or 4 rounds, then end the game and announce how much debt is still outstanding. Participants may say it is unfair, impossible etc - use these responses to debrief at the end and explain about the debt situation for many poorer countries.
Many of them really face a situation like this where they cannot earn enough money to repay the debts that they owe. They have to focus all their attention on repaying their debts, which means other things like education and health care get neglected. The solution to the problem would be cancelling all unpayable debts, to give these poor countries a new start.