Why poor countries are in debt
The debt that is troubling poorer countries today originated several decades ago. In the 1960s the United States government found it had spent more than it earned, so it printed more dollars to make up for it. Having extra dollars around meant their value fell around the world. This led to a fall in the value of oil (which is always priced in dollars). Oil producing countries got together in 1973 and decided to raise the price of oil. They made billions of dollars in profits from the higher prices, which they deposited in western banks.
Banks had to find a way of investing all the additional money that was deposited. They turned to the developing world, where many countries were doing well and wanted more money to maintain their economic development and pay for the high costs of oil. Banks lent excessively, with little thought to how the money would be spent or how capable the countries would be of repaying the loans. Developing country governments were pleased to take advantage of these loans at very low interest rates. Many of them intended to use the money to improve the standard of living in their countries, but in reality much money went towards arms purchases, large-scale projects, and the private bank accounts of dictators. The poorest people saw little benefit.
What went wrong?
In the mid-1970s many poorer countries found they were not getting as high prices for their exports. The problem was that they had been advised by the west to grow cash crops for export (e.g. coffee, tea, cotton), but as lots of countries had been given the same advice there were now surpluses of these crops and the prices fell. At the same time interest rates began to rise, and oil prices rose again. This put the poor countries in a trap - they were earning less than ever on their exports, and paying more than ever on interest repayments and oil.
In 1982 Mexico told its lenders that it could not repay its debts. The IMF (International Monetary Fund) and World Bank intervened to offer new loans to help pay back the debts, but under strict conditions. This pattern became repeated over and over again as other countries reached the same situation and the IMF and World Bank stepped in to lend money and reschedule debt repayments. However the new loans just added to the debt burden these poor countries faced and the conditions that were imposed, (known as Structural Adjustment Programmes), led to numerous new difficulties.