Glossary of Scenario Terms

A | B | C | D | E | F | G | H | I | J-L | M | N | O | P | Q-R | S | T | U-Z

Browse or search for a term alphabetically by clicking the appropriate letter above, or enter the term below to search all the pages in the glossary.

 

______________D_______________

debt: when a country or business owes money.

 

debt crisis: a situation where the level of debt overwhelms the country’s ability to repay that debt. At an international level, a debt crisis can threaten international economic stability.

 

debt cycles: the process where a country’s debts have grown so large, that new loans are used to mostly pay off interest on older loans, leaving little money for development.

 

debt default: failure to make the required debt or interest payment without making specific arrangements with the lending government or institution.

 

debt forgiveness: an agreement arranged between a lending government or institution and the borrower to eliminate part of the debt or the interest on the principal borrowed.

 

debt restructuring/relief: various proposals for relieving the debt burden of developing countries. The indebtedness of many developing countries has been increasing dramatically since 1973. Most of those loans have been made by private commercial banks, rather than by foreign governments. Many governments are currently unable to “service their debt.” Debt restructuring could involve complete or partial debt forgiveness, temporary or permanent debt moratorium, interest rate reduction, and extensions of the terms of the debt.

 

debt servicing: payment of the basic installments as due on the loans. Without the ability to service the existing debt, many countries find that they are unable to obtain additional loans that they need to maintain government services. Debt servicing is not debt payment. The service payments are usually only a part of the interest owed, and the debt continues to mount as unpaid interest is added to the original principle.

 

debtor countries: countries that have taken out loans from other countries in order to help build their own economies. Although most countries are debtor nations to some extent, many of the developing countries have not been able to develop as quickly as they had planned and, therefore, they have remained in debt far longer than anticipated.

 

Declaration on the Rights of Man and Citizen: a historical document written during the French Revolution in 1792. The Declaration rejected the idea that a king should have complete control over his people, and made a firm statement that all men are entitled to basic human rights.

 

deflation: An extended decline in the average price of all goods and services. This should not be confused with a decrease in price of some goods within an economy, as with manufactured goods in China. Japan is a current example of an economy experiencing deflation. Deflation is a serious problem in modern economies. It makes loans more expensive to repay, it forces companies to cut prices, makes profits smaller, and threatens the banking sector.

 

deforestation: the destruction of the world’s forests, mainly rain forests, through direct human activity such as logging or slash-and-burn clearing for agriculture and grazing, and through the indirect effects of pollution and acid rain.

 

DMZ (Demilitarized Zone): a narrow strip of land along the border between North and South Korea where no weapons or military personnel are allowed. It is one of the most heavily land-mined areas in the world. Since the end of the Korean War in 1953 the DMZ has become a haven for wildlife and plant life.

 

depletion: using up or eliminating natural resources.

 

deportation: the act of removing or expelling a person

from a country.

 

deregulation: the act or process of removing restrictions or regulations.

 

devaluation: the deliberate decrease in a fixed exchange rate. When a currency begins to decline in value, a government may try to support the value of its currency by buying it in large quantities, keeping its price up on the world markets. However, if it becomes apparent that the market forces are stronger than the government’s support, a devaluation will be announced: the government chooses a new, lower, level at which to support its currency.

 

developed countries: the top group of the industrialized and market-oriented economies of the mainly democratic countries. Many of the developed countries are also known as the countries of the North.

 

developing countries: an imprecise term for the poor, often indebted countries of the world that are trying to industrialize and develop economically. Many of the developing countries are also known as the countries of the South.

 

dollar peg: an economic term used when a country fixes or “pegs,” the value of its currency to the value of the US dollar, usually at a one-to-one ratio. This provides financial stability and reduces the threat of inflation, because the country cannot just print money. But the country can still devalue its currency, relative to the US dollar. If it does, foreign investors may lose confidence in the country, defeating one of the main purposes of using a dollar peg. Dollarization will eliminate the devaluation dilemma.

 

dollarization: an economic term used when a country phases out its own currency and adopts the US dollar as its official currency. This eliminates the risk of inflation, because the country cannot just print money. It also offers economic stability, attracting foreign direct investment and trade and calms nervous foreign bankers. On the downside, if the value of the US dollar rises, the dollarized countries’ exports become more expensive and thus less desired, reducing its access to foreign currency, and making foreign debt harder to repay. The country also loses the ability to use homegrown exchange rates and monetary policies to dampen domestic crises. Currently, three countries in Latin American have dollarized: Panama, Ecuador, and El Salvador. Other countries said to be considering doing so are Paraguay, Argentina, Costa Rica, and Jamaica.