When you pay back part of a loan, a part of what you are paying is the interest on the loan and part of what you are paying back is some of the money you borrowed.

For countries, money is also paid out to make loan payments. This is called 'Debt Service'.

The important questions are:

How much money is GOING OUT OF A COUNTRY?
How much money is COMING INTO A COUNTRY?

It's a problem, when too much is going out and too little it coming in.

It's a special problem when the money going out is paying back loans or paying interest on loans.

INTEREST: the charge or cost of borrowing money. You usually pay a certain % of the amount you have borrowed.

One way of looking at the loan burden on countries is to look at what percent of earnings from exports is paid out in servicing the countries debts.This is called the Debt Service Ratio.

The debt service ratios for many poorer parts of the world are very high. For many of these poorer places the Debt Service ratio is going up.

• Sub-saharan Africa spends $10 billion every year on debt service. That's four times what the area spends on health and education.

• While the Debt Service ratio for Latin America is going down, its debt service ratio is so high that it makes serious problems for the countries of the region. Latin America owes 30% of Third World debt and debt service is around 30% of its exports.