Trend Analysis of External Debt of South Asian Countries
It is now an accepted conclusion by many countries that economic development must be financed by domestic savings and foreign assistance. United States tops the list of borrowers with heavy external borrowing. India gets the 12th place in the debt ranking. But in Economic Development India is in 162nd position under the list of lower middle income country, while United States is in the higher income countries list. Hence it is necessary to examine the impact of debt on every economy and its development. This paper tries to examine the growth of debt of South Asian Countries over the last thirty years. Debt emerged as a crisis after the oil price hike. The enormous increase in the volume of oil demand led to steep increase in the oil prices during the early 1970s, from 1.30 U.S. Dollars per barrel in 1970 to 2.70 U.S. Dollars per barrel in 1973. The second oil crisis started in June 1978. Mexico was in deep trouble following 1976 Peso devaluation. In 1982 debt crisis of Mexico made a halt. These two were the major reasons for the debt crisis of many of the countries. Baskar Majumder1 in his article on ‘Globalisation of Highly Indebted Countries; Some Issues’ attempts to identify the economic and structural dimensions of 12 highly indebted countries. According To Baskar, ‘out of the 12 countries, India and China are in a worse position than other countries’. India is continuing to carry severe debt in the region of South Asia. South Asia is also continuing to be an area with heavy borrowing. Hence this paper aims to examine the trend of Seven South Asian Countries viz. Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. The first part of this paper analyse the actual growth of borrowing and its components like Long Term, Short Term and IMF Borrowing. In the second part of the paper analyse the Per Capita Debt and its trend for thirty years. Finally the conclusion speaks about the similarities and dissimilarities in the actual and per capita debt analysis.
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Mediterranean Journal of Social Sciences ISSN 2039-9340(Print) ISSN 2039-2117(Online)
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