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A more accurate picture of how financially independent a country is will have to include its loans as well. For example, if Country A loans out to most countries and is itself in debt with just one country is going to be very different from a country which did not lend to any country yet is in debt from many countries.
ReplyHmm, looks like China and India borrowed the least money. I wonder whether it is a deliberate decision on their part or they cannot find willing lenders. A question that came to my mind is who are the ones lending when most of the countries borrow more than what they make. If we can use money lent out to cancel money borrowed then perhaps the percentage would not seem so high?
ReplyYes, the figures are based on gross debt, so there will be cross debts across the different nations.
If you think of each country like a company, a country will be in a trade deficit position if it imports more than it exports. If the flow of investment capital into the country is not enough to make up for it, then it will be in negative cashflow position and will have to fund the deficit using debt or external debt.
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