Global Debt

Imagine every living person in the world, adults, children, and even infants, every ablebodied individual to the not-so-able, having to work for three and a half years to pay off a colossal global debt of $300 trillion. The debt narrative has come to grip an increasingly unstable world, even as many countries have hit the pit with unwholesome debt in recent years. Everyone’s taking stock of the dangers and consequences of unbridled borrowing as the fear of households, businesses, and countries drowning in debt looms.

- Jennifer Paldano Goonewardane.

Can debt be so bad that a mineral-rich Argentina, among the first five wealthy nations a century ago, declares bankruptcy nine times? There is indeed a debt crisis in the world, spiraling out of control. According to official data, 70 countries are in an acute debt situation. Many of them, mainly in Africa, have defaulted on debt repayment in the last two years. Many are on the verge of defaulting. But there is even more shocking news. Making a bad situation catastrophic, 42 percent of the world’s population and 90 percent of the extremely poor live in the countries with the highest debt burden. To understand the impact better, imagine the corollary of unchecked household borrowing. Anyone in a debt-laden predicament will vouch for losing personal peace and freedom, fear and insecurity, and stymied progress. Meeting hostile creditors demanding to pay up is traumatic. It’s akin to bondage. Sadly, rather than the intended, the reverse happens. It plunges individuals into poverty. Their only restoration is a debt write-off. The story reads the same for countries with the highest debt burden.