The Jubilee Debt Campaign (JDC), an anti-debt NGO, on September 2 released a new "debt league" that it says reveals the true scale of the burden on countries around the world.
Instead of just looking at how much debt is owed by the government, JDC's survey - based on data from the World Bank, International Monetary Fund, Organisation for Economic Co-operation and Development, and central banks - shows for the first time both government debt and private debt, and how much a country owes as well as what it is owed.
In this way, say campaigners, the new figures emphasise the responsibility of creditors and the financial sector for creating debt crises. Countries such as Norway, Saudi Arabia and Germany are traditionally seen as "morally superior" to indebted countries for their credit surpluses, but they are just as responsible for debt crises in a world increasingly characterised by huge imbalances, says JDC.
"Often when referring to a country's debt, people only focus on how much debt is owed by a government. This includes debts which are owed to citizens of that country, often as part of their savings such as pensions; debt which doesn't necessarily harm the country's economy. But it ignores the debt owed by private companies, including banks, even though that was the main cause of the current financial crisis," says JDC economist Tim Jones.
"It is debts owed between countries which are at the root of current crises in Europe, as well as in countries such as Jamaica, Pakistan and El Salvador. But it takes two to tango; our figures also show the big creditor countries, including Germany, Saudi Arabia and Norway, whose surplus status is just as much a problem to the global economy. It's the other side of the same coin," Jones says.
In the top 15 of largest net debtors, there are three countries from the Central and Eastern European/Commonwealth of Independent States region (CEE/CIS): Croatia (an overall international debt burden of 83% of GDP): Poland (66%) and Latvia (65%). The Seychelles is the most indebted country at 152% of GDP.
The healthiest country in the region is Russia with an overall international debt burden of -7% of GDP.
Croatia and Latvia are let down by their private foreign debt, at 77% of GDP and 102% respectively. Poland's debt is more evenly split, with government foreign debt at 26% of GDP and private foreign debt at 38% of GDP.
Other countries in the "hot zone" include Kyrgyzstan with an overall international debt burden of 64% of GDP, Ukraine at 63%, Georgia at 58%, Estonia at 56%, Czech Republic at 53%, Hungary and Lithuania at 52%, and Turkey at 51%.
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