What Is a Debtor Nation?

The debtor country is a country in international credit relations where capital input is greater than capital output. The fact that a country becomes a debtor does not necessarily mean that its economic strength is not strong. Although developed capitalist countries have borrowed a lot, the proportion of debt in GDP is not large, especially the proportion of net external debt is small. Moreover, the developed countries have strong economic strength, abundant foreign exchange and gold reserves, good balance of payments, a sound and developed financial system, and strong ability to repay foreign debts, so no debt crisis has occurred. The economic strength of developing countries is far inferior to that of developed countries, and it is difficult to cope with serious debt. Finally, the debt crisis broke out in 1982. The causes of the international debt crisis are complex, both external and internal. ^[1]

Debtor country

in

Debtor country

The main reasons for the formation of debtor countries are: the economic development of their own country is weak, and its structure cannot bear the requirements of economic growth, and the debt accumulation is increasing; the lack of a reasonable international economic order for the development of its own economy. The former, such as the United States, has undergone a transformation from creditor to debtor since the mid-1980s. For the latter, as in most developing countries, the total foreign debt in 1990 has increased from US $ 831 billion in 1982 to more than US $ 1.32 trillion. The debt of the entire debtor country to the world's gross national product has reached 50%.