In fact, in 2018, the amount of money collectively owed on the planet reached $243 trillion, which was over 300% of the worldwide economy at the time.
Despite these mind-numbing figures, nobody is pressing the panic button just yet. After all, the biggest borrowers are some of the largest and strongest economies in the world, including the top three: the United States, China, and Japan.
Practically every country is on a spending spree. Surprisingly, that is actually the sensible thing to do if a nation hopes to sustain economic growth or to fund social programs. The operative word, however, is “practically” because not all governments live beyond their means.
Macau
Technically, Macau is part of the People’s Republic of China, but this autonomous region is proud of its financial independence. Its own system of government works, allowing it to prosper without owing any entity anything.
It rakes in more than enough revenue from gambling and tourism to cover its limited expenditure. With its small size and population, Macau has little real estate to maintain, few mouths to feed, and a lot of money to keep.
Liechtenstein
The sixth-smallest country on Earth, Liechtenstein, is one of the few states that can claim to be debt-free. It owes its massive reserves to its exemplar budgetary discipline.
This European country has been investing in its own people, focusing most of its spending on education and social welfare. Its small population and land area also work in its favor.
Hong Kong
Like Macau, Hong Kong is another special administrative region of China. Although its current debt is not zero, the money it owes, however, is just a tiny fraction of its impressive income.
Being consistently rated the freest economy in the world, this East Asian territory has hardly relied on debt to run its government.
Brunei Darussalam
Debt is rarely on this Southeast-Asian gem’s vocabulary. Brunei is blessed with generous oil and natural gas reserves, which have been producing substantial annual revenue to fund its expenditure with little external financial assistance.
According to the International Monetary Fund, the tiny Islamic nation has a debt-to-GDP ratio of just 2.83%, which pales in comparison to most of its ASEAN neighbors.
Democratic Republic of Timor-Leste
Asia’s youngest country, Timor-Leste has been lauded by the International Monetary Fund for its prudent loan utilization policy. It has received concessional loans from various external lenders including the World Bank, and the Asian Development Bank.
The country has put these loans to good use by prioritizing infrastructure projects such as drainage upgrades and national road rehabilitation.
The country, with a debt-to-GDP ratio of 3.84%, can afford to rely less on debt for now because of its oil-related savings coming from its Petroleum Fund assets. Diversifying Timor-Leste’s economy should be high on the government’s agenda, though, since its oil and gas reserves could run out by 2020.
other valuable tips:
Afghanistan
This war-torn country is the poorest of the least-indebted nations. Its debt-to-GDP ratio only stands at 7%, but, unlike the other nations in this list, Afghanistan badly needs more money than it makes to rebuild its infrastructure and to revitalize its economy.
There are two main reasons why this Central Asian country has a low national debt. First, members of the Paris Club, an unofficial group of creditor nations, wrote off over $1 billion worth of this financially distressed state’s debt in 2010, giving it some relief. Second, Afghanistan is not exactly a portrait of stability; its government bonds tend to scare lenders away.
view infographic on world debt at:
https://fortunly.com/infographics/global-debt-history-infographic/
Image Credit: global debt by twenty20.com
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