debt prblms

8/3/2019 Debt Prblms

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International Debt Problem with respect to Asian

and US Crises

Group members:-Sonu Bachawat A-02

Sameet Kaur A-03Divya Duddu A-19Devina Jadhav A-21Indresh Pandey A-36Dharmish Shah A-49


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Indian Debt Position

External debt to GDP ratio of 17.3 per cent and debt serviceratio of 4.2 per cent in 2010-11. The external debt to GDP ratiowas 38.7 per cent in 1991-92 and 22.5 per cent in 2000-01. Thedebt service ratio similarly was 30.2 per cent in 1991-92 and

16.6 per cent in 2000-01.

At end-March 2011, Indias external debt stock stood at US$305.9 billion, increasing by US$ 44.9 billion (17.2 per cent) overthe end-March 2010 level of US$ 261.0 billion.

The share of commercial borrowing in total external debt hasincreased from 19.7 per cent at end-March 2005 to 28.9 percent at end-March 2011.

Government guaranteed external debt was US$ 8.6 billion atend- March 2011 vis-a-vis US$ 7.8 billion at end-March 2010.


3/19

Indias key debt indicators compare well with other

indebted developing countries. The Global Development Finance, 2011 of the World Bank,

which contains external debt numbers for 2009, showsthat Indias position was fifth, in terms of absolute debtstock amongst the top twenty developing debtor countries.In terms of ratio of external debt to Gross National Income,Indias position however was thefifth lowest.


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5/19

Chinas Debt Position

China's outstanding external debt came to $585.97 billionby the end of March

China owns an estimated $1.16 trillion in U.S. debt. Chinese government's contingent liabilities comes to well

over 150 per cent of China's GDP in 2010.


6/19

Of the total outstanding external debt, registered externaldebt accounted for $366.87 billion

and the balance of trade credit accounted for $219.1 billion. Outstanding long- and medium term external debt

accounted for 29.75% of the total ,while outstandingshort term external debt comprised 70.25%.

Debt in US dollars accounted for 68.3 percent of theoutstandingregistered external debt, representing a decrease of 2.11 percentage points compared with that at the end of 2010.

Debt in Japanese yen accounted for 7.68 percent, down 0.88percentage points. Debt in euroaccounted for 4 percent, down 0.41 percentage points.


7/19

SOUTHEAST ASIAN DEBT CRISIS


8/19

THAILAND

Inflation was kept reasonably low within a rangeof 3.4-5.7%.

The baht reached its lowest point of 56 units tothe US dollar in January 1998.


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INDONESIA

Indonesia also had low inflation, a trade surplus of morethan $20 billion, and a good banking sector.

Indonesias monetary authorities widened the rupiahtrading band from 8% to 12 %.

Although the rupiah crisis began in July and August 1997.


10/19

SOUTH KOREA

The South Korea Won, weakened to more than 1700 perU.S. dollar from around 800.

It has managed but the banking sector was burdened withnon-performing loans.

South Koreas government did not escape unscathed.


11/19

USA 2008: The Great Depression

Food stamps are the symbol of poverty in the US. In the eraof the credit crunch, a record 28 million Americans arenow relying on them to survive a sure sign the world'srichest country faces economic crisis

By David Usborne in New York


12/19

Debt Crisis of 2008 Transformed Into

Dollar Crisis of 2009-2010!


13/19

Whats this US debt crisis all

about?


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http://en.wikipedia.org/wiki/File:US_Public_Debt_Ceiling_1981-2010.png


15/19
http://en.wikipedia.org/wiki/File:USDebt.png


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Proposed resolutions

Congress considered whether and by how much to extendthe debt ceiling (or eliminate it), and what long-termpolicy changes (if any) should be made concurrently.

The Republican position on raising the debt ceiling:

Dollar-for-dollar deal raise the debt ceiling to matchcorresponding spending cuts

More of the budget cuts in the first two years

Spending caps

Balanced Budget Amendment to pass Congress and besent to states for ratification

No tax increases tax reform could be considered


17/19

(One representative, Ron Paul, proposed transferring$1.6 trillion of Federal Reserve assets to the government anddestroying those bonds, thereby reducing the United States

gross federal debt by the same amount. This would violate theproperty rights of national banks who own the Federal ReserveBanks.)

The Democratic position on raising the debt ceiling:

Initially wanted a "clean" increase or unconditional raise to thedebt ceiling with no spending cuts attached,[

Spending cuts combined with tax increases on some categoriesof taxpayers, to reduce deficits.[(1:1 spending cut / tax increaseratio initially desired in the Congress, 3:1 offered by President

Obama Large debt limit increase to support borrowing into 2013 (after

the next election)

Opposed to any major cuts to Social Security, Medicare, orMedicaid


18/19

Credit rating downgrade, 2011

TO


19/19

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