what would Happen to a Country if its Loan is Written off ?

[CHD]

I am not that good at understanding these economic matters, So just wanted to know from guys here who understand these things.
So my question is what effect will it have on Pakistan economy if all of its debt is written off(Which i think is round about $90 billion)?

 

[Skull and Bones]

I am not that good at understanding these economic matters, So just wanted to know from guys here who understand these things.
So my question is what effect will it have on Pakistan economy if all of its debt is written off(Which i think is round about $90 billion)?

Then, rather than servicing the annual debt interests, Pakistan can spend the money on internal development, and at the same time, can go for more debt for some serious ambitious projects.

 

[shaheenmissile]

I am not that good at understanding these economic matters, So just wanted to know from guys here who understand these things.
So my question is what effect will it have on Pakistan economy if all of its debt is written off(Which i think is round about $90 billion)?

Not much as our politicians will find some other ways to be corrupt and eat up the treasury.
Btw you can compare malaysia before and after Foreign dept was payed off.

 

[CHD]

Then, rather than servicing the annual debt interests, Pakistan can spend the money on internal development, and at the same time, can go for more debt for some serious ambitious projects.

how much is India's debt?

 

[shaheenmissile]

how much is India's debt?

USA's debt is at 14 Trillion and Japan's is also in trillions,but both are prosperous countries. Debt is a complicated matter i guess..

 

[AugenBlick]

USA's debt is at 14 Trillion and Japan's is also in trillions,but both are prosperous countries. Debt is a complicated matter i guess..

They can print their own money. We can't.

I am not that good at understanding these economic matters, So just wanted to know from guys here who understand these things.
So my question is what effect will it have on Pakistan economy if all of its debt is written off(Which i think is round about $90 billion)?

Your budget will be free ... installment nahi bharni padegi ...

 

[Abingdonboy]

I am not that good at understanding these economic matters, So just wanted to know from guys here who understand these things.
So my question is what effect will it have on Pakistan economy if all of its debt is written off(Which i think is round about $90 billion)?

@Skull and Bones has given the perfect answer.

Why Pakistan's creditors would do such a thing is worth discussing though.

 

[Skull and Bones]

how much is India's debt?

Around 65% of GDP, and decreasing every passing year.

 

[Skull and Bones]

They will spend it on internal development ? Haha...

Army will take it all. Whatever they could not spend, may or may not find its way back...

That is not for us to judge, the OP presented a hypothetical scenario, and I presented an ideal scene of development.

Isn't India's external debt increasing in absolute figures every year ? Clarification please.

Didn't I presented the percentage of debt to GDP, and not the absolute number?

 

[nForce]

Didn't I presented the percentage of debt to GDP, and not the absolute number?

hmm..that's a nice way to answer the question. Only problem with that is, it does not give the proper picture. Who was that guy, who said statistics are like miniskirts ?

A debt is a debt, and debt is absolute.

 

[big CAT]

Pakistan will never pay her debt ,would follow the path of brazil etc. I have heard it from someone important in pakistan,all thanx to usa oppressive strategies.

 

[Haroon Syed]

USA's debt is at 14 Trillion and Japan's is also in trillions,but both are prosperous countries. Debt is a complicated matter i guess..

USA can print dollars anytime whereas we don't have much choice other than to pay it back.

 

[nForce]

Pakistan will never pay her debt ,would follow the path of brazil etc. I have heard it from someone important in pakistan,all thanx to usa oppressive strategies.

You should try asking that person, if he is under medical treatment for paranoia or not.

USA can print dollars anytime whereas we don't have much choice other than to pay it back.

boss.. there is a limit up to which you can print. There is a limit to that. It's a good question actually.

Start with this link :

Why can’t a country print money and get rich?

 

[Icarus]

USA can print dollars anytime whereas we don't have much choice other than to pay it back.

USA can't just keep on printing dollars indefinitely. The more money they print, the more they offset the market and global demand for the dollar decreases.

 

[CHD]

What about our foriegn reserves of $20 billion, cant we start paying our debt from that?