The Ghost...countries bankruptcy
Countries in their economic content resemble individuals to a close extent, and like people, they may go through financial difficulties that can reach bankruptcy
but of course the bankruptcy of countries is not like the bankruptcy of individuals or even establishments, but what does the bankruptcy of countries look like, what is the consequence and how do we overcome it?.
There are 50 poor countries on the verge of bankruptcy, but Puerto Rico, Argentina, Lebanon and even the city of Detroit in the US state of Michigan faced bankruptcy and is called sovereign bankruptcy, which is simply when a country cannot pay its debt installments or the interest of those loans, and this is due to several reasons, the clearest of which are weak domestic product, unproductive loans, and loans that are increasing without economic feasibility Which ultimately leads to the state’s inability to pay its debts and return debt securities, and I see in my own perspective that all these problems lie in the economic leadership of the state and making decisions in vain due to lack of planning or sometimes for the personal interests behind those decisions, but the result remains the same in all cases, as happened in Lebanon, which has been declared bankrupt since 2020, even if it does not declare it explicitly, The bankruptcy of countries entails a lot of catastrophic consequences on the state’s economy and on the citizen in his daily life, and the closest example of those results is Lebanon, in which the Lebanese lira has become weighed instead of several for the weakness and poverty of the currency, and the dollar has become the currency in circulation and the alternative to the Lebanese lira, and also resulted in the bankruptcy of Lebanon, exaggeration and inflation that Lebanon has never seen like it and has become similar to some countries in Central Africa in the prices of goods. And the basic necessities of life, The state also becomes averse to investments, but what is important is how to deal with the bankruptcy of states and can countries get out of it and how?
When the state goes bankrupt, it resorts to policies such as austerity and resorts to the International Monetary Fund, which is holding talks with the World Bank to schedule the debts of that country. And like companies in this point, scheduling means changing the time period for repaying debts and reducing the interest on those debts. The IMF supports the bankrupt state financially and holds discussions on how to get rid of the accumulated debt crisis. And often the problem lies in debt interest, not loans in But the process of recovery from such a problem needs a lot of time, and the biggest obstacle is the large number of creditors with whom a solution must be reached that satisfies all parties to overcome the crisis.
Fortunately, and what is optimistic is that most countries have declared bankruptcy before, and you will be surprised, as I was surprised when I learned that Russia declared bankruptcy nine times, the last of which was in 1998, and America also declared bankruptcy five times, followed by Germany 8 times and other countries such as Uruguay, Sri Lanka, Chile and Spain several times, and this indicates that the bankruptcy of countries is a terrible thing in the world of economy, but it is permissible and normal and can Overcome it, but it needs determination, patience and radical changes in the economic system of the state to be able to recover from it, and in the end, do not worry, dear reader, if you hear news about the bankruptcy of a country, and be sure that despite the magnitude of the crisis, it is solvable.
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