Public debt as a percentage of GDP. Countries with a higher score have a greater level of public debt
1. Japan (Rank 1)
The tables have turned against Japan, a country that is no stranger to overcoming adversity, having recovered from the devastation it sustained during the Second World War to become arguably the most technologically advanced economy globally. But now it appears unable to rescue itself from two very different types of threat. Increased global competition, particularly in the technology sector, coupled with an ageing population, has left Japan struggling to pull itself out of the clutches of recession. As a consequence, the country’s public debt now exceeds 200 percent of GDP, with little chance of improving its economic situation anytime soon.
2. Zimbabwe (Rank 2)
The government’s decision to intervene in the Democratic Republic of Congo’s war dealt a devastating blow to its economy. Another knock came when Zimbabwe’s government enacted its land reform policy, which was characterised by chaos and violence, sapping millions of dollars out of the country’s coffers in the process, as well as ensuring that Zimbabwe would become a net importer of food products. To make matters worse, the Reserve Bank of Zimbabwe’s penchant for printing money has done little else but assist hyperinflation in further crippling the nation, with radical political changes required if the country is to bring its economy back from the brink.
3. Greece (Rank 3)
Greece seriously suffered during the financial crisis due to a larger than average budget deficit, brought about by reduced revenues and excessive government spending in the years that preceded the credit crisis. Under intense pressure from the Troika, the country was forced to adopt a controversial austerity policy that resulted in massive cuts in public spending, which has led to riots on the streets of Athens. Greece’s newly elected left-wing government has begun to unwind austerity measures and try to get the Troika to agree to a new debt agreement that will attempt to make a dent in Greece’s public debt burden that threatens to spiral out of control.
4. Jamaica (Rank 7)
High crime rates and large-scale corruption have contributed to poor economic growth experienced in Jamaica. They are also the reason why, despite the government borrowing to the tune of over $1.27bn from the IMF and other multilaterals in recent years, very little of that money has been allocated where it is most needed, with infrastructure and social projects missing out on their fair share of the cash. A consequence of this misallocation of funds has been an overall hike in unemployment and underemployment exacerbating the economic challenges the country is attempting to tackle. Jamaica is trapped in a vicious unemployment cycle.
5. China (Rank 110)
China holds the fate of many of the world’s economies in its hands. Luckily its economy has been performing well and managed to survive the decreased international demand for its exports that it was forced to endure after the global economic downturn – publishing GDP growth of around 10 percent in 2010. Though the big concern for China has been whether it can feasibly maintain those impressive levels, causing the country to change tack in favour for a more sustainable form of growth moving forward. World leaders have welcomed this shift in economic policy, as they are aware that their own economic stability relies on the continuity of the Chinese boom.
6. Russia (Rank 139)
The country’s savings account took a big hit in 2008, when the Central Bank of Russia decided that it would spend a third of its $600bn international reserves in order to put the breaks on the rapid devaluation of the ruble. The government also opted to allocate a further $200bn to its banking sector, in a bid to rescue Russian firms from collapsing under the strain of massive foreign debts. It worked, and the economic decline began to subside, with the economy experiencing minor growth in Q1 of 2010. But the Russian economy still faces many challenges. High levels of corruption, a shrinking workforce, and the ongoing crisis in the Ukraine have all added to its problems.
7. Kuwait (Rank 146)
What Kuwait lacks in size, it makes up for in wealth. Its vast amounts of capital are the result of enormous crude oil reserves of about 102 billion barrels – approximately nine percent of the world’s total. Unsurprisingly, oil is responsible for roughly half of the country’s GDP. Though one drawback of having oil on tap is that Kuwait has grown too comfortable in relying on it, doing very little to diversify its economy. However, the government has begun to realise that its reserves will run out, forcing it to embark on a five-year economic development that it began in 2010, which aims to attract more private investment, and wean Kuwait’s economy off oil dependency.
8. North Korea (Rank 153)
North Korea is of the world’s most centrally controlled and closed economies. Its lack of interest in opening up has been to the country and its citizens’ detriment. It cut practically all its international humanitarian assistance in 2005, and the government then refused 500,000 tons of food aid from the World Food Programme and other US nongovernmental organisations in 2009, despite chronic food shortages. In an attempt to improve its economic situation, the government cracked down on markets and the use of foreign currency, but instead of helping improve things, it led to yet more food shortages