EXTERNAL DEBT POSITION OF THE CENTRAL ASIAN COUNTRIES:
A RETROSPECTIVE AND COMPARATIVE ANALYSIS

Munim HASANOV


Munim Hasanov, Ph.D. (Econ.), Assistant Professor at the Chair of Economics and Finance Management, Civil Servant Advanced Training Institute (Dushanbe, Tajikistan)


Introduction

The national economy of each of the Central Asian countries aims to create conditions that ensure a satisfactory standard of living for its population, to the extent available resources allow, based on sustainable development. According to its landmark definition, sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs (italics mine.M.H.). In other words, future generations should not have to pay for the counterproductive economic and other activity of the present generation. Here it is worth noting that external debt burden is among the factors that have a detrimental impact on such vitally important state budget-financed spheres as public health, education, social security, etc.

A review and analysis of the sources shows that, in the past, researchers in the Central Asian countries essentially ignored the problem of external debt and did not offer methods to resolve it. There are very few analytical publications on this subject, while the media provides only sparse coverage of external debt. The reasons for this situation are as follows:

1) this problem is relatively new; it did not emerge until the Central Asian countries declared their independence in 1991;

2) before the beginning of the 2000s, it was very difficult or practically impossible to obtain reliable information on the external debt stock of the Central Asian countries, including from internal sources;

3) analysts and researchers were loath to deal with this problem, since public discussion of it was not encouraged.

1. External Debt Burden as a Reason for the Global Financial and Economic Crisis

A large number of researchers point to the following reasons for the world financial and economic crisis of 2008-2010:

  • Massive provision of mortgage loans to subprime borrowers with low income or a blemished credit history in the U.S.; the share of this country comprises approximately one quarter to one third of the gross world product, which explains its significant influence on the worldwide financial and economic processes;
  • Imbalances between the real and financial sectors of the economy, and also in the sources of profit acquired by corporations (particularly American). For example, world GDP in 2006 was $48.4 trillion, while financial fixed assets (shares, bonds and commercial bank assets in the aggregate) were estimated at $194.5 trillion, i.e., an amount more than 4 times larger than..

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