Top 10 Countries that are the Largest Borrowers from the World Bank

You might know that your CAT exam is fast approaching, and it is high time that you start your CAT preparation. In order to score well, make sure that you have a good idea about the economies of different countries and economics in general. Read on to know more about it.

10 Highest Loan Taken Countries (largest borrowers)

1. China

China is the biggest borrower from the World Bank and has a debt of approximately $2420 million.

There are a few reasons, which drive China to borrow a huge amount of money, such as external imbalances, environmental issues, swift urbanization and high rates of inequality.

2. India

India currently owes the World Bank around $1776 million and is second on the list.

Even though India has progressed significantly when it comes to its economy, many challenges still plague it. The economic development has been quite unequal, due to the access to opportunities and because the profits of economic progress differ between geographic locations and population groups. Even though regulatory investments have been made to improve competitiveness, exports and private investments are still on the lower side. Its female labour participation is also declining significantly.

3. Indonesia

Indonesia’s total population stands at around 260 million and over 25.9 million of it still falls under the poverty line. Even though significant efforts are being given to improving public services, the quality of schools, hospitals and clinics are still not up to the mark. This is contributing to the dismal indicators in the field of health. Additionally, the maternal mortality rate is considerably higher i.e. 126 deaths per 100,000 live births.

All of these factors have caused Indonesia to accumulate a debt of $1692 million.

4. Colombia

Currently, Colombia has a debt of around $1687 million from the World Bank.

The Colombian government needs money in order to fulfil their developmental goals, which include facilitating financial productivity and sustainability, improving mobility and social inclusion through better science delivery and encouraging a balanced territorial development.

5. Argentina

Argentina owes around $1525 million.

Argentina is presently facing a financial setback, as the economic productivity has significantly slowed down in the second quarter of 2018. It was also predicted that the year would end with a recession. The Argentine currency or peso has suffered a heavy decline since April and even fell very close to 100% against the dollar. This has caused huge inflation in the country. The government is currently trying to improve the situation by following three ideas- safeguarding natural resources and lessening environmental risks, refining the availability of assets for households and people, and sustainable employment in firms and farms.

6. Egypt

Egypt currently owes the World Bank approximately $1500 million.

The Egyptian government has hiked up key social protection short-term mitigating steps, which involve targeted unconditional and conditional money transfer programs and increased distribution of food smart cards. Egypt’s social protection steps are moving from food subsidies and generalized energy to more human developmental and poverty-related programs.

7. Iraq

Despite all the turmoil Iraq has gone through in the past, the future is indeed looking very bright. Even though it owes around $1485 million to the World Bank,

it is making major steps towards the right direction. Its all-round GDP is predicted to grow by 6.2% in 2019, which should be sustained by oil production. However, there are many problems, which are still affecting the development of Egypt. Poverty has also increased by a large margin i.e. 18.9% in 2012 to 22.5% in 2018. Social welfare has taken a huge hit and unemployment has risen substantially.

8. Turkey

Turkey has a loan of $1083 million dollars and there are quite a few reasons behind that.

The country still faces quite a few human developmental challenges, such as inequalities have been increasing since 2008-2009. Women’s labour force participation is considerably low as compared to other countries. Additionally, the labour market is also very inflexible and the overall educational performance has deteriorated.

9. Ukraine

Ukraine currently owes the World Bank around $650 million.

Ukraine has made many positive developments since 2014 with the money they have borrowed from the World Bank. Some of these developments include shifting to a flexible exchange rate, initiating financial consolidation, forming anti-corruption agencies, focusing on health reform packages, social assistance and reforms in energy tariffs.

10. Romania

Romania currently has an outstanding loan of $625 million from the World Bank.

However, it has put that loan to good use. This is because, it is predicted that its economy will grow by 4% this year, further encouraged by the demand from Europe and the fiscal stimulus. Other reasons, which have contributed, to the positive developments are-

• Consistent growth in wages
• Expansionary fiscal policies
• Increased private consumption
• Minimum wage increases

Conclusion

If you are starting out with your competitive exam preparation, make sure that you study all the information mentioned above. Economics play a major part in entrance exams and knowing about the economies of other countries will give you an edge over the other applicants.