An Economic Analysis on the External Debt Burden of South Asian Countries

Abstract

The external borrowing has become indispensable for the modern world. All developed and highly
competitive countries are involved in heavy amount of external borrowing. External debt of Asian
Developing Countries continues to increase especially during the last three decades. This paper focuses on
the external borrowing of South Asian countries especially after the year 2000 and the analysis is done on
three major economic fronts. First the overall growth of external borrowing is studied using line chart and
with the help of a regression model along with a short study on ranking of these countries among other
countries of the world. Secondly the external borrowing is analysed using few indicators over a period of
time from 2000. Over this analysis, the line demarcation between actual amount of borrowing and
borrowing burden are delineated using the debt indicators and their graphical presentation. Finally eight
economic and non-economic factors were identified and these factors were regressed with dependent
variable, External Borrowing. And the type of influence and intensity of influence were analysed. The first
two analysis helps us to examine the intensity of debt burden of these countries, while the last analysis
helps the countries to identify the factors that influence the external borrowing of the country and to adjust
those factors according to the welfare requirement of the country.