If you thought Greece is the only country drowning because they can’t pay off their $376 billion debt, think again. Greece owes the International Monetary Foundation (IMF) €9.2 billion in loans, which are due to be repaid in June 2015, and some of the most powerful countries have debts up to trillions of dollars. Closer to home, Malaysia has an external debt of RM740 billion (approximately $200 billion).

A study by Goldman Sachs has revealed alarming statistics indicating countries all around the world are going under with debt, and the situation isn’t helped by an ageing global population that signals growing debt piles, said The Telegraph.

According to Andrew Wilson, head of the firm’s Europe, Middle East and Africa (EMEA) branch, the growing debt piles around the world pose one of the biggest threats to the global economy, and governments must introduce new policies to solve the issue. Demographics have changed, due to longer life expectancy, and there are relatively less young, working populations to sustain a debt-driven economic model used in the past. Take Japan, for example, where the issue of an ageing population is becoming increasingly prominent; gross government debt is above 200% of its gross domestic product (GDP).The Organisation of Economic Co-operation and Development (OECD) has cautioned that Japan’s debt is set to increase more than 400% by 2040 if no reforms are implemented by the government.

Greece’s debt is 180% of its GDP, while the UK’s debt is 82% of GDP. Malaysia’s debt at 54.5% of the country’s GDP seems paltry in comparison.

In retrospect, here is a list of the 11 countries with the most debt in the world. Do note that this is based solely on how much these countries owe the World Bank, and does not indicate the status of the country’s economy. As the popular comic book saying goes, ‘with great power comes great responsibility‘; great power also comes at a great price to maintain and keep a country running smoothly.

  1. Luxembourg ($15 billion)

  1. Ireland ($233 billion)

  1. Greece ($376 billion)

  1. Netherlands ($530 billion)

  1. Spain ($1 trillion)

  1. France ($2 trillion)

  1. Germany ($2.1 trillion)

  1. United Kingdom ($2.3 trillion)

  1. Italy ($3 trillion)

  1. Japan ($10 trillion)

  1. United States ($18 trillion)

(List from Insider Monkey, May 15, 2015)

When a country falls short of its needs and the means to fulfill them, countries often go to the World Bank and borrow what they need, with the intention of repaying once their country settles and improves in its economy.

Another problem plaguing countries is increasing property prices. In Britian, only 20% of 25- to 34-year-olds would be able to afford buying a home. Concerns over home ownership has also spilled over to many cities like Sydney. The number of renters has been on the rise, and will continue rising, as well as a generation of young adults living with their parents, due to soaring home prices. This in turn increases risk for real estate investors. In America, almost a third of working adults are not prepared for retirement, having no savings or a pension.

High household debt, low housing affordability, unemployment, slow income growth, retirement, and poverty are all social issues that persist despite reports of wealth and success from every corner.They remain as major challenges to developed and developing economies as young and old are involved with different sets of problems. Nevertheless, there is still hope for countries with high debt. Governments will have to come up with more creative policies, including immigration and workforce expansion, in order to pay down debt. In Japan, there are efforts to increase female labour participation and boost inflation.

Looks like all these countries aren’t about to finish paying off their debts any time soon.

Sources
AsiaOne (link)
Insider Monkey (link)
The Star Online (link)
The Telegraph UK (link)