(Publish from Houston Texas USA)

(By Mian Iftikhar Ahmed)

Chains of Debt: Nations Trapped in Golden Cages

The burden of debt on countries around the world is increasing day by day. These debts have been taken from various sources, including international financial institutions, other countries, and private banks. Due to these debts, many countries are facing difficult situations and some are standing on the verge of default.

Loans from the International Monetary Fund (IMF)

The International Monetary Fund is the largest institution providing loans to countries around the world. According to statistics until February 2026, several countries have heavy IMF debts. Argentina tops this list with a debt of approximately 41.8 billion US dollars. This amount is a huge burden on Argentina’s economy and the country is having to implement strict economic reforms to repay it. Argentina’s history has seen several debt crises and it has defaulted multiple times. The current debt is also a major challenge for the country because its economy continues to suffer from problems and its currency is depreciating.
Ukraine is in second place with a debt of over 10 billion US dollars. This debt is particularly significant in Ukraine’s current situation because its economy was already suffering due to the war. The war has destroyed Ukraine’s infrastructure and severely damaged its economy. In such a situation, debt repayment becomes extremely difficult, and the International Monetary Fund has granted some concessions to Ukraine.
Egypt and Pakistan also have debts of over 7 billion dollars. This debt is especially important for Egypt as it grapples with increasing population pressure and economic challenges. Egypt’s population is growing rapidly, and it faces difficulties in creating employment opportunities and providing basic facilities. Pakistan is also facing a severe economic crisis and has to rely on IMF programs to repay its debts. Pakistan’s economy is unstable, and it needs international aid to increase its foreign exchange reserves and stabilize its currency.
Ecuador has a debt of approximately 7.2 billion dollars. Like Argentina, Ecuador is a Latin American country suffering from a debt crisis and is having to implement strict reforms to improve its economy. Besides these countries, there are many others with IMF debts, but these are the ones with the highest debts. The economies of these countries are weak for various reasons, such as political instability, natural disasters, or changes in international economic conditions. Debt repayment is a long-term challenge for these countries, and they need help from the international community.

Debt to GDP Ratio

The debt to GDP ratio is an important measure to assess the health of a country’s economy. This ratio indicates how much debt a country has compared to its total economy. If this ratio is high, it means the country’s debt burden is high and its repayment may be difficult.
According to the latest reports of 2026, Japan tops the list in terms of debt to GDP ratio. Japan’s debt ratio is over 207 percent. This means Japan’s debt is more than double its entire economy. Japan’s debt is mostly owed to its own citizens and banks, so there is no immediate risk of default, but this ratio indicates that the burden of debt on Japan’s economy is very high. Japan has to collect a large amount of taxes to repay its debts, and this reduces spending on public services. Japan’s population is also aging, and this is reducing the number of taxpayers, further complicating the situation.
Singapore is in second place with a debt ratio of approximately 162 percent. Singapore is a small country but its economy is very strong. Singapore’s debt has been taken mostly for development projects, and its repayment capacity is also good. Nevertheless, such a high ratio indicates that Singapore needs to pay special attention to its debt management.
The United States of America is in third place with a debt ratio between approximately 121 to 124 percent. America has the world’s largest economy, and its currency, the dollar, is the most widely used currency in the world. Despite this, America’s debt burden is also very high, and this ratio is continuously increasing.
Greece is in fourth place with a debt ratio of approximately 117 percent. Greece has been suffering from a debt crisis since 2010 and has had to take international aid several times. Greece’s economy is still weak, and it has to adopt strict austerity policies to repay its debts.
Italy’s debt ratio is between 117 and 137 percent. Italy is the third largest economy in the Eurozone, but its debt burden is also very high. Italy’s economy is growing slowly, and its unemployment rate is also high, making debt repayment difficult.
France’s debt ratio is between 106 and 111 percent. France is also one of the major European economies, and its debt is also increasing. Besides these countries, there are many others with debt ratios over 100 percent, such as Belgium, Portugal, and Canada. Managing debt is a major challenge for these countries, and they need to be careful in their economic policies.

Countries Near Default

Countries near default refer to a country’s inability to repay its debts. When a country defaults, its reputation suffers, and it becomes difficult for it to borrow in the future.
To identify countries near default, economists consider several factors, such as low foreign exchange reserves, currency depreciation, increasing interest rates on debts, and political instability. Based on these factors, several countries are considered to be at risk of default.
Argentina is at the top of these countries. Argentina’s history is filled with debt defaults, and it is still trying to emerge from this crisis. Ukraine is also near default due to war-related destruction. Tunisia, Ghana, Egypt, Kenya, Ethiopia, El Salvador, Pakistan, Ecuador, and Nigeria are also facing serious debt challenges.
According to the World Economic Forum, 53 percent of economists believe that the risk of default is very high in emerging economies. Approximately 400 billion dollars in debt is linked to this risk, which could severely affect the global economy.

Future Risks and Possibilities

According to experts, the years 2026 and beyond will be very important for countries regarding debt. Several factors could further deepen the debt crisis in the future.
The International Institute of Finance has warned that emerging markets will need to refinance over approximately 9 trillion dollars in debt. If these countries fail to secure new loans, they could default.
Another major issue is rising interest rates, which increase the cost of borrowing and debt servicing. Governments are increasingly relying on short-term loans, which raises refinancing risks.
The OECD estimates that 78 percent of debt payments in 2026 will go toward servicing old debts, leaving little for development. This could slow economic growth and increase public dissatisfaction.
Global economic conditions, geopolitical tensions, and currency depreciation in developing countries will also play a critical role in shaping the future of debt.

Conclusion

The global debt crisis is a serious issue affecting both developed and developing countries. Major economies like Japan, America, and European nations carry a heavy debt burden, while countries like Argentina, Pakistan, and Ukraine are closer to default.
Rising interest rates, weakening currencies, and increasing refinancing needs make the situation more critical. Countries must improve debt management, reduce unnecessary spending, and strengthen their economies.
International institutions like the IMF and the World Bank must also play a key role by providing support and guiding reforms. Global cooperation is essential to prevent a widespread financial crisis.
If effective measures are not taken, more countries may default in the future, leading to severe consequences for the global economy.