Sri Lanka is one of the most indebted countries in the global south and its debt stock doubled between 2000 and 2012 to US$22.66 billion. The debt was first created in the late 1970s and has grown rapidly. Now an estimated 25% of government revenue is spent on debt repayments and the IMF estimates that under financial stress, payments could reach 35% of national income in 2013. The government of Sri Lanka spends nearly the same amount on debt repayments as it does on healthcare, recently borrowing a further US$600 million just to cover the repayments and escalating interest. The deeply indebted country has not been considered for any debt relief as international institutions deem its debt to be ‘sustainable’.

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Nepal has been heavily dependent on foreign assistance since its first budget in 1952. From the 1970’s, aid was given primarily in loans, resulting in a huge and growing debt stock. The debt stock in Nepal amounts to over US$3.77 billion with annual repayments of over US$186.9 million. Although the national economy is growing and Nepal’s debt sustainability is considered to have improved over recent years, this consideration is entirely based on economics as opposed to the position of Nepali people.

Nepal qualified for the Heavily Indebted Poor Countries initiative (HIPC) and began making the required changes until the government pulled out in 2009. This decision is largely attributed to an unwillingness to accept the conditionalities and terms attached to the cancellation which have been seen to have harmful impacts elsewhere in the world. Under the UK’s own Multilateral Debt Relief Initiative, 10% of Nepal’s debt to the World Bank is paid by the UK and although this is beneficial, the impacts are limited by the scale of the large debts which continue to weigh down the Nepali economy.

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India currently owes US$287.5 billion to external lenders. In 2011 the UK contributed £292 million in Official Development Assistance to the Indian government whilst over 40 times this amount left the country in debt repayments. Despite the vast economic growth in the country over recent decades, the situation in India is unstable, with growth reducing to half the expected figure over recent years.

Other emerging economies such as China and Brazil are set to reduce their debt by 12% and 8.5% respectively over the next 5 years, this decrease is only expected to be 3% for India. The debt is considered to be sustainable due to the economic growth, however this prosperity is far from evenly distributed within the country, showing the limited understanding of both sustainability and a successful economy.

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