A NEW "debt league" ranks Britain at number four in the world
when it comes to foreign debt that is owed by the private
The league was compiled by the Jubilee Debt Campaign, using data
on overseas borrowing by private firms and consumers, as well as by
the UK Government.
The foreign debts owed by Britain's private sector (mainly the
banks) amount to 364 per cent of GDP, the charity says. Ireland
tops this private-sector league with debts worth 900 per cent of
GDP. Taking into account only the Government's foreign debt, the UK
drops to 98th place.
The most indebted nation in the world, ranked on net government
debt, is the Seychelles archipelago, which received an IMF bailout
in 2008. Close behind it is Portugal, Ireland, Greece, and Spain,
all victims of the eurozone crisis. Top of the league of net
creditors are Singapore, Switzerland, and Saudi Arabia.
The economist for Jubilee Debt Campaign, Tim Jones, who did the
calculations, says: "Often people only focus on how much debt is
owed by a government. . . This ignores the debt owed by private
companies, including banks, even though that was the main cause of
the current financial crisis.
"Debts owed between countries are at the root of current crises
in Europe, as well as in Jamaica, Pakistan, and El Salvador. But .
. . our figures also show the big creditor countries, including
Germany, Saudi Arabia, and Nor- way, whose surplus status is just
as much a problem to the global economy." The big lenders created a
global boom-and-bust cycle, he said.
Austerity, according to Mr Jones, would do nothing to help the
UK's financial crisis. "We need to regulate lending between states,
including by private companies and banks. In the 1950s and 1960s,
when such regulations existed, debts were far lower, growth was
higher, and there were hardly any debt crises."
Jan Toporowski, Professor of Economics and Finance at the
University of London, said: "This is the untold story behind
developments in international banking and finance, a story that
shows that these are not just everyday transactions helpfully
carried out by interna-tional banks as a benefit to the world in
general. The data shows the legacy of debt that is the conse-
quence of international transactions carried out without a proper
system of debt management. They highlight the most urgent issue in