The world owes Russia tens of billions of dollars: which countries like to live at the expense of others

Economist Loboda: “We must always remember about political risks”

The debts of other countries to Russia have grown to the highest level in almost a quarter of a century—under thirty billion dollars, according to a World Bank report. And this despite the unprecedented sanctions pressure from the West. At the end of 2022, 37 states had outstanding debt to domestic creditors. Some countries, for example Yemen, have not repaid loans to the Russian Federation since the 1990s. There are also states whose debts have been frozen for several years, for example, Cambodia and Syria. Russia completely forgave debts of some states. Are such loans justified? Economist, BitRiver Communications Director Andrey Loboda told MK about this.

– Which countries owe large sums to Russia?

– The largest debtors of our country, according to the World Bank: 1. Belarus ($8.2 billion), 2. Bangladesh ($5.9 billion). 3. India ($3.75 billion). 4. Egypt ($1.8 billion). 5. Vietnam ($1.4 billion). These are data for the end of 2022, but some countries have had debts since the 90s of the 20th century. In total, Russia is owed $28.3 billion.

– What is the Russian Federation guided by when approving a loan?

– Of course, decisions on lending to countries are, first of all, political in nature. On the other hand, if the state is credited at a favorable interest rate, and it is able to service the debt in a timely manner, then there are more advantages than risks in such a decision. However, there is a political risk beyond Russia’s control associated with a change of power in any debtor country and the subsequent non-recognition of the debt to the Russian Federation by the new government. This has already happened with a loan to Ukraine in the amount of $3 billion.

– If we talk about the size of public debt to GDP, which countries are among the leaders in the anti-rating?

– The most debt-ridden countries are Egypt, where the share of public debt in GDP has reached 90%, and India, where the same figure exceeds 80%. For other debtors, the share of public debt in GDP does not exceed 40%, that is, providing loans to such countries is not too risky. But we must always remember about political risks.