The Issue of the External Debt of the World's States and the Republic of Moldova and Possible Ways to Address it

Abstract

The article analyzes the problem of global external debt of sovereign states and integrationist unions. In the context of the cyclical nature of the development of the world economy, the periodicity of crisis phenomena is obvious, which significantly influences the dynamics of external borrowing of states. Global external debt has been growing steadily over the past 50 years, with the main debtors being developed countries. A detailed analysis of the current state of the world debt market is provided, along with a brief assessment of the structure of global debt and the Republic of Moldova by certain indicators. Based on the examples of developed and developing countries, the main directions in which threats to national economic security are manifested are presented. The urgent need to develop an effective national strategy for managing external debt, a crucial priority for both developing and developed countries, is also argued. Solving the problem of external debt of states does not seem feasible in the short term. However, international financial organizations have proposed practical recommendations to counter the continued growth of external debt. Regulatory methods include debt restructuring, promoting sustainable economic growth, fiscal consolidation, accelerating inflation, and creating a unified, clear and transparent database on the economic condition of debtor countries to facilitate an accurate assessment of credit risks. UDC: 336.273.3(100+478); JEL: E44, F34