Question

Explain the role of external public debt in economic development of developing countries​

Answer 1

Answer:

It has to utilise revenue surplus for the purpose, seek external aid, pitch up its level of taxation and public borrowing are the two major instruments of resource mobilisation. Public borrowing has one advantage over taxation.

Answer 2

Answer:

• Excessive amounts of foreign debt will hinder countries' capacity to invest in their financial prospects, whether through education, infrastructure, or health care, because their small income is spent on repayment of loans. It is a challenge to economic development in the long term.