What are the dangers associated with unviable debt and projects, as raised by Jaishankar at the Indian Ocean conference in Colombo
At the Indian Ocean conference in Colombo, Jaishankar highlighted the dangers of unviable debt and projects. These dangers include increased financial burden, potential loss of sovereignty, and negative impact on the economy.
- Increased financial burden: Unviable debt and projects can lead to a significant increase in financial burden for the country. Taking on loans for projects that do not generate enough revenue or sufficient returns can result in a higher debt load, requiring the government to divert a large portion of its budget towards debt repayment.
- Potential loss of sovereignty: When countries cannot repay their debts, they may be forced to hand over control of critical assets or infrastructure to the lenders. This can result in a loss of sovereignty, where foreign entities gain control over strategic resources or infrastructure, undermining a country's economic independence and national security.
- Negative impact on the economy: Unviable debt and projects can have a detrimental effect on a country's overall economy. If the borrowed funds are not effectively utilized or the projects fail to generate sufficient returns, it can impede economic growth, lead to an increase in unemployment, and exacerbate income inequality.
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