Why does a country borrow money from the world bank even when they can afford it

[EluguHcman]

This might appear a mere or cranky question but yeee. Its been one of the interesting discussions raised by the average and vulnerable citizens in the country usually at when the masses feels the governments are playing over their intelligences and making caricature of them and yet this question keep staying questionable even after being answered.
Question: Why does the independent, developed and  productive countries still borrows money from the World Bank even when they have enough to execute their excused reasons given why they have to borrows the money?
I am interested about this because in my country, we are independent and a productive country with revenues ought to be contented enough to execute the projects in demands of what they still borrows from the World Bank for and yet there is no economical improvements in the country instead we are running economical backwards.

[Churchillvv]

If I'm to answer this question it will be biased and an aggressive answer that might sound like agitation in the wrong place and time.

BTW, I don't really know why they choose to borrow for some useless reason of development projects but I will say that the disadvantage of borrowing is far higher than the advantage so what's the purpose of borrowing if not and alliance with foreign countries in order to suppress the debtors mean while the national leader who takes this actions has a selfish interests for such action.

Infact there is a shadow party in borrowing from world bank that makes developing countries like mine to run debts.

[serveria.com]

I am not sure about countries but I know that many persons and businesses prefer to use borrowed money because loans are cheap and many prefer loans to spending/investing their own money. I believe it's the same with countries. Instead of raising taxes, raising retirement age and other unpopular measures, why not just borrow some money if it's easily available?

[oktana]

Borrowing money from world bank is averagely done when the country wants to maybe take on a large project which requires more money than they have. Imagine you have $50 but you want to do something and need extra $50, then you have to borrow the money from your friend. People who doesn’t know much about you and your friend’s agreement would think that you borrow $50 which they know you can afford, whereas you added it to what you have so you can solve your problem. It can also be because the country doesn’t want to run into financial issues so they would rather use borrowed money than the one they have.

[Darker45]

For one, there's always a room for improvement. A rich and beautiful country can still improve in many ways. In this sense, sky is the limit in terms of improvement, so in a way there's always not enough. Needs and wants are always ahead of the available resources. But there may be certain territories, small ones in particular, that don't have debts in the World Bank or other countries. Liechtenstein, I believe, is an example.

The reality with most countries, however, is that they're poorly run, and not with brilliant leaders but dumb yet popular ones. And since the leaders will come and go and the government isn't their personal business, they don't care about it. What's important is that they've accumulated so much wealth while they're in power.

[cakravothy]

if you already have enough money for the development of a country in the current fiscal year but still borrow to the world bank. it means that the country's leaders are stupid. because borrowing at the world bank there are conditions that must be fulfilled which are detrimental to a small country and very beneficial to a large country. besides that it also has high interest in its payments.

[pooya87]

It is hard to answer a question that is general and yet too specific at the same time. Usually when a country borrows money and increases its debt is because they are facing a budget deficit and an economic hardship which made them be in need of some extra money hence they borrow it.
For example last year, our neighbor country in the East had a couple of bad floods that did a lot of damage. They have also been facing an energy crisis with an increasing budget deficits. That is why they've been trying to get a loan.

I am interested about this because in my country, we are independent and a productive country with revenues ought to be contented enough to execute the projects in demands of what they still borrows from the World Bank for and yet there is no economical improvements in the country instead we are running economical backwards.

The global economy is bad and all countries are affected at different degrees. So there is a good chance that despite being "independent and production" your country is also facing the economic crisis just like everyone else and needs some extra help.

Keep in mind that it is not necessarily a bad thing as long as there is production and the debt doesn't keep growing more than the real GDP can cover.

[avikz]

This might appear a mere or cranky question but yeee. Its been one of the interesting discussions raised by the average and vulnerable citizens in the country usually at when the masses feels the governments are playing over their intelligences and making caricature of them and yet this question keep staying questionable even after being answered.
Question: Why does the independent, developed and  productive countries still borrows money from the World Bank even when they have enough to execute their excused reasons given why they have to borrows the money?
I am interested about this because in my country, we are independent and a productive country with revenues ought to be contented enough to execute the projects in demands of what they still borrows from the World Bank for and yet there is no economical improvements in the country instead we are running economical backwards.

There are multiple reasons why a country would choose to borrow money even when they have the financial resource to fund it themselves. I will try to explain it.

Interest rate and repayment terms are extremely attractive when borrowing from World bank. World bank even offers grace period for long term projects similar to "EMI holiday at no penal interest" offered by some private lenders to the retail customers. Which makes the loan terms extremely favorable for the governments against borrowing money from internal lenders.

A major reason for borrowing money from World bank is the technical assistance. A lot of countries lack technical knowledge on how to execute a complex project. Very often the World Bank provides their technical assistance to complete the project within the deadline. Moreover, they fund these technical assistances by themselves and add it to the overall loan that country has taken. This is a vary important assistance, very few private lenders will extend.

Hope this helps!

[pinggoki]

It probably has something to do with the budget that a government sets for their whole operation for the year and sometimes those approved budget goes overboard because some projects got unforeseen problems that lead to overspending of the budget and what happens to that project if the fund that's used for it runs out and they can't just pull out money from the annual budget that easy because that would create a cascading effect where you allow one and then you need to allow the others to do the same thing, so you go to the financial institutions that are operating on an international scale to ask for some money because you need to fund those projects so it can continue towards finishing the project, that's how I think the country borrowing money from the world bank works.

[bakasabo]

I think countries do it because they dont intent to return that loan in money equivalent, but rather offer some services or benefits instead in future. I will try to explain it with simple example. I have $50 and I need to spend $30 on something. I borrow $30 from world bank. Time passes and the bank asks to return loan. Instead of giving $30 back, I say that I will help him to do something for the next few weeks. And while time was passing, some other country asked me for help, and now owe me a favor. So here is what I do, that country that owe me a favor work for world bank, I got my $30 worth thing/service, and still keep $50.

[Rruchi man]

Question: Why does the independent, developed and  productive countries still borrows money from the World Bank even when they have enough to execute their excused reasons given why they have to borrows the money?

Some of the countries borrowing do not actually have the money to execute the projects they want without affecting other sectors of their economy, so there is nowhere to pull out money from, and instead of printing more money which they can, they choose to borrow instead from world bank and other countries that can lend to them to avoid having too much of their money in circulation that can lead to inflation.

I am interested about this because in my country, we are independent and a productive country with revenues ought to be contented enough to execute the projects in demands of what they still borrows from the World Bank for and yet there is no economical improvements in the country instead we are running economical backwards.

In your country, there are corrupt leaders borrowing for no reason and embezzling borrowed funds meant to execute projects.

[Hispo]

Well. As far as I understand. Whenever a country ask for a loan from a Inter arional organization like the world bank, it is usually to use that money to develop infraestructure which would later return the investment. For example, a country could ask for a loan to build a hydroelectical facility, we are talking about a very big loan.
When the facility is ready, then it would be matter to use the facilities to sell electricity to slowly pay back the loan. When the loan is completely paid back, whatever profit is generated by the facilities belongs to the state.
I believe one is not supposed to underestimate the amount of money needed to develop infrastructe, there are even countries which are doing relatively good and cannot afford to modernize their existing infraestructure.

[demonica]

This might appear a mere or cranky question but yeee. Its been one of the interesting discussions raised by the average and vulnerable citizens in the country usually at when the masses feels the governments are playing over their intelligences and making caricature of them and yet this question keep staying questionable even after being answered.
Question: Why does the independent, developed and  productive countries still borrows money from the World Bank even when they have enough to execute their excused reasons given why they have to borrows the money?
I am interested about this because in my country, we are independent and a productive country with revenues ought to be contented enough to execute the projects in demands of what they still borrows from the World Bank for and yet there is no economical improvements in the country instead we are running economical backwards.

Simply like how entrepreneur and businessman run their business. Even if they have more than enough money on a certain project they want to build, they don't just use their money on it. They borrow. Why? Because their business is still operating so they can't left it with little amount of money circulation just because they are going to use it on a project. They still need to have funds for other stuff. The government don't just focus on one project so they can't spend all of their allotted money on a single project. Also in business, it's okay to borrow money because it will eventually earn profit in the future. They are not just borrowing for expenses, it will be used to generate income. So if they don't want to overspend, they can borrow money since they also know that they can afford to pay it.

[Briankimp1]

The aim of borrowing from the world bank and other countries is mostly to build or improve massive infrastructures projects of these magnitude cannot be undertaken by mostly developing nations without a significant negative effect on it’s economy so they rather borrow low interest loans from world bank and other well developed countries.
Another reason is because most borrowers like the world bank and other well developed countries will not only loan you the money but they’ll also provide technical support which is very important as you are provided with a well taught expert whose job is to provide support he/she stands in as a representative to help oversee the usage of the loans these technical supporters are funded by the lenders who inevitably get back their money when the loans are cleared.

[Lucius]

The World Bank and the International Monetary Fund are actually tools used by those who want to control as many countries as possible in such a way that those same countries owe them money - and when someone owes you a lot of money, then you can ask him for whatever you want.

I once watched a documentary in which people who were engaged in such dirty business talked about how their countries try to exercise their influence in a country. The first phase is political influence and an attempt to appoint people who will serve their interests, and if that does not work, then the country is put in a difficult economic position, and then the saviors, the World Bank and the IMF, appear.

If politicians and the economy fail, the third option is war, which was more than obvious in the example of Iraq, Libya and Syria. We can conclude that those countries that need the help of the mentioned institutions have a huge problem, not only because of the money they borrowed and have to pay back, but also because these same institutions are starting to influence the entire monetary policy within the country. A country that does not have financial independence is no longer a sovereign country, but just another colony of the WB and IMF.

[Wapfika]

Question: Why does the independent, developed and  productive countries still borrows money from the World Bank even when they have enough to execute their excused reasons given why they have to borrows the money?
I am interested about this because in my country, we are independent and a productive country with revenues ought to be contented enough to execute the projects in demands of what they still borrows from the World Bank for and yet there is no economical improvements in the country instead we are running economical backwards.

Because it’s free money. World Bank can’t do anything aside from increasing the debt and interest if the country can’t pay it all on the given due date. World bank can’t size country nor its property while the country can pay only the interest while they can still borrow money.

They are just creating debt out of thin air just like fiat that doesn’t have any real value. Think about this, If someone will lend you big money without any risk of seizing your property you have a the whole time to repay it even for a lifetime do you think you will not  get the offer. Besides all this debt will be useless if WW3 occur so why not borrow and invest it to your country.

[Iroh]

It’s quite absurd for a country to borrow money from wherever for whatever reasons when they’ve got the money themselves to do so. Ask yourself, would you go ahead and take a loan from the bank for a project when you’ve got the amount needed and more?
 
No country would posses sufficient money and still go ahead to borrow money from a financial institution knowing they would have to repay with some interest.

Asides all of that, these financial institutions that one would say are readily available to bailout and give loans to countries going through an economic turmoil would then have a certain level of influence and say in the country’s economic affairs . And the influence to be had is what’s really vital to these institutions.

[Sanitough]

Each country has certainly its own needs to provide progress and development that the citizens are much needed. This means that no matter how productive and developed a country is, there are still essential projects needed to promote the welfare of the individuals, to eradicate poverty as much as possible, and to provide job opportunities to jobless people so that they can feed their own family without relying on the government aids and assistance. All these needs will continue to grow if the country’s population also grow, hence the need for a country to take loan from the world bank is certainly a must.

[Husires]

The World Bank does not impose its policies on countries, but rather it is closer to a cooperative society, but many confuse the World Bank with the International Monetary Fund, which is considered a financial institution whose primary interest is implementing certain capitalist policies in exchange for giving loans to countries and pledges for more whenever those countries commit, because they believe that they gave loans in return, and therefore it is It is wrong to spend it on policies such as monetary support, providing goods to citizens, or strengthening the value of the local currency.

The International Monetary Fund implements decisions aimed mainly at creating more cheap labor and stable countries.

[bettercrypto]

What I know is that a country borrows from the World Bank for a project that will grow the economy of their country. And they are given a nice interest given by the borrower, like the US country; they offered a nice interest.

Even our country borrows money from other countries for infrastructure projects called build, build projects. That's why there are other countries that borrow money, and then the corrupt official governments just steal it.

[Pi-network314159]

Sometimes the real cause of why some countries still borrow money while dey can afford it, is Because of bad and greedy leaders. The causes of this things is when the leaders shear the money or alocation generated from government investment and tax, without saving the money or having emergency fund. When they leterarily spend all the money generated from government revenue without keeping some portions for other purposes. If they continue this strategy you see that the country will be poor and there reserved fund becomes minus, and leaders come and go without planing on how to pay the loan, rather think of borrowing and paying till the economy is messed up.

[Text]

Governments need revenue to operate and fund services such as healthcare, education, and the military. This revenue usually comes from taxes paid by citizens and businesses and from levies on certain goods or duties on imports. However, when the spending of the government exceeds the income it earns, it leads to a condition called a deficit. To make up for this difference, the government needs to borrow money.

Similarly, when there is a desire for expansion or development in other projects or infrastructure, the government allocates a portion of its revenue for that purpose. If the allocated funds are not sufficient, the government resorts to borrowing to finance additional projects and improvements.

[Gozie51]

It is cheaper to borrow money than to run the cost of printing. For example if you want to print new currency in a country, it is not very cheap especially when the quantity you want to print can as well be given to you/country as borrow and you can quickly get onto the project that it is meant for. In order words, it is faster to use borrowed money to start a project than going through the legislative bottle kneck of printing money. Therefore, apart from the fact that it is cheaper in cost to printing money, it is faster to get things done with the money.

Another possible point is that it is targeted on a particular project or certain project which gives room for accountability assuming it was properly utilized without corruption and going into private pocket.

Another point again is that it makes lesser noise and doesn't raise curiosity in the public sphere only that money is being borrowed than when a government embarks on printing money. If government embarks on printing money, it creates more fear, doubt and uncertainty about what is happening to the economy of that country, perhaps they are being bankrupte or such kind of fear.

Government doesn't really like to print money or it is not really a good economic policy to print money if it is not expedient.

Then , when money is printed, it could increase the inflation rate if not properly managed and controlled. So, it is more serene to hear of borrowing than printing economically.

[Richbased]

To the best of my knowledge as regards to reasons why a government borrows money from world bank is as a result of economic crisis within that country so they actually use the money they borrowed to sort out some financial needs of the country not actually that the country doesn't have money but because the money they have in the Treasury isn't enough to settle all parastatals of government hence the reason for borrowing in other to keep the government running so that they can pay workers, build projects and fund other sectors of government in other to bring about development in the country pending when the government will generate enough revenues to pay back the loan they took.

Sometimes it isn't that the country doesn't have money to run the government but it might be that they want to do some extended budgets so in such a situation they can also result to taking loans in other to fund that particular budget. Yeah some countries that there economy is steady always have excess accounts, these excess accounts stands as for any other expenses outside the countries annual budgets so if their is any other further expenditures by the government then they can access the excess account.

A government that doesn't have good economic team can most times result to accumulating much debts due to borrowing from other countries and sometimes these debts are being inherited by their successors which will actually destabilize the successors government because instead of thinking ahead he might keep repaying debts incurred by previous administrations and incurring too many debts hinders the growth and development of a country.

[Gormicsta]

I am interested about this because in my country, we are independent and a productive country with revenues ought to be contented enough to execute the projects in demands of what they still borrows from the World Bank for and yet there is no economical improvements in the country instead we are running economical backwards.

The global economy is bad and all countries are affected at different degrees. So there is a good chance that despite being "independent and production" your country is also facing the economic crisis just like everyone else and needs some extra help.

Keep in mind that it is not necessarily a bad thing as long as there is production and the debt doesn't keep growing more than the real GDP can cover.

I completely agree because there will probably be some spillover effects from the worldwide recession, even in countries that are not directly affected. As you pointed out, there may be major issues later on if a nation's debt increases more quickly than its real GDP. It's important to keep in mind that, even if a nation can weather an economic storm, its trading partners might not be as fortunate. Therefore, even if a nation has a strong economy, the global recession may still have an impact on its exports.

[serjent05]

I am no expert about this topic, the thing I know why the government borrows money is to supplement their current and incoming budget to have a smooth operation of their programmed budget for the year activity.  In order to broaden the information I look for the answer on the internet and among those that I read I find this article[1] to answer @OP's question in a simple but clear manner.

The article stated that :

Essentially, the government borrows so that it can enable higher spending without having to increase taxes.

• The annual amount the government borrows is known as the budget deficit.
• The total amount the government has borrowed is known as the national debt or public sector debt.

This image from the article simply show the reason why the government borrow money:






[1] Why does the Government Borrow? by Tejvan Pettinger

[kentrolla]

I want to tell you an example of my country, it borrowed money from world bank in 2000 to build national highways and till date they are collecting toll charges from travelers stating it's to pay back the world bank for the loan which we had taken 24 years ago wherein no one has clarity how much has been paid and what's the remaining amount and when people started questioning they started dodging the questions stating it's for the maintenance of highway, etc some irrelevant reasons. It's just because they want more money and loan from world bank is just an excuse to collect more taxes from people. It's plain greed.

[_BlackStar]

There are many reasons why governments make loans to international financial institutions - mostly because they need to budget more than their domestic income from various sources. Sustainable project financing is the goal of why governments make loans - but unfortunately ineffective management backfires on a country to the point where they have difficulty repaying the loan.

Not all governments get loans by international institutions of their own wish- but in some cases these financial institutions also offer several special benefits to the government of a country in order to make a loan. Low interest rates, diplomatic relations and a few other things are also reasons - but in most cases, the government get the loans because it needs more funds.

[Fortify]

This might appear a mere or cranky question but yeee. Its been one of the interesting discussions raised by the average and vulnerable citizens in the country usually at when the masses feels the governments are playing over their intelligences and making caricature of them and yet this question keep staying questionable even after being answered.
Question: Why does the independent, developed and  productive countries still borrows money from the World Bank even when they have enough to execute their excused reasons given why they have to borrows the money?
I am interested about this because in my country, we are independent and a productive country with revenues ought to be contented enough to execute the projects in demands of what they still borrows from the World Bank for and yet there is no economical improvements in the country instead we are running economical backwards.

You say this is happening, and maybe it is, but why don't you give an example of these countries that are in such dire straits that they have to borrow when they can supposedly afford it already? I can't say I know of any examples, the world bank is the equivalent of a pay day lender, no government wants to go cap in hand to them as it admits their country has hit rock bottom. There are often some quite heavy strings attached to unlocking loans from the world bank, like concrete steps and law changes that could be very uncomfortable for certain established powers, like oligarchs who might have their little fiefdoms threatened and try to strike back at politicians. You might think you live in a productive country, but it's a race to the bottom and hard to be profitable these days.

[stadus]

There’s always a room for improvement, even if we are already seeing such countries in progress. The reason why most of the countries still taking a loan from the world bank so that they can continue providing their people the quality services that they deserve, like building more infrastructures that will cater the different needs of the people, and giving the people the continuous financial assistance most especially for those who are actually less unfortunate ones.

However, the officials personal interest to also benefit from the borrowed money is inevitable. Even if these people will deny it, but we all know as to where they are getting their funds to buy instant luxury cars and services for their own family benefits.

[DeathAngel]

They all will have their own reasons but mostly countries borrow from the World Bank because even if they have the financial capacity to pay for things without external assistance, borrowing from the World Bank allows them to access funds at lower interest rates and with longer repayment periods. This can be more favourable compared to borrowing from commercial lenders. The World Bank provides technical expertise & support to help countries implement projects effectively. Borrowing from the World Bank can signal credibility to other investors & lenders, attracting more investment & fostering economic growth.

[South Park]

This might appear a mere or cranky question but yeee. Its been one of the interesting discussions raised by the average and vulnerable citizens in the country usually at when the masses feels the governments are playing over their intelligences and making caricature of them and yet this question keep staying questionable even after being answered.
Question: Why does the independent, developed and  productive countries still borrows money from the World Bank even when they have enough to execute their excused reasons given why they have to borrows the money?
I am interested about this because in my country, we are independent and a productive country with revenues ought to be contented enough to execute the projects in demands of what they still borrows from the World Bank for and yet there is no economical improvements in the country instead we are running economical backwards.

There are too many reasons for this, the politicians in turn may want to build some public works that may need an amount of money they may not have at the moment, so borrowing money is a must for them, it may be argued that this is bad as if the money was saved then this could be done without getting new debt, but the benefits of building that project as soon as possible could be too good or politicians may want to build this during their administration, so in the future they can claim they are the ones that made this and give voters more reasons to elect them over their competition.

[ScamViruS]

It is actually very difficult to say, because it is a decision of the leaders of a country. Even after a country has enough money, they borrow money from the World Bank. World bank gives loan for development and this loan has many facilities which corporate banks will not give loan at this interest. And so the government tries to borrow money to expand the development of their country.

The government tries to provide more benefits to the citizens by subsidizing the taxpayers' money in other sectors, and that is why they are interested in borrowing money. But it is true that there are many conditions that have to be followed completely to take a loan from the world bank, as a result of which the problems that arise due to those conditions directly affect the citizens.

[Cryptomultiplier]

At least the countries can and individuals cannot. Perhaps it also has to do with how much foreign reserve the country has in store and as such it serves as a collateral to get loans from world banks who would make profit from the interest on the loans. Else, how do banks make profit.

It could also be the loans are sort of future investment from other countries to have an influence in the borrowing country in terms of their products and initiative being welcomed to flourish as well as investors coming in to set up businesses that would be of benefits to them and the borrowing nation .

Whatever be the case, the leaders are to be held in accountability for such decisions to get loans from the world bank even when they can afford it.

[btc78]

There are two reasons i can think of why countries who can afford some projects still choose to borrow from the world bank:

[1] It’s just not enough
Maybe the government has allotted the money for another project and they want to create another one however they are not quite sure if the money they have will be enough to execute the project so they borrow from the world bank

[2] Corrupt officials
It will really be not enough if the government officials seated on position are taking the money for themselves instead of trying to figure out a way to use it for the improvements of the country

[Maslate]

As much as we don’t see contentment with the progress we are seeing in ourselves, same also applied when running a country. There’s always a need to improve and that’s I think what every country is supposed to do. With that, taking a loan from the world bank could give us the best advantage aside that it only offers low interest funds, it could also mean a lot to continue the said progress and development that we are opted to see and experience in our own country. And I guess majority of the countries are exposed to taking a loan, as long as the country itself is able to pay it back from its own profit and revenues.

[sekalitas]

This might appear a mere or cranky question but yeee. Its been one of the interesting discussions raised by the average and vulnerable citizens in the country usually at when the masses feels the governments are playing over their intelligences and making caricature of them and yet this question keep staying questionable even after being answered.
Question: Why does the independent, developed and  productive countries still borrows money from the World Bank even when they have enough to execute their excused reasons given why they have to borrows the money?
I am interested about this because in my country, we are independent and a productive country with revenues ought to be contented enough to execute the projects in demands of what they still borrows from the World Bank for and yet there is no economical improvements in the country instead we are running economical backwards.

While I lack extensive knowledge on this topic, it's worth noting that countries, even those considered productive, sometimes borrow from the World Bank for various reasons. These include addressing budget shortfalls, financing new projects, or securing favorable loan terms. It's possible that even a productive nation might require additional resources to undertake specific projects beyond its current means.

[Natsuu]

Even if a country is doing well, sometimes borrowing money from the World Bank makes sense. It can be cheaper and they get expert advice along with the cash. It's a bit like taking a loan for a big project like you can get started sooner, spread out the risk and benefit from the bank's know-how. But if the borrowed money isn't managed wisely, that's when it might feel like things aren't improving despite having enough resources

[Zlantann]

Question: Why does the independent, developed and  productive countries still borrows money from the World Bank even when they have enough to execute their excused reasons given why they have to borrows the money?

Even the richest countries of the world sometimes face some economic problems that will force them to access loans. The reason for these loans is to help the country overcome the challenges. My country is facing high infrastructural deficits which has discouraged foreign investors from investing in my country. The government claimed they are taking loans to tackle these infrastructure problems to enable them to raise more taxes from foreign investors. The origin of loans could be traced to the devastating consequence of the World War. So nations also access loans to tackle natural and unnatural disasters.

I am interested about this because in my country, we are independent and a productive country with revenues ought to be contented enough to execute the projects in demands of what they still borrows from the World Bank for and yet there is no economical improvements in the country instead we are running economical backwards.

The difference between loans accessed by developed and underdeveloped countries is in the implementation or utilization of the loans. Most loans accessed by some developing countries end up in the pockets of corrupt politicians. And the nation will become a puppet of these world-loaning organizations like the World Bank and IMF. Most countries in Africa are heavily indebted because they misused the loans they got and cannot even service these loans. These nations are now heavily manipulated by these international lending organizations.

[Volimack]

The role of the government in borrowing is more for the development of a country, the government borrows from the World Bank. If the government does all its work properly then there will be no need to borrow. The World Bank never gives loans to anyone they are given loans based on different conditions. Even after taking loans many countries do not improve the countries are in a low position.

[icalical]

One of the possible reason is that they use the money to buy/import some stuff from other country, this transaction usually done with either USD or the Seller Currency, the country who are willing to buy can't print those currency, so they either need to buy it with the currency of their country but if they do that it will hurt the value of their currency, so instead of printing money to buy other country's money that might cost more for their economic, borrowing USD from the world bank will cost less.

[bettercrypto]

Most countries owe money to the World Bank. Now the question is: why are they doing this? Some of the reasons why a country borrows are so that they can improve their economy and reduce the percentage of poverty in their country.

And the money that will be loaned to them may be used for infrastructure; it may also be for private sector development; and it may also be for social programs such as healthcare, the social safety net, or education. Now, why are they borrowing money from the World Bank? Some of the reasons are that what the World Bank gives is low in terms of interest rates, the periods of payments that are given to debtors are long, and the conditions that the World Bank gives to debtors are also very flexible.

[kryptqnick]

My country is economically weak, so we definitely need those loans to at least stay afloat while trying to build a normally-working economy. But of course, strong countries also take loans. I believe the main reason is not economic improvements but international collaboration. Taking loans and then paying back means building up mutual trust. You wouldn't give a loan to someone you don't trust, and you wouldn't take a loan from someone like that either. So it shows faith in one another, fosters cooperation.
Moreover, if a country pays its debt obligations regularly and always in time, it builds up its own positive reputation, kind of like how in some countries, it's very important for individuals to have a positive credit score, and it's considered way better than zero credit score.

[DrBeer]

The answer is quite simple: if the state needs large infusions/investments, with low interest rates, a long repayment period, and loyal conditions - it’s profitable! More precisely, it is more profitable than withdrawing huge funds from the country’s budget, or printing unsecured money.
Lending is a long-standing practice with limited resources. This applies to both states, businesses, and ordinary residents.

[qwertyup23]

Question: Why does the independent, developed and  productive countries still borrows money from the World Bank even when they have enough to execute their excused reasons given why they have to borrows the money?
I am interested about this because in my country, we are independent and a productive country with revenues ought to be contented enough to execute the projects in demands of what they still borrows from the World Bank for and yet there is no economical improvements in the country instead we are running economical backwards.

I think this has something to do with the current state of the country that borrows in the World Bank.

For example, if a third-world country is struggling with their finances, they can borrow money from the World Bank in which the latter offers zero to low interest rates. Additionally, borrowing from the World Bank can also be an opportunity in the country if the details of the loan are generous.

For example, a poor country may be offered by the World Bank zero to little interest rates which can be payable for the years to come. This does not only help that poor country but it also gives them the opportunity to create various infrastructures that will benefit them long-term.

To answer your question, I guess if the World Bank offers no interest rates on their loans, that can be quite an attractive offer. Even if a specific country has a positive revenue, it does not hurt to ask for a little more cash, right?

[Assface16678]

This is  where banking comes in and how important the banking system is in this world. You see, yes, maybe a developed and advanced country could afford their expenses, but believe it or not, they still need to borrow money from the World Bank. This is because not all the costs are done inside the country; some of the money they borrowed will be used for foreign transactions, and the country's funds are not enough to sustain that because if they did use all the funds in a country, then there would be no circulation inside the country. That's why I understand or believe that no matter how powerful bitcoin or cryptocurrency is, they can't replace the banking system. Yes,  maybe crypto will be implemented, and I believe and am hoping for that, but replacing other things as important as the banking system is what I don't believe will happen.

[Agbamoni]

I think your misunderstanding something here. A person or country wont take a loan if they know they have the money. Obviously most countries may have the availlable resources that would generate the amount or even more of what they want to borrow from the world bank but it will require sometime to be able to convert those resources to physical money. Which we know that the government needed this money urgently to carry out some projects in the country. But my only annoyance is that most of those projects are for selfish motives of which the loan is taken in the name of the country and not the government officials

[jrrsparkles]

Question: Why does the independent, developed and  productive countries still borrows money from the World Bank even when they have enough to execute their excused reasons given why they have to borrows the money?

You are asking a hypothetical question because no government had enough money to execute all the projects they promised/wanted for the people or else no one in this world will be struggling due to financial issues.

Developed countries may have more revenue but they also may have more tasks to do, so they never can find all the money that is needed to complete everything they started so they ask loans from international institutions.

[Kelward]

It's ok for a country to borrow so far they're using it for infrastructural purposes, from my understanding it's not necessary that a country should use the money in their reserve to execute any meaningful projects, because it's good to always have money in reserves, in the case of emergencies. But problems arises when a government will borrow money from world bank for a project, in the end the money will be embezzled by government officials, instead of using it for the purpose that it was borrowed. So the problem is not to have sufficient reserve and borrow for projects, a government can decide not to touch it's money and borrow, problem is corruption, they'll embezzle money borrowed and leave the responsibility of paying back to the next regime.

[|MINER|]

A country borrows from the World Bank only when they do not have enough money in their reserves.  If it happens that a country needs 100$ to implement a big project but soccer has 100$ in reserve, then it has to take a loan from the World Bank. Because if the reserve is empty, it can't be done anymore. Because a country has various tasks and  Finance is needed in various sectors.

[beerlover]

Question: Why does the independent, developed and  productive countries still borrows money from the World Bank even when they have enough to execute their excused reasons given why they have to borrows the money?
I am interested about this because in my country, we are independent and a productive country with revenues ought to be contented enough to execute the projects in demands of what they still borrows from the World Bank for and yet there is no economical improvements in the country instead we are running economical backwards.

Because it’s free money. World Bank can’t do anything aside from increasing the debt and interest if the country can’t pay it all on the given due date. World bank can’t size country nor its property while the country can pay only the interest while they can still borrow money.

They are just creating debt out of thin air just like fiat that doesn’t have any real value. Think about this, If someone will lend you big money without any risk of seizing your property you have a the whole time to repay it even for a lifetime do you think you will not  get the offer. Besides all this debt will be useless if WW3 occur so why not borrow and invest it to your country.

That is not the point, "free money" is not as free as you might think, if you get a loan and then do not pay it back, you will never be able to get another loan, until you fix the situation. This is why nations usually pay it back, even if it takes years and a lot of interest, they try to pay it back, and very few hasn't so far. The point of getting a loan instead of paying right away, is the fact that inflation exists and you could make money from it and you could pay it back with the money that helped earn income.

So let's assume you get 100 billion in loan, you build an airport in 2 different cities, giant ones, one for travellers, one for cargos let's say. You have to pay 5 billion a year, for 25 years, which makes it 125 billion paid with interest, but you make 5+ billion with those two airports, so suddenly you did not spend a dime to build them.

[Mpamaegbu]

I guess, countries that aren't in financial distress may want to borrow from international organizations to increase their interactions in the global space. Yep, that's right and don't think that's a stupid way of getting cosy with others. Being on the borrowers' list puts out the name of such country in the face of others and easily paints them as needing aids. One way of being relevant is being on the lips of others, whether for positive reason or not and these countries achieve that through this. Again, look at what happens here in this forum with members taking out loans. Not every member who's asking for loan here is in dire need of it. Some do it to up their trust score while others may be doing it to get cosy with the creditors and gain their trust.

At every point in time, everyone has their motif for doing whatever they're doing.

[Mate2237]

Op I must comment you on this topic, I love the topic but Nigeria is not developed or advanced country and I will try my best to explain your question. There are two giant financial institutions in the whole world and they are: IMF also known as International Monetary Fund and World Bank. And these financial institutions are all own by USA but to make it subtle to look like a fair institution to all, they just shared some departments to other countries to handle but everything is handled by them. And these institutions are created to underdeveloped Africa only.

They give loan to African countries with very big interest to repay back. And they are sometimes they even force African leaders to collect those loans so to repay with heavy interest. They were never created to support African countries with financial aid. Yes they help Africa countries with some amount of money in some disasters time but the money they spend on those projects are not up to one quarter of the loan one Africa country pay back to them.

[darkangel11]

Borrowing money from world bank is averagely done when the country wants to maybe take on a large project which requires more money than they have. Imagine you have $50 but you want to do something and need extra $50, then you have to borrow the money from your friend. People who doesn’t know much about you and your friend’s agreement would think that you borrow $50 which they know you can afford, whereas you added it to what you have so you can solve your problem. It can also be because the country doesn’t want to run into financial issues so they would rather use borrowed money than the one they have.

You're on the right track. Usually investors see borrowing as a way to increase productivity because that's what matters' If you can artificially increase indicators, other countries and companies will use those indicators when deciding if they should branch out to that country and this creates real jobs and real revenue for the country. In other words countries don't promote themselves like companies do. They promote themselves through economic indicators and the more money they have the more they can boost those indicators. This means that by borrowing money they're borrowing to advertise in order to attract more wealth. The leaders also do it to show themselves as more capable. Voters want healthcare, strong army, jobs, modern infrastructure and the more their leaders can achieve the greater their chances for reelection.

[_BlackStar]

A country borrows from the World Bank only when they do not have enough money in their reserves.  If it happens that a country needs 100$ to implement a big project but soccer has 100$ in reserve, then it has to take a loan from the World Bank. Because if the reserve is empty, it can't be done anymore. Because a country has various tasks and  Finance is needed in various sectors.

Even if a country has enough money to fund its long-term projects - but a greater need for money could allow the government to improve more things. I've said before why governments need loans even if they have the money - but in most cases, governments do so out of urgent need due to insufficient money to fund their long-term projects.

Financing education projects, health and infrastructure projects requires a lot of budget - the government can't just expect its domestic revenues to cover it all without any problems, that's very difficult unless the country is really rich.

[oktana]

Borrowing money from world bank is averagely done when the country wants to maybe take on a large project which requires more money than they have. Imagine you have $50 but you want to do something and need extra $50, then you have to borrow the money from your friend. People who doesn’t know much about you and your friend’s agreement would think that you borrow $50 which they know you can afford, whereas you added it to what you have so you can solve your problem. It can also be because the country doesn’t want to run into financial issues so they would rather use borrowed money than the one they have.

You're on the right track. Usually investors see borrowing as a way to increase productivity because that's what matters' If you can artificially increase indicators, other countries and companies will use those indicators when deciding if they should branch out to that country and this creates real jobs and real revenue for the country. In other words countries don't promote themselves like companies do. They promote themselves through economic indicators and the more money they have the more they can boost those indicators. This means that by borrowing money they're borrowing to advertise in order to attract more wealth. The leaders also do it to show themselves as more capable. Voters want healthcare, strong army, jobs, modern infrastructure and the more their leaders can achieve the greater their chances for reelection.

But what’s crazy is how the world bank simply gives the money to these countries? Or maybe it isn’t as simple as I assume it is. But they give money and I don’t think it has any deadline, collateral or anything as normal loans have. It just seems that the only thing that happens is that the country will be forever indebted until they pay. Many questions arise: how do they make the money they are giving? Etc.

[freedomgo]

Every country has to achieved its target goals and developments that the citizens are expecting from the country’s government. For that, the need to borrow money from the world bank may suddenly arise so they can provide the people’s needs to live a healthy and stress free life, so they can experience the benefits that the country is obliged to give to their citizens. However, there might be different issues regarding where the money is being put to, but rest assured the goal of each country’s government is to satisfy the longings of their citizens.

[jrrsparkles]

It's ok for a country to borrow so far they're using it for infrastructural purposes, from my understanding it's not necessary that a country should use the money in their reserve to execute any meaningful projects, because it's good to always have money in reserves, in the case of emergencies. But problems arises when a government will borrow money from world bank for a project, in the end the money will be embezzled by government officials, instead of using it for the purpose that it was borrowed. So the problem is not to have sufficient reserve and borrow for projects, a government can decide not to touch it's money and borrow, problem is corruption, they'll embezzle money borrowed and leave the responsibility of paying back to the next regime.

The debt of countries keep adding up due to interest rate even though it is low compared than borrowing money from private entities. Still how effective they make use of the loan money that can generate revenue to the government so they can pay back the loan but governments keep borrowing and let the next government to carry forward and this cycle keeps on going all the time.

[EluguHcman]

I am not sure about countries but I know that many persons and businesses prefer to use borrowed money because loans are cheap and many prefer loans to spending/investing their own money.

As economy demands, please what could cause an individual to have his/her sufficient funds untouched but craving to use the loaned funds to execute their personal interests projects?
It is thoughtful because it is believed that the loaned funds is usually comed with interests which probably if you have your own money spent it saves you from paying additional interest rates for loaning.

[martinex]

The answer is to diversify sources of funds even if a country is deemed capable, apart from that, its governance will be an example that can be adopted by borrowing countries in the reporting system.

Yes. We know that there are many conditions that must be met in order for an application to be accepted, but the worst is ongoing interest and debt payments. However, if the government has properly evaluated which program will be implemented and will have a good sustainable impact on society, I think it would be better to propose and implement it.

[Gozie51]

One of the possible reason is that they use the money to buy/import some stuff from other country, this transaction usually done with either USD or the Seller Currency, the country who are willing to buy can't print those currency, so they either need to buy it with the currency of their country but if they do that it will hurt the value of their currency, so instead of printing money to buy other country's money that might cost more for their economic, borrowing USD from the world bank will cost less.

Yes it cost less to borrow than to print but I don't think that countries who borrow are often doing that because they want to import something or for such purposes of importation. They are mostly borrowing to carry on some capital projects in the home country. They borrow to solve some financial issues in the country, that is what they propose to do but they often times don't carry it out as such because the money end up in people's private account which is why every government that comes talks about borrowing because the projects needed to be done are not turned out to be done.

[umbara ardian]

Instead of just handing over the cash, they're more like development ninjas. They help countries figure out what they really need, like a fancy new dam to power their whole nation, and then throw in some extra knowledge bombs to make sure it gets built right. Think of it as getting the hardware and the installation guide, all rolled into one sweet package.

Sure, there's a loan involved, but it's not just about paying back the bill. It's about using that infrastructure to boost the economy, create jobs, and make life better for everyone. Like, imagine all the businesses that can pop up with faster internet, or how many families can get electricity for the first time thanks to that new power plant. Pretty cool, right?

Now, borrowing ain't always easy, and the World Bank makes sure countries can handle it. They're like financial advisors, checking budgets and making sure the loan won't leave the country swimming in debt. Plus, everything's transparent, so everyone knows where the money's going and how it's being used.

[Yatsan]

Not because you can afford something, means you have to buy it because what's next after that ourchase? I view economy of a country the same as with a company's expenses. A company generates money but CEOs often borrow money from the banks whenever they are planning to re-branch for example simply because they want to revolve the funds as much as possible with overall maintenance and sustainance of the company. Same as with a country's money. There are a lot of continuous projects and or funding with different government organizations wherein a country's money should be alloted. Also, unfortunately, corruption could also be a reason on such act.

But again, the economy of a country is complicated; everything's should be running in long term which is why they have to borrow money if not from the worldbank, from other bigger countries. These wealth won't be paid for years and that interval should not be put into waste in order to sustain overall economic state.

[southerngentuk]

Contrary to the common misconception of dictating policies, the World Bank fosters a collaborative environment. It extends loans, grants, and technical assistance tailored to each nation's unique needs and development goals. While conditions may accompany these financial instruments, they aim to promote sound economic management, empower poverty reduction, and facilitate sustainable development, eschewing a singular "capitalist" agenda.

The IMF plays a pivotal role in safeguarding global financial stability, offering short-term loans and policy guidance to member countries grappling with economic crises. Their interventions prioritize restoring macroeconomic stability, not solely fostering "cheap labor." Although some policies might emphasize fiscal discipline and debt reduction, the ultimate aim is to cultivate an environment conducive to enduring, inclusive growth and poverty alleviation.

[STT]

An active bond market in your national currency is a benefit to all citizens and corporations, it encourages business investment and its easily a positive force and aid to liquidity.  Most countries live in fear of any kind of lack of liquidity that can occur that would starve participants in their economy.  Not all people involved will have capital and they may be productive if able to borrow but restricted otherwise.  Some traditional societies lend to each other privately but many places its a bank and the banking system generally will come from the top down so a government will always issue some bonds in order to aid traders in that currency.   I believe in private industry far more but generally a government will rate as the best rated debt and it rolls down in ratings from there down to casual debt.

[South Park]

Not because you can afford something, means you have to buy it because what's next after that ourchase? I view economy of a country the same as with a company's expenses. A company generates money but CEOs often borrow money from the banks whenever they are planning to re-branch for example simply because they want to revolve the funds as much as possible with overall maintenance and sustainance of the company. Same as with a country's money. There are a lot of continuous projects and or funding with different government organizations wherein a country's money should be alloted. Also, unfortunately, corruption could also be a reason on such act.

But again, the economy of a country is complicated; everything's should be running in long term which is why they have to borrow money if not from the worldbank, from other bigger countries. These wealth won't be paid for years and that interval should not be put into waste in order to sustain overall economic state.

Correct, while there are some people that seem allergic to debt as they have seen the effects bad debt can have on a person close to them, the truth is that debt can be useful if it is contracted for a reasonable purpose, so a government asking for money just to keep itself afloat is just wasting that money away and compromising the future of their citizens, but a government asking a loan to build a series of public works that will improve its infrastructure and will help the economy is doing the right thing.

[arimamib]

~

Correct, while there are some people that seem allergic to debt as they have seen the effects bad debt can have on a person close to them, the truth is that debt can be useful if it is contracted for a reasonable purpose, so a government asking for money just to keep itself afloat is just wasting that money away and compromising the future of their citizens, but a government asking a loan to build a series of public works that will improve its infrastructure and will help the economy is doing the right thing.

That is how the purpose for which debt is incurred can significantly impact its consequences. Debt, when used judiciously and for productive purposes such as infrastructure development or investment in key sectors of the economy, can indeed yield long-term benefits for a nation and its citizens. Governments can create a more prosperous and sustainable future for their citizens by improving infrastructure, enhancing productivity, and stimulating economic growth,

Indiscriminate borrowing solely to finance day-to-day expenses or to cover budget deficits can lead to unsustainable levels of debt and potentially jeopardize the financial stability of a nation. Governments need to exercise prudence and foresight when borrowing to ensure that borrowed funds are invested wisely in projects that generate tangible benefits for society as a whole. While debt can be a useful tool for financing development and achieving national objectives, it should be approached with caution and responsibility to safeguard the interests of current and future generations.

[ChiBitCTy]

Why doesn anyone borrow money when they have the money to pay for something? It's always better to use someone elses money, even if it comes at a cost, as long as that cost can me made up for.  For example I'm getting ready to buy a new car.  I could pay that car off, but I wont because if I take a loan (with a 20% down payment and excellent credit) I will be able to invest the difference, make up for the interest % charge and then some by investing the difference.  This is why.. that way there's money to invest or buy other goods and or services while also continuing to use it for investment purposes.

[davis196]

This might appear a mere or cranky question but yeee. Its been one of the interesting discussions raised by the average and vulnerable citizens in the country usually at when the masses feels the governments are playing over their intelligences and making caricature of them and yet this question keep staying questionable even after being answered.
Question: Why does the independent, developed and  productive countries still borrows money from the World Bank even when they have enough to execute their excused reasons given why they have to borrows the money?
I am interested about this because in my country, we are independent and a productive country with revenues ought to be contented enough to execute the projects in demands of what they still borrows from the World Bank for and yet there is no economical improvements in the country instead we are running economical backwards.

Rich and productive countries don't borrow money from the World Bank. The rich countries are emitting government bonds and sell them on the global financial markets. Are you sure that the rich countries have enough money to cover all their needs? Many rich countries have big budget deficits, that's why their borrow money to cover their government spending. Otherwise they will have to raise taxes or cut government costs. The simple answer to your question is "because it's easier that way". It's easier to get into more debt, instead of trying to put your finances under control. Financial leverage is also a thing. Countries that have big levels of debt like USA, Japan, China and the UK look wealthier than countries, who aren't so well developed, but have lower levels of national debt.

[Linggajanitra]

Public debt is one of the big problems today. However, the debt taken by the government in the last few decades is mostly used to finance unimportant expenses. In other words, it is transferred to live according to the ability of our country, our country chooses to continue to indebted not to worry about how the debt will be paid back in the future. The impact is that almost all major countries in the world in very vulnerable situations. Many officials try to justify this with the argument that high public debt is the price to be paid to have an advanced economy.

The reason for developed countries is fond of debt is the debt needed to withdraw economic growth. This is almost similar to a company that is in debt to finance projects or new businesses to pursue more profits. And, the current debt rating is closely related to the reputation and condition of the country's economy. Developed countries, very much better debt rating than developing countries. And even in the currency investors choose investment in the currency they know and trust, such as US dollars. This is why the government of developed countries can at will issue bonds. The benefits are not obtained by developing countries in debt. Because the developing state government can issue debt in its own currency, but it's just that it is very risky to domestic investors. America is a country that really takes advantage of this advantage. They print dollars to withdraw the circulation of dollars around the world through the issuance of debt letters.
As the debt rating affects interest, the state reputation also affects the interest in the debt letter. With developing countries, they have to pay higher interest rates and of course there are consequences of their debt in a stronger foreign currency to balance the risk of investors who want to buy their debt letters. Developed countries can also be a lot of debt because they are supported by high tax revenue. The opposite thing in the country develops the ratio of tax revenue is often still low. So that sometimes in the scenario there is bad, because the tax revenue is still low, the state debt payment is developed by issuing new debt alias digging hole closing hole.
This is because state assets cannot be confiscated to pay back funds. So that when the country develops unable to pay, they will re -negotiate which is often also detrimental to investors. And also in developed countries do not consider coruspsy a big problem. So they dare a lot to debt, because the history of the use of funds from debt in the past is considered successful. But with the many benefits does not mean that developed countries are not risky in debt. Government debt may have a bad impact if the management is carried out badly.

So what I can conclude why the country is often in debt is to avoid oppotability loss where the reason for borrowing debts is because of the needs that need to be spent by the state and their nature cannot be postponed. And providing assets for the next generation, this is intended that state debt can be an investment that will meet the justice between its generation by inheriting several assets. And there are also incomplete state revenues, such as taxation, customs, non -tax and grant state revenue. While the consequence of the difference in lack of state income and expenditure is the APBN deficit. Therefore it requires state debt to stimulate the people's economy. Because that way the shopping policy can be prioritized to be more productive. And there is also a debt to maintain economic growth which due to many infrastructure projects resulting from government debt, although the results cannot be felt in the near future. And debt can also develop financial markets.

[blckhawk]

The reason why they still borrow is probably because they can pay in terms of favors, say for example, Country A is in dire need of funds because they've gone over their annual budget at the 2nd quarter of the year already and World Bank is there to offer the loan to Country A, now World Bank is consisted of Country B, C, and D and the World Bank knows that they're going to have a hard time paying it and so they add some clauses to the terms of the loans so that the countries would benefit from the loan at least for the time being that the loan isn't paid like for example, Country B has some interests in building something in Country A then they can just do some lobbying stuff that will make it easy for Country B to build things there, I don't know if I'm right but this is what my teacher told me about how these loans work.

[Kakmakr]

Well, most countries cannot fund all the large projects from their tax income, so to expedite these projects, they borrow money from developed countries.

A large portion of the tax income goes to the payment of government employee salaries and benefits, so there are not enough tax money to fund large projects. ( upgrading roads and water pipes or building dams)

The government is a business built on tax payers money and most large companies borrow money from investors or sell shares or bonds to fund large projects.

[shield132]

This might appear a mere or cranky question but yeee. Its been one of the interesting discussions raised by the average and vulnerable citizens in the country usually at when the masses feels the governments are playing over their intelligences and making caricature of them and yet this question keep staying questionable even after being answered.
Question: Why does the independent, developed and  productive countries still borrows money from the World Bank even when they have enough to execute their excused reasons given why they have to borrows the money?
I am interested about this because in my country, we are independent and a productive country with revenues ought to be contented enough to execute the projects in demands of what they still borrows from the World Bank for and yet there is no economical improvements in the country instead we are running economical backwards.

Developed countries, that took loans from the World Bank did it after World War 2 to rebuild their economy. I don't know any developed country that takes loan from World Bank. Can you name one? As I know, at the moment developed countries donate money to the World Bank, they don't take it. Developing and least-developed countries take loans from the World Bank, the loan is fulfilled by rich countries like the US, Australia, Canada, Denmark, France, Germany... Poor countries receive loans with low to zero interest rate. The purpose of this loan is to improve their living and help them develop.

[Spaceman1000$]

I am not sure about countries but I know that many persons and businesses prefer to use borrowed money because loans are cheap and many prefer loans to spending/investing their own money. I believe it's the same with countries. Instead of raising taxes, raising retirement age and other unpopular measures, why not just borrow some money if it's easily available?

Loans are not cheap, they come with a price which we call interest, these interest are high in percentage especially if a country is coming to borrow because they believe with time you will grow the money to pay back, I mean you're a sovereign nation so gathering the capital and interest to pay back won't be a issue they believe. However there is always a saying that he who goes borrowing go sorrowing, because taking a loan is almost like a rope tied on your neck until you upset that loan with its interest the rope will not be removed on your neck. so it's not always rosy for countries to go and borrow either from the IMF or any other sovereign wealth fund, I've known of a case of some countries not being able to pay back the loan at the stipulated time they where given and they've surrendered a government own generating asset to the loan issuers.

[angrybirdy]

Well, most countries cannot fund all the large projects from their tax income, so to expedite these projects, they borrow money from developed countries.

That's what our country did, especially when the former presidents of our country approached and made friends with other presidents to borrow money, but the worst part is that there is no concrete plan to use the money they loaned, and the people who will suffer are the people who pay the right tax, but what they pay is not benefited. funny right? Then with the size of our country's debt, maybe until many generations have passed, our country will not be used up or able to pay.

[someone703]

Efficient governance hinges on a nation's ability to manage its fiscal resources effectively.  National governments, much like businesses, require a steady stream of revenue to fund essential services like healthcare, education, and national defense. This revenue is primarily generated through a tax system, where citizens and businesses contribute a portion of their income. Additionally, governments may collect levies on specific goods or impose duties on imported products.

However, there are times when a government's spending surpasses its income, leading to a budget deficit. This situation necessitates responsible fiscal management strategies. One approach  involves strategic borrowing. Borrowing allows governments to undertake crucial infrastructure projects or invest in long-term growth initiatives that might not be feasible with current revenue alone.

[red4slash]

Don't think that developed countries don't have any debt at all because in the end, it will increase the stability of their country because after all, debt is not a bad condition if you can use it properly.
There are several advantages that will be owned such as from a known currency or even several other conditions such as interest rates and tax ratios and high GDP will actually make them have a positive advantage in the loans made.

In addition, we can know that as long as they borrow it means they will definitely get more benefits so that for large countries sometimes the amount of borrowing will be much larger because they realise that it will make them more stable in terms of long-term economic strength.

[uneng]

Question: Why does the independent, developed and  productive countries still borrows money from the World Bank even when they have enough to execute their excused reasons given why they have to borrows the money?

Maybe to execute even more constructions at same time? Time is money, and for countries and businessmen it's preferable to borrow money to maximize their productions, as the final income after the construction is done will reward them enough money to pay the loan back and still generate massive profit for themselves from that moment on. It works like a long term investment which will return very sweet profits.

On the public sphere it's specifically interesting to borrow money, even though the government already has a large source of income, because usually interest rates are low, and since the public entity lasts "forever", there is no reason to avoid having some continuous debt.

I am interested about this because in my country, we are independent and a productive country with revenues ought to be contented enough to execute the projects in demands of what they still borrows from the World Bank for and yet there is no economical improvements in the country instead we are running economical backwards.

Well, then the money must have been being managed poorly, or the people in charge of your country are allotting this money to their own pockets, what is really common in many governments around the world. Personally, I can say the same thing about my country, because it's a very rich one, large in extension, while producing enough food to feed the whole world, although there is never prosperity and a strong economy going on for its citizens... I don't blame the government, though. I blame the countrymen who choose their representatives accordingly to their own personal morals and values.

[Albarq]

Even though it is difficult to understand,on average every country has a loan from the world bank and it seems like it is mandatory for the leader in

power at that time and the economic crisis that hit, plus the injection of insufficient funds for a country's development,could
happen to the country.developed countries are almost the same as developing
countries and world banks cannot do much by providing loans.

[RockBell]

lets see the government as a business and each country have there own reserve and  every country really on there foresight reserve  and you have to have an equivalent foreign money in the reserve before printing, because if they don't do it that way the money will lose it value look at what happened to Zimbabwe that is exactly what will happen to any country that that tries to print money without having the equivalent value of that in foreign currency but if you look at countries like us there own reserve they usually make use of gold. and another thing is that if you look at it the government don't have money and the only thing we can do is to rely on revenue generation and other stuffs like that so the only way to get money is to borrow and it will have to be other currency. and in conclusion printing to much money in circulation will affect the economy of that country and that country's currency will lose its value and it will take time to actually reclaim it except they will stop using there own currency.

[batang_bitcoin]

Any potential answer has been said but a country or a government is also like a businessman. They don't want to use their own fund for building infras and new projects. A project that will generate them money is likely just being financed by the world bank and that's how they're going to return and pay it once those projects are operational and also start to make money. I'm not sure why even rich countries does need to do that but basically, there's real economics on it.

[Samlucky O]

I am interested about this because in my country, we are independent and a productive country with revenues ought to be contented enough to execute the projects in demands of what they still borrows from the World Bank for and yet there is no economical improvements in the country instead we are running economical backwards.

The problem of your country is  bad leaders and mismanagement, is only a country that has no good governance that will have many Natural resources yet they take loan from world bank. I myself has asked that question countless times but I just concluded that the men in power are the reason behind it. The system of government is a poverty planed government brought upon by evil, bad, and corrupt leaders with selfish interest of doing what pleases them after long awaited time of power deprivation. Since they have struggled for position and power for long and yet they where unable to get it , the slightest opportunity given to them has been misused due to greed. They practice a system of govern they called " it is my own turn system of government" a situation where power is given to someone or group of people and they think that this is there last chance, it then means that all what they were concerned of, was to enter the position and take there own cake. And never have a better plan. Appointed government personnel is given power to run the affairs of the government In a truthful, peaceful, love and honesty etc with the notion of a good governance, but if they fail to do that the reverse will be the case. In conclusion what could only make a country to have natural resources and still borrow money is because of bad leadership and and poor economic planning.

[ancafe]

Question: Why does the independent, developed and  productive countries still borrows money from the World Bank even when they have enough to execute their excused reasons given why they have to borrows the money?

The logic is why they are willing to borrow money from the World Bank when the country's financial resources are still sufficient. Usually countries want to lend money to the World Bank because of the country's development needs, both physical in nature and the development of the resources needed.

I am interested about this because in my country, we are independent and a productive country with revenues ought to be contented enough to execute the projects in demands of what they still borrows from the World Bank for and yet there is no economical improvements in the country instead we are running economical backwards.

I don't know for sure what the reason is for your country to lend money to the World Bank, but this practice is carried out by many countries that need additional budgets for development in that country. Poor state management can destroy the economy so the government must try to find additional money for the country. For example, if they try to build infrastructure that is a bit forced so that the availability of money in the country is insufficient so they have to lend money to the world bank.

Problems arose again when the debt repayment system came into effect and if the strategic projects being built did not produce profits then the state had to pay the debt from its people's taxes. This is where problems arise and the country will not be able to balance income and expenditure, which will cause problems.

[Tigerheart3026]

the government will go to borrow money from world bank, i see in my country government borrowing money from world bank to build a bridge it's 6.15 km long and spend almost $3.6 billion and now government collect money or earn money from people who's using this bridge, part of the loan can aslo be paid from this money. a government taken loans money for infrastructural development in their country,

[slapper]

Why do rich nations continue use the World Bank's loan window? Isn't it puzzling? This is about leverage and financial strategy. Despite their wealth, these nations borrow. Why? Rates of interest. It should be obvious to borrow at low rates for higher-yield investments or infrastructure. The irony is that these governments preach fiscal restraint while their ledgers show debt and reliance

You're right. Prosperity and widespread borrowing are incompatible. It's more than money, man. International finance's madness is like playing with fire. The terrible irony? High-stakes loans and interests hurt everyday Joe and Jane. Loan ledgers increase while economies falter. Borrow-and-spend cycles keep nations in economic regression rather than growth

[puloweh555]

What I know is that a country borrows from the World Bank for a project that will grow the economy of their country. And they are given a nice interest given by the borrower, like the US country; they offered a nice interest.

Even our country borrows money from other countries for infrastructure projects called build, build projects. That's why there are other countries that borrow money, and then the corrupt official governments just steal it.

Countries that are in debt certainly have things that must be resolved in the interests of their people in general and state debt is positive if the state owes debt for the right purposes. Debt is used to finance productive things, so that the results are greater than loan interest, but still state debt must be safe with the JDP ratio of state income and state debt must be monitored so that its use is not misused or corrupted.

Apart from that, the ratio of state debt in the form of foreign loans/foreign currency is minimized, if necessary, 100% of the debt is in the form of domestic debt to the people. This debt actually brings prosperity to the people, because the interest is enjoyed by the people themselves, for example: Japan. National debt is always measured by a result called ICOR. the extent of the benefits/results from the debt. If there is a loss, there must be a mistake in targeting development or it has been corrupted. This means that state debt does not always have to be thought of negatively, if the debt is used appropriately and carefully and there is strict supervision.

[Asuspawer09]

Most of the time countries just do it for development for sure something like a big project that they are planning like roads, instruction, bridges, etc. which could be a big help to the country. This project cost millions of dollars they probably cannot afford all of the government if they just going to pay it all at once, the world bank surely is going to be a great leverage as long as the country has a good record as a country that can pay its debt. Having debts is not actually going to be a bad thing if a country cannot really generate a huge amount of income at once, like on a natural disasters like earthquake or storm, it could easily destroy a huge of places and cost a huge amount of money which something that a country cannot foreseen, that emergency money that we needed is going to be great in order to recover fast in we encounter this kind of problems. As long as this money helps improve our way of living and actually contributes when it comes to the economic aspect on the country it will be a huge help and can be a good thing when it comes to generating money so that the country can easily repay its debt.

There are for sure other sides of this like lending money so that they could have a claim on the land of the country that has debt on them, which probably going to be silent colonization of other countries, I think I watched something like it on youtube about china doing this to other countries.

[FanEagle]

Apple got a loan to build their campus, when they had 100 billion in cash. Honestly, I do not know why they wouldn't do it because I like to not have a debt, that personally is a very big deal for me and paying my debts back is something I really like to do and feel proud about, it is something as serious as anything else.

But. when we are talking about a situation where we can see the profits rising as much as we do, then we realize that they are making a debt to grow and make more later on. You build a bridge with the debt, and then charge anyone who use that bridge, and make profit, you build an airport and charge all the companies that work there, you make anything and charge and profit that way the debt turns into profit.

[dansus021]

well to be honest I just scroll a thread and found your and Im just curious as you just do quick google search and found Countries borrow from the International Monetary Fund (IMF) and the World Bank for various reasons, primarily related to economic and financial stability, development, and support during times of crisis.

I mean, I have an crazy idea what if the government just print out money out of thin air and then inject it to build lets say a toll a hospital and school but for-profit purposes after they create a money lets say 1 B to build hospital and then after the hospital got profit 1 B they just burned the money out of circulation did u guys get it.

[retreat]

A country's debt and private debt are two quite different things. Maybe many people ask, why is a country that is already developed and large and has a fairly high national income, but still continues to borrow from the World Bank? this is because countries need it to develop their economies without disrupting their finances. Because loans from the World Bank usually have low interest and longer loan terms. They also have professionals who can help a country to develop their economy. So a country has carefully considered why they take a World Bank loan, because it is profitable for them.

[Youngkhngdiddy]

A country's debt and private debt are two quite different things. Maybe many people ask, why is a country that is already developed and large and has a fairly high national income, but still continues to borrow from the World Bank? this is because countries need it to develop their economies without disrupting their finances. Because loans from the World Bank usually have low interest and longer loan terms. They also have professionals who can help a country to develop their economy. So a country has carefully considered why they take a World Bank loan, because it is profitable for them.

  Countries borrow money from the World Bank to make up shortfalls, fund new projects and sometimes they borrow because they have no choice or think that they can just boost their economy with a cheap loan which turns into a vicious cycle commonly known as the 'Debt Trap'. When a country borrows from the World Bank (or the IMF, or a foreign country, or foreign banks), it is not getting any nicely colored pieces of paper. It is getting some real goods or services. In case of a World Bank project, it might be a power plant, or a water treatment facility, maybe just food, and maybe healthcare or education. You may read in the paper that a country X is getting 500 million dollar loan to build a power plant - but this often means the World Bank is paying some construction firm from an advanced country to build the power plant and country X is getting so and so many tons of steel, concrete, wires, turbines and many other things arranged in a form of a power plant. Country X will be able to consume more after the World Bank project is done - it will have more electricity. Some of this electricity might be exported to pay back the loan, but hopefully the World Bank and the country concerned made sure the project is profitable and the country becomes better off.
   If government print money to pay off the national debt, inflation would rise. This increase in inflation would reduce the value of bonds. If inflation increases , people will not want to hold bonds because their value is falling. Therefore, the government will find it difficult to sell bonds to finance the national debt. They will have to pay higher interest rates to attract investors. If the government print too much money and inflation get out of hand, investors will not trust the government and it will be hard for the government to borrow anything at all. Therefore, printing money could create more problems than it solves. While countries can print their own currency, doing so excessively can lead to inflation and devaluation of the currency. Borrowing from international organizations like the World Bank allows countries to access funds while managing the impact on their domestic economy. When a country prints* its own currency, it just creates more colored pieces of paper. It creates no real value. People in the country cannot consume more, because nothing extra was produced. Printing too much currency just creates inflation.

[tyz]

Question: Why does the independent, developed and  productive countries still borrows money from the World Bank even when they have enough to execute their excused reasons given why they have to borrows the money?

I think there a couple of reasons why they do. One could be fiscal pressure and a budget deficit. Even well-off countries like China may need to borrow to cover budget deficits, particularly those arising from fiscal pressures facing certain regions or provinces within the country . Also attractive borrowing terms could oftentimes be a reason. World Bank loans often offer lower interest rates compared to domestic lending rates, making them an attractive option for countries like China. The World Bank was created to support countries that could not access capital on reasonable terms to meet their development needs. While China may not fit this description today, it continues to borrow, possibly to address specific development requirements .
Even though developed and productive countries have substantial resources, they may still borrow money from the World Bank to adress specific fiscal pressures, take advantage of attractive borrowing terms and meet their developmnt needs.

[Tony116]

Every country has to achieved its target goals and developments that the citizens are expecting from the country’s government. For that, the need to borrow money from the world bank may suddenly arise so they can provide the people’s needs to live a healthy and stress free life, so they can experience the benefits that the country is obliged to give to their citizens. However, there might be different issues regarding where the money is being put to, but rest assured the goal of each country’s government is to satisfy the longings of their citizens.

I strongly agree with this statement because every country wants to develop their economic conditions through developing their country. Because of this reason, every country tries to develop its transportation system by developing roads, flyovers etc.

For an example- In Vietnam, lots of new bridges, roads, and flyovers are recently made which greatly impact on the economy of Vietnam. For doing these developing works Vietnam takes different types of loans. without taking a loan it can't be possible with their own fund. Because most of the funds which are collected by different types of tax are used to provide the salary of government employees. So if any country wants to develop their overall condition then they must take loans.

[AmoreJaz]

Every country has to achieved its target goals and developments that the citizens are expecting from the country’s government. For that, the need to borrow money from the world bank may suddenly arise so they can provide the people’s needs to live a healthy and stress free life, so they can experience the benefits that the country is obliged to give to their citizens. However, there might be different issues regarding where the money is being put to, but rest assured the goal of each country’s government is to satisfy the longings of their citizens.

I strongly agree with this statement because every country wants to develop their economic conditions through developing their country. Because of this reason, every country tries to develop its transportation system by developing roads, flyovers etc.

For an example- In Vietnam, lots of new bridges, roads, and flyovers are recently made which greatly impact on the economy of Vietnam. For doing these developing works Vietnam takes different types of loans. without taking a loan it can't be possible with their own fund. Because most of the funds which are collected by different types of tax are used to provide the salary of government employees. So if any country wants to develop their overall condition then they must take loans.

Every country has their own reasons why they are taking the loans. So if they see the advantage of taking a loan, they would do it even if they have enough money in their vaults. But as you gave example of what's happening in Vietnam, they are using it to improve their transportation and so their economy. And for other countries, I would say, they have other things to attend to, depending on their economic goals and financial needs.

In general, countries basically want to increase its capital spending to economic stabilization. Now, it depends on their current needs whether to course thru the borrowed funds to government projects or support developing businesses.

[dezoel]

Every country has their own reasons why they are taking the loans. So if they see the advantage of taking a loan, they would do it even if they have enough money in their vaults. But as you gave example of what's happening in Vietnam, they are using it to improve their transportation and so their economy. And for other countries, I would say, they have other things to attend to, depending on their economic goals and financial needs.

In general, countries basically want to increase its capital spending to economic stabilization. Now, it depends on their current needs whether to course thru the borrowed funds to government projects or support developing businesses.

Many developing countries borrow from other nations to meet their basic needs. Unfortunately, my country is also among those that have accumulated substantial debt from larger countries. While this may seem off-topic, it's crucial to highlight that nations relying on foreign borrowing often lag in development.

When a country borrows from another, the lender imposes its terms and conditions. Failure to repay the loan on time can result in relinquishing valuable assets to the lending country. In a vicious cycle, some countries take out additional loans to repay existing debts, trapping themselves further in debt.

Consequently, a country that relies on loans begins to compromise its sovereignty. I contend that any country borrowing extensively from others ultimately undermines its development and freedom.

[AVE5]

My country is economically weak, so we definitely need those loans to at least stay afloat while trying to build a normally-working economy. But of course, strong countries also take loans. I believe the main reason is not economic improvements but international collaboration. Taking loans and then paying back means building up mutual trust. You wouldn't give a loan to someone you don't trust, and you wouldn't take a loan from someone like that either. So it shows faith in one another, fosters cooperation.
Moreover, if a country pays its debt obligations regularly and always in time, it builds up its own positive reputation, kind of like how in some countries, it's very important for individuals to have a positive credit score, and it's considered way better than zero credit score.

That's the reality fact. Underdeveloped countries needs the borrowed funds to build their economical Infrastructures in other to elevate the national economy ratio even as that, most of the developed countries do still borrows money to meet up some stipulated economic strengths.
Sometimes just as you @kryptqnick has narrated, not that the countries are insufficient of funds to carry our their task at the point of borrowing but they indulges on the borrowing to attract investors and the cooperative affairs. They practically tends to gain global trusts which also literally spreads about positive tags of the nations which in most cases foreign investors, corporative affairs and the intercontinental affairs could find them worthy and truthfully transparent to lias with.
And by so doing, the economy ratio of the country is being broaded to yielding economy initiative in returns.

[Fortify]

This might appear a mere or cranky question but yeee. Its been one of the interesting discussions raised by the average and vulnerable citizens in the country usually at when the masses feels the governments are playing over their intelligences and making caricature of them and yet this question keep staying questionable even after being answered.
Question: Why does the independent, developed and  productive countries still borrows money from the World Bank even when they have enough to execute their excused reasons given why they have to borrows the money?
I am interested about this because in my country, we are independent and a productive country with revenues ought to be contented enough to execute the projects in demands of what they still borrows from the World Bank for and yet there is no economical improvements in the country instead we are running economical backwards.

It would help if you gave particular examples, because outside of extraordinary events - rich and developed countries tend not to rely on world bank loans. There are examples, take black Monday in the UK for example, a while ago where financiers targeted the country strategically to make a lot of money and it actually worked, shorting the pound sterling or something along those lines. That required a big handout, but it is usually paid back much quicker than many borrowers otherwise would. In fairness, it is often the richer countries that contribute chunks of the funds that get lent out, so if they have to rely on them occasionally that feels like a fair reward and they'll every so often let struggling countries off debt, as long as reforms are taking place.

[harapan]

This might appear a mere or cranky question but yeee. Its been one of the interesting discussions raised by the average and vulnerable citizens in the country usually at when the masses feels the governments are playing over their intelligences and making caricature of them and yet this question keep staying questionable even after being answered.
Question: Why does the independent, developed and  productive countries still borrows money from the World Bank even when they have enough to execute their excused reasons given why they have to borrows the money?
I am interested about this because in my country, we are independent and a productive country with revenues ought to be contented enough to execute the projects in demands of what they still borrows from the World Bank for and yet there is no economical improvements in the country instead we are running economical backwards.

Borrowing from the World Bank not only makes economic sense or stability for those countries,but it also benefits the World Bank.Well developed countries are intentionally getting into debts at the costs of the lives of the citizens.

We are in a global economy where growth is expected to remain stable and extremely buoyant,but it just the reverse that we see every passing day.The world bank is expected to play a role of assisting developing countries achieve economical stability and growth.They're meant to offer knowledge,and expertise experience.

[topbitcoin]

Question: Why does the independent, developed and  productive countries still borrows money from the World Bank even when they have enough to execute their excused reasons given why they have to borrows the money?

I think there a couple of reasons why they do. One could be fiscal pressure and a budget deficit. Even well-off countries like China may need to borrow to cover budget deficits, particularly those arising from fiscal pressures facing certain regions or provinces within the country . Also attractive borrowing terms could oftentimes be a reason. World Bank loans often offer lower interest rates compared to domestic lending rates, making them an attractive option for countries like China. The World Bank was created to support countries that could not access capital on reasonable terms to meet their development needs. While China may not fit this description today, it continues to borrow, possibly to address specific development requirements .
Even though developed and productive countries have substantial resources, they may still borrow money from the World Bank to adress specific fiscal pressures, take advantage of attractive borrowing terms and meet their developmnt needs.

Talking about a country including a rich and productive country like China, I agree with you that fiscal pressure and budget deficits are one of the reasons for a country to borrow from the world bank. The loan terms are quite attractive, such as lower interest rates than usual, this could be an attractive option for countries that need capital to carry out development. And even though developed countries do have quite large resources, there are still many developed countries that try to utilize external resources such as loans from world banks with the aim of meeting development needs in certain fields.

I strongly agree with this statement because every country wants to develop their economic conditions through developing their country. Because of this reason, every country tries to develop its transportation system by developing roads, flyovers etc.

Transportation infrastructure is a major part of a country's efforts to increase economic development and the welfare of its population. Therefore, borrowing money is an alternative step in dealing with this situation, because it can help the country raise funds for infrastructure projects without affecting other important sectors such as government programs or payroll costs. At the same time, taking out loans can be a practical tool for financing strategic development projects aimed at stimulating long-term economic growth.

[Casdinyard]

From a businessperson's perspective, it's always better to start making your money with capital that does not come from your own pocket.

What a lot of businessman and tycoons do when they setup new properties and ventures is not start it with money that comes from their pocket. Cause at the end of the day, that's millions of dollars of money that could've been allocated to more important stuff, like paying off an overdue debt, or mobilizing campaigns and events that would magnify the product/service's name to the public. What they do is take out a loan in the bank for the same amount of money that they require to get the whole business going, and instead use that to set it up. They'd use the money they got from the business to set the whole thing in motion, and for the payments? They use a portion of the profits they claim to pay it off in installments. This way, the whole business is kept alive and profitable for the company, and the bank's satisfied and safe cause they're getting the money that they gave out.

This is the very reason why countries and governments take out loans instead of using their own money to start campaigns and programs. It's much safer from an economical standpoint, and at the end of the day, unless you defaulted to the world bank in the past they'd always give you money no matter how much money you owe them.

[hyudien]

Any potential answer has been said but a country or a government is also like a businessman. They don't want to use their own fund for building infras and new projects. A project that will generate them money is likely just being financed by the world bank and that's how they're going to return and pay it once those projects are operational and also start to make money. I'm not sure why even rich countries does need to do that but basically, there's real economics on it.

You need to know that after the second world war, almost all countries experienced a crisis and to repair these losses, there was a loan option offered by America, in other words, whatever wealth or natural resources a country had had the potential to become a crisis. profitable, still requires financial support. can be used if there are no supporting funds. So instead of building from scratch, improving loan infrastructure is the solution, to be able to speed up the process and require supplies of machines, raw materials and everything needed by countries that are just recovering from war, they need to collaborate with other countries that are ready to provide assistance . but with certain conditions. For example, what has happened recently is that the country of Afghanistan has just become independent and to repair all the infrastructure destroyed by the war, they are now opening relations with various countries to quickly get support in handling all the facilities so that they can become a developed country.

Therefore, making a loan is the right tool, and in this case world banks are an option. But regardless of the pros and cons, for me this cannot be avoided.

[Renampun]

This might appear a mere or cranky question but yeee. Its been one of the interesting discussions raised by the average and vulnerable citizens in the country usually at when the masses feels the governments are playing over their intelligences and making caricature of them and yet this question keep staying questionable even after being answered.
Question: Why does the independent, developed and  productive countries still borrows money from the World Bank even when they have enough to execute their excused reasons given why they have to borrows the money?
I am interested about this because in my country, we are independent and a productive country with revenues ought to be contented enough to execute the projects in demands of what they still borrows from the World Bank for and yet there is no economical improvements in the country instead we are running economical backwards.

If we discuss debts created by a country, the discussion will be very long. Moreover, debts created by a country are not the same as individual debts. Therefore, even though a country has money, it does not necessarily mean that they do not borrow money from world banks, they still need it to maintain the stability of their currency and economy because printing more money will only create hyperinflation and the end will be a bankruptcy of the country.

[dezoel]

From a businessperson's perspective, it's always better to start making your money with capital that does not come from your own pocket.

What a lot of businessman and tycoons do when they setup new properties and ventures is not start it with money that comes from their pocket. Cause at the end of the day, that's millions of dollars of money that could've been allocated to more important stuff, like paying off an overdue debt, or mobilizing campaigns and events that would magnify the product/service's name to the public. What they do is take out a loan in the bank for the same amount of money that they require to get the whole business going, and instead use that to set it up. They'd use the money they got from the business to set the whole thing in motion, and for the payments? They use a portion of the profits they claim to pay it off in installments. This way, the whole business is kept alive and profitable for the company, and the bank's satisfied and safe cause they're getting the money that they gave out.

This is the very reason why countries and governments take out loans instead of using their own money to start campaigns and programs. It's much safer from an economical standpoint, and at the end of the day, unless you defaulted to the world bank in the past they'd always give you money no matter how much money you owe them.

That is if you have a well-detailed plan and are very sure that it will go well because if not, your burdens are going to get doubled because apart from a failure in your chosen business, you still have an existing obligation which is to pay the money that you have borrowed.

A business is still an important thing and if they know that they can afford it, what's the sense of still loaning a money? Sure they can use those money to pay a debt but the thing is they still have another debt. This is not far from borrowing money to pay the other due loan. Anyway, I know one reason on why loaning money is beneficial. It has to do with the rising inflation rates.

[YOSHIE]

Why does a country borrow money from the world bank even when they can afford it

Central/international banks were formed only for countries that needed loans. As far as I know, if a country relies on income from within the country alone, it is not enough to carry out infrastructure development, health, education and so on, Each country that requires loans cannot be more than a percentage of the country's income, this is generally done based on the rules and policies of each country.

The world bank makes the biggest money from debt interest, for this reason the world bank has rules for countries that have never borrowed/sanctioned for this. It is not surprising that like it or not, countries have to carry out debt based on the rules enforced by the world bank, for example: Singapore, America, their dollar currency has the highest value, it could be said that this country has no shortage, but they still have debts to world banks.

In other cases, if a country relies on state income, it is unable to boost the country's economic growth. The consequence is that the country has unexpected expenditure, Another reason that I know is that countries have to go into debt to inherit assets or legacy for a better next generation. There are many other reasons why countries have to go into debt, maybe different countries have different reasons.

[hefyuluyda]

Desperation,schemes or pure ignorance(it's not uncommon for the entire government of a country to be clueless) and then the powerful countries nowadays leverage that, creating almost infinite debt traps for these poor countries.

[el kaka22]

Could "building a credit" be a reason? I mean normal people do that, I have an insanely high credit score, last I checked even though I live in a very poor nation, I can take out 90k loan, mind you the average yearly salary here is 8k, so I can take out more than 10x amount in debt if I want to because I have built a great credit score in the past 10 years, took out tens of thousands of dollars and paid it back all the time, and never been late to any of my debt neither.

I wouldn't take out that much credit unless I have a very crucial life or death need, so its useless to me, but if a nation could build a credit score like that, they could take that out and build infrastructure, schools, roads, hospitals, airports, docks and so forth.

[coolcoinz]

The World Bank is an institution that allows rich nations to take profit from the poor and they do it all lawfully.

In case you didn't know, the World Bank is a bank owned by a number of rich countries who make money by giving loans to those who are not members of the group and then taking advantage of them the way your bank can take your car if you used a loan to finance it. A bank that is a country, can take land and resources from other countries. It can force certain behaviors like trade routes, military aid, and so on.

Leaders take these loans because they want to show off to their constituents. They want to build something from nothing so they build it with someone else's money.

[darkangel11]

But what’s crazy is how the world bank simply gives the money to these countries? Or maybe it isn’t as simple as I assume it is. But they give money and I don’t think it has any deadline, collateral or anything as normal loans have. It just seems that the only thing that happens is that the country will be forever indebted until they pay. Many questions arise: how do they make the money they are giving? Etc.

That's very simple, they make it the way all governments make money - by printing it. Printing taxes all the holders of the currency. Your parents who worked hard to have some savings in the bank. It also taxes people who have loans because to "fight" the inflation central bank will increase rates which means your loan is now more expensive and your monthly installment goes up.
It's all a scam if you ask me. You play by their rules from the start and they change these rules as they go.

[Yaqs15]

I am not sure about countries but I know that many persons and businesses prefer to use borrowed money because loans are cheap and many prefer loans to spending/investing their own money. I believe it's the same with countries. Instead of raising taxes, raising retirement age and other unpopular measures, why not just borrow some money if it's easily available?

some countries prefer loans than using their own money due to the fear of unforeseen circumstances. so for that, they will decide to borrow money that they will be using so as not to leave their foreign reserve empty in case of emergency issues. For instance, emergency issues like COVID-19 that happened in 2019 to 2020 when almost everywhere in the world knows about. And also sudden war between Ukraine and Russia require funds for a particular country to survive, even the economy of the country will be unstable due to lack of peace and harmony.
   During this time, everyone knows about the curfews and lock downs in the affected areas which will hinder their day to day activities and will lead them to go into borrowing.

Borrowing money from world bank is averagely done when the country wants to maybe take on a large project which requires more money than they have. Imagine you have $50 but you want to do something and need extra $50, then you have to borrow the money from your friend. People who doesn’t know much about you and your friend’s agreement would think that you borrow $50 which they know you can afford, whereas you added it to what you have so you can solve your problem. It can also be because the country doesn’t want to run into financial issues so they would rather use borrowed money than the one they have.

Yes, exactly they are a lot of countries that borrow money to help them complete their uncompleted projects and pay them back with interests.
Some even borrow money to start and complete their projects with the agreement that they will pay them from the revenue generated from this project, and when payment is completely made, then, they will stop the payment. And by so doing, they will not have to use their own money and everything will be moving fine.
   But this one which country has to take loans and use one of their main source of income as collateral, to me, this type is a very dangerous one which need to be review.

[macson]

the government will go to borrow money from world bank, i see in my country government borrowing money from world bank to build a bridge it's 6.15 km long and spend almost $3.6 billion and now government collect money or earn money from people who's using this bridge, part of the loan can aslo be paid from this money. a government taken loans money for infrastructural development in their country,

This kind of practice also often happens in my country, our government makes large loans to other parties for infrastructure development and is paid in installments, here the conclusion i can get is that the government is trying to get cash quickly for development and payments. with the installment method over the next few years, as long as the money borrowed is used for the right thing then that is a good thing but if the money is used for corruption, that is the work of a scoundrel.

Desperation,schemes or pure ignorance(it's not uncommon for the entire government of a country to be clueless) and then the powerful countries nowadays leverage that, creating almost infinite debt traps for these poor countries.

Debt traps are often used by strong countries to control the resources of poor countries and one example is China, they have controlled several poor countries in Africa, they are really leeches.

[oktana]

But what’s crazy is how the world bank simply gives the money to these countries? Or maybe it isn’t as simple as I assume it is. But they give money and I don’t think it has any deadline, collateral or anything as normal loans have. It just seems that the only thing that happens is that the country will be forever indebted until they pay. Many questions arise: how do they make the money they are giving? Etc.

That's very simple, they make it the way all governments make money - by printing it. Printing taxes all the holders of the currency. Your parents who worked hard to have some savings in the bank. It also taxes people who have loans because to "fight" the inflation central bank will increase rates which means your loan is now more expensive and your monthly installment goes up.
It's all a scam if you ask me. You play by their rules from the start and they change these rules as they go.

How do you mean increase the rates? Can you explain. If you mean the rates on the borrowed money then I agree. I did a little research later and I found that the world bank makes money from the interest they charge, but it left me to wonder how much interest it is because I don’t think it is a lot. If it was a lot, countries wouldn’t be borrowing heavy amounts of money.

[ndutndut]

A country's debt and private debt are two quite different things. Maybe many people ask, why is a country that is already developed and large and has a fairly high national income, but still continues to borrow from the World Bank? this is because countries need it to develop their economies without disrupting their finances. Because loans from the World Bank usually have low interest and longer loan terms. They also have professionals who can help a country to develop their economy. So a country has carefully considered why they take a World Bank loan, because it is profitable for them.

Yes that's right. I think almost all countries have debt. As long as the debt is for productive purposes there is no harm, there is actually no need to pay it off as long as the ratio to GDP is healthy and the money generated exceeds the interest. It's just that managing a country's finances is not the same as managing personal finances, the scale and complexity are much different, so each country needs to be careful because if the country can manage its debt well then the debt can become leveraged.

Because it must also be known that state debt is a development catalyst instrument. For countries that aspire to become developed countries, debt is the solution because without debt the development process will take a very long time and may not even be implemented. However, a country needs good debt management because there are several countries that have failed to pay their debts and some of their country's assets have been taken over by debt-giving countries, such as airports, ports and so on.

[GeorgeJohn]

There is something that I want to outlined for countries that borrowed money from other countries instead of borrowing in World Bank is like it seems World Bank don't borrow some countries money because they know quite well that that particular country may not return that money and if they fail to return the money nobody will fight for them that is why a country borrowed a money from another country knowing that if they fail to return the money they will be a fight between the both countries, that's my taught

[Yaqs15]

Any potential answer has been said but a country or a government is also like a businessman. They don't want to use their own fund for building infras and new projects. A project that will generate them money is likely just being financed by the world bank and that's how they're going to return and pay it once those projects are operational and also start to make money. I'm not sure why even rich countries does need to do that but basically, there's real economics on it.

  Because, some of these countries do that to avoid problems that might come up in the near future. They also do it when they know that they can get it for now and what they want to do with the money is not an emergency issue. They do it with the fear of not being able to get access to it when an emergency situation occurs, so instead of taking from their account, they rather borrow it from the world bank account to carry out what they want to do with the money like infrastructures and projects.

Most of the time countries just do it for development for sure something like a big project that they are planning like roads, instruction, bridges, etc. which could be a big help to the country. This project cost millions of dollars they probably cannot afford all of the government if they just going to pay it all at once, the world bank surely is going to be a great leverage as long as the country has a good record as a country that can pay its debt. Having debts is not actually going to be a bad thing if a country cannot really generate a huge amount of income at once, like on a natural disasters like earthquake or storm, it could easily destroy a huge of places and cost a huge amount of money which something that a country cannot foreseen, that emergency money that we needed is going to be great in order to recover fast in we encounter this kind of problems. As long as this money helps improve our way of living and actually contributes when it comes to the economic aspect on the country it will be a huge help and can be a good thing when it comes to generating money so that the country can easily repay its debt.

There are for sure other sides of this like lending money so that they could have a claim on the land of the country that has debt on them, which probably going to be silent colonization of other countries, I think I watched something like it on youtube about china doing this to other countries.

  Some time countries do this when they know they have what other country needed. So they do it in form of batter. That's, they borrow money from other countries to carry out what they want to do with it and then repay the money with what they have. Some time, they don't borrow real cash, but employ them to carry out the project they want to carry out when they know that it will generate a revenue, then, the money borrowed will then be repaid back from the revenue generated from the project.

[dezoel]

There is something that I want to outlined for countries that borrowed money from other countries instead of borrowing in World Bank is like it seems World Bank don't borrow some countries money because they know quite well that that particular country may not return that money and if they fail to return the money nobody will fight for them that is why a country borrowed a money from another country knowing that if they fail to return the money they will be a fight between the both countries, that's my taught

I don't understand your writing clearly, I think you want to say that many countries don't take loans from the World Bank because they won't pay back, so the World Bank can't do anything and other countries that borrow money from it can go to war with each other if it is not repaid. First let me tell you that whenever the World Bank lends money to a country, it is not at all that the World Bank cannot do anything if its loan is not returned, there is also a limit to borrowing from the World Bank, if you borrow more than a limit, your country becomes a defaulter, and no country wants to become that, so when a loan is taken from the World Bank, it is very important to pay it back above the fixed interest, and that is what every country wants.

The second thing is that when a country is taking a loan from another country, they make some decisions at the same time which are fulfilled simultaneously. A rich country can either give charity to a poor country or if a loan is given, will give it under some conditions, and no country lends to another country to the extent that it has to go to war with that country to get it back, because loans are always conditional, as you may have heard is the give-and-take era. If something is given, then something is taken, I think you don't have enough knowledge about this, you need to study more about foreign policies.

[Nheer]

if you already have enough money for the development of a country in the current fiscal year but still borrow to the world bank. it means that the country's leaders are stupid. because borrowing at the world bank there are conditions that must be fulfilled which are detrimental to a small country and very beneficial to a large country. besides that it also has high interest in its payments.

Exactly what i thought too, why borrow money when you have enough to handle the affairs of the country. Most countries that borrows money are actually short of finances to meet up the country’s budget and the only was is to borrow money and it is just as the principle of individuals borrowing money from the bank, you will have to meet certain requirements to qualify for a loan and certain things are being considered before issuing a loan to a country in need like the GDP of the country and other factors as well. The interest rate will definitely be high making it difficult for smaller countries or under developed countries to meet the demands of the loan.