20 Countries With the Least Amount of Debt

When it comes to judging countries on their amount of debt, the question is how do they determine how much is too much? The numbers used in this list do not include internal debt, such as that which the government accumulates, but external debt, the kind of debt that is owed to other countries. The percentages you see in this list are calculated by the amount of money owed to other countries divided by the country’s total Gross Domestic Product (GDP). GDP is simply the value of the goods and services a country produces.

A low percent of debt is not always a good thing. For example, if a country does not buy products or services from other countries, then its debt percentage would be zero. Economically that is a great number, but a national economy is supposed to support and benefit its citizens. Therefore, the standard of living may be very low in a country that has a zero debt percentage. In contrast, a country that has a higher percent of debt must also be weighed against its standard of living. Even the world of economics is not a perfect one.

20. Chile – 18.5%

Chile (pronounced (chil-LAY) has the strongest sovereign bond rating in South America. The sovereign bond rating is specific to a country rather than a broader international bond rating. Its two strengths, copper and other metals mining, account for more than 20% of the country’s GDP and its exports of overall goods and services provide roughly one-third of the country’s total GDP. It growth rate sped along at 5% a year, but has slowed to less than 2% over the last two years. According the CIA Factbook (you do believe them right?) “The Chilean Government has generally followed a countercyclical fiscal policy, accumulating surpluses in sovereign wealth funds during periods of high copper prices and economic growth, and generally allowing deficit spending only during periods of low copper prices and growth.” That fund has about $23 billion in it. Chile may be at the bottom of the list but it clearly is at the top of the list when it comes to economic stability.

19. Oman – 18.5%

Oman (pronounced oh-MAN) like the majority of Middle Eastern countries has significant oil reserves that account for its country’s revenue. In the case of Oman, that number is 84%. But also like many Middle Eastern countries, its government thought it could use a quasi-isolationist economic approach to manage its budget, which worked until oil prices crashed a couple of years ago. Beyond that, the country’s oil reserves are drying up, so now what? It has developed A 5 year plan (starting in 2015) to reduce economic dependence on GDP from 46% to 9%. How will it achieve that? Through privatization of businesses and economic diversification. The economic drag that challenges growth is the government’s decision to increase social welfare benefits in good times, so now may have to make a fair number of people unhappy if the country wants to stabilize or lower its current debt ratio.

18. Swaziland – 13.7%

Swaziland can be seen as a country within a country. That is the reality geographically as it is completely surrounded by South Africa. The logical extension of that geography is most of its economy depends on its trade with South Africa. More than 90% of its imports and 60% of its exports are with South Africa. All trade routes lead through South Africa. More than 50% of the country’s revenues come from customs duties supplied by the Southern African Customs Union, with the other half coming from incomes taxes and value added taxes. Most people basically grow their own food, yet its major export is sugar and soft drink concentrates. That makes its economy dependent on uncontrollable factors such as Mother Nature, and the unemployment rate of 28% can spiral upward with one bad year of weather. The projection is for slower economic growth in the years ahead, but seriously, the only reason this country seems to be on the list is because of the math. Maybe numbers do lie.

17. China – 16.1%

China has the potential to become the world’s economic powerhouse, but despite the reports of having already achieved that status it has a significant amount of work to do. Gradually shifting from a centralized economy to a more market-based economy has helped it improve its global status, but key economic sectors remain under government control and extremely limited opportunities for foreign investment impede its rise to the top. Its people make less than the world average income, but at the same time asks the question, “Can a country save too much?” According to economists, the answer to this is yes and lists it as one of several factors that restricts its economic growth. Maybe greed is not good. China also has had a penchant for speculative investment in the real estate sector (swampland in Florida is still for sale), and despite its reputation for academically high achieving students, the number of high paying jobs to benefit from that hard work remains low. It is easy to dismiss China as a future world economic leader, but the country has the human resources (1.5 billion people and counting) and natural resources to dominate the world economy if it can gets its political act together. The form of government continually shows itself to be key to economic success. In China, private enterprises such as small businesses are not encouraged, making the state primarily responsible for economic direction.

16. Congo – 16.2%

Democratic Republic of the Congo is an African country that, like many other countries on this list, have an abundance of natural resources or land that is ideal for growing crops. But what they also have in common is an unstable government that causes a negative impact on its economy. The Congo is only beginning to attempt to try to achieve political stability, which without it will severely cripple its economic potential. The majority of its revenue comes from mining exports, primarily copper, but like the price of many commodities has taken a significant price hit. The International Monetary Fund injected $12 billion in 2010 for debt relief, but internal corruption halted the flow of money. Americans may be sensitive to corruption in business and government but the stable form of government allows virtually everyone to benefit from all its natural resources. The Congo’s people need to get out of their own way and settle things down politically if they hope to avoid their debt level skyrocketing within the next few years.

15. Russia – 13.7%

The fragmentation of the Soviet Union has the country experimenting with a market-based economy. But after not achieving the results expected, it has largely returned to an economy controlled by the state. Free market operations in the private sector have had trouble gaining momentum as the return to the statist economy model interferes with forward progress. The government maintained control of the energy, transportation, banking, and defense-related sectors during the shift towards a market-based system, and with it control of the country’s major sources of revenue. Its major exports are oil, natural gas, steel and aluminum, all commodities that are subject to the supply and demand of other world economies. International sanctions by the United States and other Western nations, in part due to its takeover of Crimea, have caused a significant drop in GDP, but the country is recovering. The Central Bank of Russia estimates that if oil prices remain below $40 per barrel it would cause the country’s GDP to fall by as much as 5% or more. A debt ratio of 13.7% is great given the economic forces at work, but how long can Russia maintain that level?

14. Nigeria 13.2%

Nigeria, which is the southern neighbor of Niger, has one of Africa’s larger economies due to its large oil reserves. It is one of the success stories in this list because while other countries have achieved low debt levels through stagnation, Nigeria has done it through growth and a revitalized economy. It restructured its banking system, and avoided a heavy dependency on oil as a future source of revenue. Growth in agriculture and telecommunications have expanded diversification with a corresponding result in lower poverty levels. As with any expanding economy there are problems, primarily in infrastructure such as adequate power. The oil sector has shrunk every year since 2012, but its economy remains stable. What the country needs to experience sustained, long term economic growth is a political and legal system that works to bring costs and corruption under control.

13. Greenland – 13%

Yes, Greenland is still a country and its still has a solid economy. It has less than 60,000 people who live there, so from an economic perspective it is easier to manage its economy and debt since there are fewer problems to deal with. Its primary exports are shrimp and fish, and with a regular subsidy from Denmark comprising 25% of its GDP, it manages to keep its economy in order. What boosts economic growth in Greenland is somewhat different than in most countries. Unemployment rates have been kept low by one project that will be expanding one of its harbors, and the other involving the construction of a prison. Tourism is also a major industry, increasing by 20 percent over the last couple of years. It is one of the few countries in the world that is planning a deficit-free, balanced budget over the next three years. But technology may be to blame for increased public spending in education and healthcare, as many of its younger citizens are leaving the country for better job prospects elsewhere. Greenland is another country that suffers from a younger, more educated population seeking future economic prospects elsewhere.

12. Algeria – 13%

Another African country, Algeria, takes the 12th spot on the list. And yet another country whose economy is controlled by the state gets a place in the top 20 countries with the lowest debt levels. Oil and natural gas have been the mainstay of the economy for decades, and currently account for about 30% of its total GDP, 60% of budget revenues, and almost 95% of its export earnings. With external debt near 2% of GDP, its place in the top 20 is a no-brainer. But whether the country can continue on this path in their future remains a question. Development of products and services other than those that are oil and gas based is doubtful given the focus of the government on its state controlled manufacturing and supply industries. As the price and demand for oil has remained low, the country’s economy has slowed with it. A stabilization fund created to weather hard economic times has shrunk by almost $70 billion to where less than $10 billion remains. When that is gone, what will happen to its debt levels?

11. Iran – 11.9%

Americans know more about Iran from a political and military perspective, but its economy ranks 11th in the world, making it a significant force in the world economy. Though heavily dependent on its oil reserves, it has other economic sectors that are controlled by the state which add considerable revenues to its coffers. But private sector growth is bogged down by an inefficient banking system and government mandated price controls. Because of these limiting factors, corruption is widespread throughout the country, reducing tax revenues. The well-known economic sanctions against Iran by the United States and other Western countries limits economic growth, trade, and foreign investment. The limited growth of private sector jobs has resulted in many of the country’s best and brightest to leave the country and seek better employment opportunities elsewhere. The political wrangling over the nuclear weapons program will have a significant effect on future economic progress.

10. Liberia – 11.8%

Liberia sits on the west coast of Africa, and like many countries on this list, depend on foreign assistance and citizens working in other countries sending their money back home as major sources of revenue. That means the citizens who live in their country have low incomes. Recently recovering from internal wars that were fought over control of Liberia’s considerable reserves of iron ore, rubber, diamonds, and gold, businesses that had returned left due to the national Ebola outbreak. As it once again attempts to rebuild, its future economy will be dependent on a number of factors, including the supply and cost of electricity, increasing investment and trade, and increasing prices for its stash of natural resources. Perhaps most of all, the political stability of the country is essential if Liberia can continue to keep its debt levels low and GDP high.

9. Uzbekistan – 11%

At least the name of Uzbekistan may be known to many American voters from the unfortunate response of Presidential candidate Herman Cain in 2011 when asked if he was ready for the media scrutiny, to which he replied, “I’m ready for the ‘gotcha’ questions and they’re already starting to come. And when they ask me who is the president of Ubeki-beki-beki-beki-stan-stan I’m going to say, you know, I don’t know. Do you know?” (The answer is President Shavkat Mirziyoyev.) The country has adopted a Soviet-style economy that is heavily controlled by the government. Its arable land is used primarily for cotton growing, as it is the world’s 5th largest cotton exporter, while other major exports are natural gas and gold. Having Russian as a major trading partner can only help your economy, but that ties the economic success of the country to the economy of Russia. But with all major economies, being able to develop internally through foreign investment is a critical part of future growth. Seizing a foreign country’s assets as Uzbekistan has done has understandably caused foreign countries to balk to investing in the country. When other countries will not trade with you, everything from basic commodities to competitive technology will be harder to come by. If the central government doesn’t loosen up, expect this country to fall from the top 20 list.

8. Kosovo – 10.6%

About 25% of Kosovo’s revenues come from either foreign assistance or from its citizens who work outside of the country and return their earnings to their homeland. The country remains one of Europe’s poorest, in part because of an unemployment rate that tops 33% and people who do make money often will not report it to the government, reducing tax revenues. The average age of the population is 26, so many of its natural citizens leave the country in hopes for a better future. Oddly, Kosovo has a policy that prevents traveling to the EU without a visa, acting as a fuel for its youth to leave the country permanently. Inflation has been kept low due to Kosovo’s membership in the EU, but cannot expect to rein in inflationary effects unless an economic growth plan is achieved. The country gets more than half of its revenue from tariffs on imports, a policy that is expected to be phased out within the next 7 years. Unless the economy improves and younger workers opt to stay put, this is another country that could drop off the list.

7. Libya – 10%

Libya is a surprise country on this list given the international spotlight that has illuminated its problems rather than its positives. But since the removal of Qadhafi as its national leader, its national budget deficit has grown to 20% and is expected to increase as the current approach is to use government revenues to pay workers. Its well-known dependency on natural gas and oil has been curtailed as a result of the drop in oil prices, and the new government has yet to realize a comprehensive plan to improve Libya’s infrastructure. Power outages, drinkable water, and general living conditions are three areas that continue to bring instability to its people. While ISIS has been defeated in the Middle East, it remains a presence in Libya, bringing with it the threat of controlling major oil facilities and choking off revenues dependent on their production. Expect Libya to move lower on this list of drop off altogether sooner than later.

6. Estonia – 9.7%

Many people don’t know that Estonia is actually a member of the European Union. One of the key factors to consider in assessing the country’s economy is that it is highly dependent on trade, making it vulnerable to the economies of its trading partners. Economists credit Estonia’s economic fortunes with its adoption of a free market, pro-business economic agenda that has resulted in a balanced national budget. Its electronics and telecommunications sectors are credited with its strong economy, and its trading partners extend to Russia as well as members of the EU. But with economic growth comes the problem of being able to fill the many positions that is demanded by the growth. A change in immigration policy has opened the door for a potential increase in the number of workers, but the country is limiting the immigration to people who are highly skilled.

The top 5 countries are relatively unknown and remote in many cases. The other countries have a greater economic presence on the international scene, and are a better barometer of what acceptable debt levels are as a percentage to GDP.

5. Kiribati – 8.6%

Another dot in Oceania, the country of Kiribati actually is a group of 33 islands in the Pacific. Its debt has almost doubled as financing the Bonriki International Airport repair and upgrade project became necessary about 5 years ago. Much of the country’s revenue, almost half, comes from foreign aid, while the remaining amount of its revenues are generated through fishing licenses. Future economic growth is problematic as the country has a troublesome infrastructure and a shortage of skilled workers. Like many of the smallest countries, it has to import food and fuel.

4. Gibraltar – 7.5%

The Rock of Gibraltar isn’t just a catchy phrase but is an actual country that has an important strategical significance off the southern coast of Spain. It is actually an African country, but less than 10 miles separate it from the European continent. Three main industries support 85% of the country’s economy – shipping, financial services, and tourism – so it comes as no surprise that 97% of its people are employed in service industries. Economically it is described as self-sufficient. So where does its external debt come from? Yes, oil, but more specifically, refined petroleum products. It imports almost $8 billion a year in petroleum to keep its shipping and service industries well-oiled. Gibraltar may be the economic definition of a stable and favorable debt ratio even though it ranks in the top 5 countries with a low national debt. The reason is that the costs of its main import, oil, can be passed along to consumers and not have a major negative impact on the country’s revenues.

3. Tajikistan – 6.5%

This may be one of the most ignored countries on this list, yet its geographical location has political significance. To its south is Afghanistan and on its eastern border is China. It unfortunately is one of the world’s poorest countries despite its horde of various minerals because its terrain is so mountainous and the government has significant difficulties attracting foreign investment. Though it has a low external debt, its public debt exceeds 40%. It imports more than 70% of its food which is almost a guarantee that its people will pay high prices for basic nutrition. The poor economy is the result of few jobs, so people travel mainly to Russia for work and send the money back home. Those foreign earned wages make up about 50% of the country’s GDP. But that means when Russia’s economy goes south, so does the economy of Tajikistan.

2. New Caledonia – 6.5%

This country has been mentioned in a few movies, but its location off the eastern coast of Australia is generally unrecognized. It will be seeking to be free and clear of French government ties in November of 2018, as a political agreement forces a referendum to be held by that date. One reason that its people believe they can cut themselves loose from France is the economic reality the country has more than 10 percent of the world’s nickel reserves. That makes it number 2. The obvious problem is with all that metal in the earth there isn’t much land suitable for farming or growing food, thus 20 percent of their food is imported (here comes the debt). Currently they are getting about 15% of their GDP in subsidies from France, making its break challenging. Nickel is the key, and there are two nickel plants being built to increase its annual production of 94,000 tons annually. With its 2nd major source of income being tourism, 97% of the people are employed in either manufacturing or service jobs.

1. Wallis and Futuna – o%

Chances are, unless you have flown from Hawaii to New Zealand, in which case you have flown over this island country, you have never heard of its existence. But it is a real country with real people and a real government. Geographically it is located in Oceania, and has a population of just under 16,000 people. That is the size of many small cities in America. Its economy tells the story of its 0% achievement. The majority of earnings (80%) come from agriculture or working for the government (where 70% of the jobs are at). The country does get subsidies from France, but its immediate and future problem is an aging population that has done little to modernize its revenue sources. The result of that economic approach has been that many younger people are leaving the country in search of jobs elsewhere. Though the small island country is a dot in the Pacific Ocean, it has two airports with paved runways and a major seaport to connect with the rest of the world. It can be expected that Wallis and Futuna will soon join the rest of the world in debt.

So what do we learn from this list? Political stability and economic prosperity cannot be disconnected. Either the form of government or the instability of the political system (which includes corruption) undermines economic growth and in the end benefits no one. Every person in every country needs to wake up to this fact.


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