Military Debt: Perspectives from the Experience of Arab Countries

Abstract

This paper highlights the importance of military debts in Arab external debt profiles. By 1990, these debts ranged between $45-90 billion--equivalent to 40% of their debts of that time--and were important in six of the nine severely indebted economies. The paper also sketches the broad features of the military credits market, which clearly affects civilian and total indebtedness. Hence, military spending and military debts are more intrinsic to debt formation than debt economics has admitted. Particularly in this region, explicit treatment of the military dimension is crucial for a more complete or accurate analysis of external indebtedness.