The world’s most economically stable countries and economically unstable countries
This pages is an on-going look at the world’s most economically stable (or unstable) countries. There is no concrete way to measure a country’s economic stability. Instead I’ve compiled a few metrics from a number of sources both on the web and in literature. The first metric that I’ll discuss on this page will be a history of International Monetary Fund (IMF) bailouts. The IMF is the world’s emergency lender. When a country gets too deep into debt, it has two options to pay off that debt. The first option is to print more money. The problem with doing that is it will very likely cause hyperinflation. Hyperinflation will wipe out the value of a currency, and force a country to buy things in gold or with whatever foreign currency reserves it has. It can cause horrible political instability and increases poverty dramatically among a country’s people. For these reasons countries are terrified of inflation, and in particular, paying off their debts through the printing of their currency.
The other option to pay off increasing debt is through an IMF bailout. An IMF bailout is a sign of failure on the part of the country that receives the bailout. The bailout is always linked with certain conditions. These conditions usually entail the cutting of government spending. It is very common for IMF bailouts to be quickly followed by protests and unrest as the government cutbacks force people who directly or indirectly benefited from the spending to suffer monetary loss.
The purpose of this list is to give expats and investors an idea of the economic stability of countries they plan to live or invest in. A country with a recent history of bailouts is a country that is probably not very stable. Countries that have been trumpeted as successful emerging markets need to be looked at more closely than they currently are. Many of these countries are fiscally irresponsible and may renegotiate or default against bondholders in the near future on the basis of their past history. This list seeks to give people a better view of the economic fragility of many of the world’s countries.
Though this list is a list of IMF bailouts, frequently an IMF bailout will be accompanied by a World Bank bailout or by an aid package from world powers like the United States, Japan or the European Union.
Below is a history of IMF bailouts by country. The list is not necessarily complete, and I welcome readers of this site to contribute their knowledge of bailouts I may have missed. The list includes the country, the year of the bailout, and the amount of the bailout (in dollars). The bailout amount is not inflation adjusted.
2010 — Ireland receives a US$113 billion bailout from the IMF and EU and others like the UK.
2010 — Greece receives a US$146 billion bailout from the IMF and EU.
2010 — US$15.1 billion bailout for Ukraine.
2008 — Hungary receives US$25.1 billion bailout.
2008 — Iceland receives US$6 billion bailout.
2008 — Seychelles receives a US$26 million bailout.
2002 — Brazil receives an approximately US$10 billion bailout.
2001 — Argentina receives an IMF bailout of US$48 billion.
1998 — Brazil receives a US$41 billion bailout.
1997 — US$23 billion bailout to Indonesia. (Asian financial crisis)
1997 — US$20.9 billion combined bailout to Thailand. (Asian financial crisis)
1997 — US$55 billion bailout to South Korea. (Asian financial crisis)
1996 — US$10.6 billion bailout to Russia.
1994 — Mexico receives bailout of US$50 billion.
1991 — India bailed out by IMF for approximately US$6 billion.
1982 — Mexico receives an IMF bailout of US$8.25 billion.
1978 — Greece receives an IMF bailout package of undetermined amount.
1976 — United Kingdom receives an IMF bailout of US$1.84 billion.