Rising Arab Debts: Record Numbers and Critical Challenges Facing Economies

The attention of economic analysts is turning towards the figures for the external debts of Arab countries, which reveal escalating financial burdens at a time when the region’s economies are facing pressures from multiple sources. The data shows the Arab Republic of Egypt leading the list of Arab countries in terms of total debt volume, opening a broad debate on borrowing policies and budget strategies.

The Arab Republic of Egypt carries the heaviest burden among Arab countries, with its external debt estimated at approximately $165 billion. Economic experts attribute this figure to massive infrastructure projects, a significant portion of which were financed through foreign loans, in addition to the challenges imposed by global economic conditions and fluctuations in the local currency exchange rate. Reports confirm that part of this debt is directed towards productive investments expected to yield benefits in the medium term.

Sudan and Algeria in Advanced Positions.. Varying Ratios to GDP

Sudan comes in second place with an external debt estimated at $60 billion, followed by Algeria with about $50 billion. Here, a crucial factor in debt analysis emerges: the debt-to-GDP ratio, which provides a clearer picture of the economy’s ability to bear these burdens. Some countries with relatively high debts possess strong economies or significant natural resources that enable them to manage the repayment of these obligations better than other countries with lower absolute debts but narrower economic capabilities.

The Impact of Debt on Development Programs and Social Policies

Experts say that the rise in external debt places constraints on the public finances of countries, as an increasing proportion of annual budgets is directed towards servicing this debt through installments and interest. This, in turn, may shrink the space available for spending on essential services such as health and education and limit governments’ ability to provide support to citizens during periods of high prices and living crises.

The Libyan Context and Learning from Regional Lessons

Although Libya does not appear on the list of the most indebted countries, the experiences of its neighbors carry important lessons for policymakers in Tripoli. These figures reveal the importance of developing financial strategies that balance the need for external financing for development projects with maintaining a sustainable debt ratio that does not burden future generations. They also confirm the need to enhance transparency in debt management and loan contracts to ensure that borrowed funds are directed towards projects with clear economic and social returns.

The Future of Arab Economic Cooperation and Mechanisms to Alleviate Burdens

Arab economic organizations call for activating mechanisms of financial solidarity among Arab countries and the possibility of providing concessional loans from countries with financial surpluses to those suffering from high debt burdens. They also point to the importance of developing integrated Arab financial markets that can provide alternative financing to borrowing from abroad under more flexible terms.

Arab Republic of Egypt

The Arab Republic of Egypt is a transcontinental nation in North Africa and the Middle East, renowned as the cradle of one of the world’s earliest and most influential civilizations along the Nile River. Its history spans over 5,000 years, from the ancient pharaonic dynasties that built the pyramids to successive Greek, Roman, Arab, and Ottoman rule, culminating in its modern independence in the 20th century. Today, it is a major cultural and political center in the Arab world, home to iconic monuments like the Giza Pyramids, the Sphinx, and countless artifacts in institutions such as the Egyptian Museum.

Egypt

Egypt is home to one of the world’s oldest civilizations, which flourished along the Nile River from around 3100 BCE and is famed for its monumental pharaonic architecture, including the Pyramids of Giza and the Great Sphinx. Its long and storied history spans ancient kingdoms, Ptolemaic and Roman rule, the Islamic era, and its modern identity as a leading Arab nation. Today, its immense cultural legacy, preserved in sites like Luxor and the Egyptian Museum, continues to draw global fascination.

Sudan

Sudan is a Northeast African country with a rich ancient history, most notably as the home of the Kingdom of Kush, which ruled from the city of Meroë and even conquered Egypt to establish the 25th Dynasty. Today, it is known for archaeological sites like the Meroë pyramids and the ancient temples of Naqa and Musawwarat es-Sufra. Modern Sudan has a complex history of colonial rule and gained independence from Anglo-Egyptian control in 1956.

Algeria

Algeria is a North African nation with a rich history shaped by indigenous Amazigh (Berber) cultures, successive empires like the Romans and Ottomans, and over a century of French colonial rule before gaining independence in 1962. Its cultural landscape features renowned ancient sites such as the Roman ruins of Timgad and Djemila, both UNESCO World Heritage Sites, as well as the historic Casbah of Algiers. Today, it stands as the largest country in Africa, where its Arab-Amazigh heritage and Islamic traditions are central to its modern identity.

Libya

Libya is a North African country with a rich history rooted in ancient civilizations, most notably as the site of Phoenician, Carthaginian, and Greek colonies along its coast, later becoming a core province of the Roman Empire. Its modern history was significantly shaped by Italian colonization in the early 20th century and the long rule of Muammar Gaddafi from 1969 until the 2011 revolution. Today, it is known for its vast Sahara desert landscapes and UNESCO World Heritage sites, such as the ruins of Leptis Magna, a remarkably preserved Roman city.

Tripoli

Tripoli is the capital and largest city of Libya, located on the country’s northwestern coast. Historically, it was founded by the Phoenicians in the 7th century BCE and has since been ruled by a succession of powers including the Romans, Arabs, Ottomans, and Italians, which is reflected in its diverse architecture like the ancient Medina and Red Castle (Assai al-Hamra). Today, it serves as Libya’s major political, economic, and cultural center.