Topic: Why does a country borrow money from the world bank even when they can afford it (Read 1187 times)

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.

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

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.

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.

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.

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.

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,

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.

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?

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.

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.

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

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.

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.

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.

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.

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.

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.

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.