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> Why can't they just take loans like most Western countries do to balance their budget? Who, exactly, is going to loan them money? If Iran were a person they
by quintushoratius 6y ago
> Why can't they just take loans like most Western countries do to balance their budget?
Who, exactly, is going to loan them money?
If Iran were a person they'd have a sub-600 credit score while seeking a no-documentation car loan. Nobody in their right mind is going to loan them money for non-predatory rates.
When we talk about a country taking out loans, we're frequently talking about bonds and, if you're not the US, actually talking to banks via the IMF.
Are you going to buy Iranian bonds? Consider the following:
- Which asset(s) do you think Iran will use to pay you back? Keep in mind that their largest asset - oil - has a rocky track record.
- Loans are more likely to be paid back by a stable government. How stable do you expect Iran to be over the next 10-30 years? How likely is another Arab Spring?
- Taking the above into account, what kind of interest rate would be adequate? Is it higher than the Iranians are likely to pay? How much higher is it than they can afford right now?