Debt is measured as the value of borrowed funds, expressed as a percentage of the gross domestic product. Foreign debt (red dots) is borrowed outside the domestic economy; creditors may include other governments or international financial institutions such as the IMF. Total debt (blue dotted line) is the value of all amounts owed by the government to creditors both foreign and domestic. Source: International Monetary Fund.
Borrowed funds, prudently managed, are valuable supports to developing economies. But excessive debt can kill development when too much wealth is tied up in debt service. Money earmarked for interest payments abroad is not available for domestic investment in health, education or economic activity. High levels of debt often presage deep economic problems.