Original Sin: Is Mongolia Facing an External Debt Crisis?

While many developing nations struggle under chronic debt distress, the current generation of Mongolians are considered to be fortunate people as they have no original sin, or foreign denominated debt, left to them by the previous generations. Yet they may not be as fortunate any longer as they have created excessive debt in recent years since the cancellation of large debt and the fresh start of 2005. Through the abuse of power and position, the authorities have altered the debt management laws that allowed them to contract more debt in excess of economic capacity. The debt sustainability analysis concludes that pre-crisis conditions have been formed and the crisis is imminent. Authorities will have to tackle both public and private debt in order to have realistic views on and solutions to the debt issue. Having no viable economic means in sight to overcome the debt crisis, what will the government do? We don't know yet, but certainly there are difficult times ahead for the government.