<![CDATA[Every country requires financing for its development from both domestic and foreign sources. Many countries take on foreign loans to offset their development financing deficits. However, these foreign loans carry a default risk, necessitating prudent management. This research was performed to evaluate the contributions and management of foreign loans based on the principle of prudence using a normative method. This research regarded primary data, secondary data, and other forms of data to arrive at conclusions. The results showed that foreign loans primarily serve to cover a country's development balance deficit and must be managed with caution. One practical measure is requiring recipients of foreign loans to have their debt independently rated by a rating agency. Moreover, the usage of foreign debt should be critically assessed to ensure it fosters economic growth, and authorities should avoid deploying these funds for consumer purposes.]]>
Copyrights © 2024
