Debt and population

Your article An Indonesian bears $600 in debt links the country's debt stock to its population to illustrate the problem relating to debt servicing burdens.

This is an incorrect way to press such a point. There is no logical link (in the financial/economic sense) between the size of a country's debt and the size of its population, just like there is no such connection between a company's debt and the number of its shareholders.

What is important is to compare the size of the debt stock, the maturity of such debts (interest and principal) vis-a-vis the country's ability to generate cash. If the debts in question are foreign debts, then it is the country's ability to generate foreign currency earnings (i.e. exports, privatizations, etc) -- as well as its foreign reserves -- that are the most relevant issues for discussion.

This is a typical mistake, similar to the one comparing a huge company's market capitalization and a country's GDP to illustrate how poor a country is or, alternatively, how sickeningly rich a company is.

HIDAYAT JATI, Jakarta