Foreign debt refers to the amount of money that a country owes to foreign lenders, which can include commercial banks, governments, or international financial institutions. This debt can be in the form of loans, bonds, or other financial obligations and often requires repayment with interest, impacting a country's economic stability and policy decisions. In the context of economic strategies like populism and import substitution industrialization, foreign debt can heavily influence national policies as countries grapple with balancing domestic needs and international financial obligations.
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