Discipline: Social Science
This paper recognizes the presence of sovereign debt as primary means of financing its expenditures. It practically covers the gaps between cash outflows and inflows from a country’s revenues such as those coming from taxes. However, when a country’s debt goes too high that it already has difficulty in paying it off, sovereign bankruptcy occurs. This study dwells at the factors that lead to sovereign bankruptcy among ASEAN countries in terms of business confidence, credit management, resource availability and market stability. To measure the indicators in determining the nations in the verge of being bankrupt, the researchers use the data depicting the corruption perception index, GDP and investment climate index. Furthermore, data regarding the ease of doing business rankings, credit ratings, surplus/ deficit of the government budget, external debt, current account balance and inflation rate are also considered. These indicators are believed to be suggestive of a country’s capability of sustaining its overall debt, highlighting the point that an ASEAN country should take into account all its resources to ensure that it doesn’t go bankrupt as a nation especially now that it is looking into integrating itself into one economic ASEAN community.