Important to draw a distinction between the two types of indebted emerging countries

We should not confuse the two types of indebted emerging countries: Those that have a high savings rate, and where the indebtedness is explained by the fact that significant savings are lent to economic agents that borrow in the same country; if savings are high and are hardly lent to the rest of the world, it will inevitably at equilibrium lead to a high debt ratio for the country, but this is not dangerous since the indebtedness reflects the country's abundant savings (examples: China, South Korea); Those where the debt to a significant extent stems from the country's external debt as domestic savings are insufficient to finance investment and a chronic external deficit. The indebtedness is then dangerous, since, as it is external, it may lead to balance of payments and currency crises (examples: Brazil, Turkey, South Africa, India).