Trouble in paradise: The Seychelles now the world's most indebted nation

You may think times are bad here, but elsewhere in the world, people are living on tiny islands with no roads in or out, dying industries, and no hope of changing things. The Seychelles, a wee archipelago off the east coast of Africa, has just earned the least coveted award of the worldwide recession: The Country That Owes the Most.

The Seychelles have been a byword for Europe's elite jet-set, but this island nation of just 87,000 needed $26 million from the International Monetary Fund and defaulted on a $230-million bond. The U.S. dollar has doubled against its flaccid currency in the past year, which doubles the cost of imports that its people cannot live without and puts the island in much worse shape than even Iceland. Public and private debt are now roughly equal to the entire economy there. Left with so few resources, how can an island stay afloat?