***Press release***
- As world leaders come together at the IMF and World Bank Annual Meetings and G20 finance ministers meeting this week, over 500 groups from 96 countries call on them to cancel debts, including debts owed to private creditors
- Campaigners demand that this is followed by the agreement of a fair and binding framework for resolving debt crises longer term.
For more information and interviews contact [Muhammad Reza] on {081370601441}
In April G20 governments agreed to a suspension of up to $12bn in debts through the Debt Service Suspension Initiative (DSSI), to help in the fight against Covid-19. This agreement is due to run out at the end of the year. With the Covid-19 crisis far from over, 500+ civil society groups are calling on world leaders to do more, including cancelling rather than only suspending debts 1]. The statement is being sent to governments, international institutions and lender groups ahead of a G20 Finance Ministers meeting and the annual meetings of the World Bank and IMF this week.
Despite repeated calls from civil society, there has been only a partial suspension of bilateral (country to country debt) has been included in the DSSI, private lenders and the World Bank are yet to offer any debt suspension or cancellation. Over $300bn is being spent annually by lower-income countries on debt payments and there are growing calls for more action to be taken so that countries can invest in vital healthcare spending and support their economies during the pandemic.
On Sunday the UN Secretary General Antonio Guterres called on world leaders to do more to stop soaring deficits, particularly for countries in Africa, where there are 12 of the 23 countries at risk of debt distress [2].
Lidy Nacpil, Director Asian Peoples’ Movement on Debt and Development, said “Countries are being hit by an unprecedented economic shock, and at the same time face an enormous healthcare emergency. World leaders have so far failed to adequately step up to the plate. It is deeply unjust that while hundreds of thousands of people need healthcare and financial support, private lenders like banks and hedge funds continue to rake in profits while refusing to play their part and cancel debts.
“We are calling for not just debt suspension, but debt cancellation. Suspension merely kicks the can down the road and will lead to a greater debt crisis in the near future. If world leaders truly want to support a just recovery from the pandemic they must cancel the debt now and set up a far and transparent debt resolution mechanism to avoid future debt crises. And the most important, yet ignored part of debt problems is the right to reparations. The world need to take the next step on victim justice, not criminal justice, said Muhammad Reza from KRuHA / People’s Coalition for the Right to Water.
Signatories of the statement include KRuHA (People’s Coalition for the Right to Water) and the regional and national networks of the African Forum and Network on Debt and Development (AFRODAD), Red Latinoamericana por Justicia Económica y Social (LATINDADD), Asian People’s Movement on Debt and Development (APMDD), ActionAid International and 350.org.
The statement calls for:
- Immediate and unconditional debt cancellation from all lenders, including bilateral, private and multilateral lenders, for at least the next four years. The G20 to support moves by any country to stop making payments on debt to private external lenders.
- The use of these resources for healthcare, social protection and other essential services and rights.
- National Debt Audits, to critically examine national debts
- The creation through the United Nations of a systematic, comprehensive and enforceable process for sovereign debt restructurings.[3]
- Reparations for the damages caused to countries, peoples and nature, due to the contracting, use and payment of unsustainable and illegitimate debts and the conditions imposed to guarantee their collection.
Notes
[1] The full statement is available here: https://kruha.org/open-letter-to-all-governments-international-institutions-and-lenders/?lang=en
[3] See ‘We can work it out: 10 civil society principles for sovereign debt resolution’ https://eurodad.org/Entries/view/1547087/2019/09/17/We-can-work-it-out-10-civil-society-principles-for-sovereign-debt-resolution