Developing countries are being blamed for having borrowed and spent irresponsibly. But they have only been doing what foreign powers and financial interests have urged them to do.
Developing Countries’ Government Debt Crises Loom Larger | Inter Press Service (ipsnews.net)
Public debt in African economies has become a subject of critical examination as nations grapple with the challenges and opportunities it presents. This research paper embarks on a comprehensive exploration of the complexities surrounding public debt in Africa, aiming to shed light on its historical roots, legal foundations, theoretical dimensions, creation processes, rights and liabilities, and transparency mechanisms. By addressing these multifaceted aspects, this study seeks to offer valuable insights and policy recommendations for effective debt management and governance
Contractionary economic trends since 2008 and ‘geopolitical’ conflicts subverting international cooperation have worsened world conditions, especially in the poorest countries, mainly in Africa, leaving their poor worse off.
Conditions and prospects are so bad that two well-known globalisation cheerleaders have appealed to rich nations for urgent action. Former IMF Deputy Managing Director and World Bank Senior Vice-President, Professor Anne Krueger and influential Financial Times columnist Martin Wolf warn ominously of the dire consequences of inaction.
Article by Jomo Kwame Sundaram
As the end of 2023 approaches, 136 countries are considered to be in a critical debt situation. At the same time, fiscal space has been reduced, leading many, including governments, UN agencies and some international NGOs, to point to debt swaps as an innovative solution for tackling sovereign debt problems, while also generating resources for the Sustainable Development Goals (SDGs) or climate action. Therefore, debt swaps, while not new, are gaining increasing attention in international development and climate forums, particularly due to the proliferation of so-called “debt-for-nature swaps”.
Read the new report by Eurodad and others
More than 550 economists, development and climate experts including leading economists Yanis Varoufakis, Thomas Picketty, Jayati Ghosh, Ann Pettifor and Jason Hickel, philosopher Olufemi Taiwo and climate activists Vanessa Nakate and Hilda Nakabuye, have signed an open letter calling for debt cancellation at COP28. The open letter also received support from almost 300 organizations worldwide, including some of the most relevant climate networks, development international NGOs and human rights organisations.1
The statement, coordinated by The Asian People’s Movement on Debt and Development, Latindadd, The European Network on Debt and Development (Eurodad) and Debt Justice, calls for cancellation of the debts of lower income countries on the front line of the climate emergency, and for rich countries to significantly increase levels of grant-based climate finance.
The IMF and World Bank closed its historic Annual Meetings in Marrakech – the first in Africa for 50 years – without delivering a response that matches the urgency of the moment.
The institutions still failed to recognise that we are in the worst global south debt crisis ever. Their rhetoric on the impact of severe debt burdens was not matched by action to speed up their sluggish response so far. Beyond baby steps by the Global Sovereign Debt Roundtable to agree on basic elements of debt restructurings, neither the IMF and World Bank, nor the G20 Finance Ministers, took any steps to respond to the calls by civil society and global south leaders, to deliver on debt cancellation and debt architecture reform.
Read Eurodad’s analysis
ActionAid’s report ‘Fifty Years of Failure: the IMF, Debt and Austerity in Africa’ is based on new research and powerful personal testimonies from across 10 African countries. It is timed to coincide with the first IMF / World Bank Annual meeting to be held in Africa for 50 years. The report documents how the IMF imposes austerity policies, undermining health, education and wider development across the continent. Rather than seek systemic solutions to the mounting debt crisis in Africa, and rather than exploring obvious alternatives such as progressive tax reforms, the IMF continues to enforce cuts to public spending that hurt women and disadvantaged groups most acutely.
Fifty Years of Failure: The IMF, Debt and Austerity in Africa | ActionAid International
A guide to collecting, analyzing, and presenting data, to shed
new light on how the global debt crisis impacts people’s rights.
By the Centre for Economic and Social Rights
Today’s capitalism bears uncomfortable semblance to the Soviet economic system. Three key features I contend, are held in common between the systems. They are:a) central planning
b) the credits, subsidies and protections provided by central banks to failing ‘enterprises’
c) the requisitioning of surpluses and/or the looting of corporate profits and capital gains by powerful apparatchiks/elites.
Read the very interesting article by Ann Pettifor
An increasing number of middle and low income countries are facing crushing economic strains. From Argentina to Pakistan to Zambia, living costs are rising, economic growth is stalling and absolute poverty is increasing. At the same time, governments are finding it staggeringly difficult to find ways to pay the interest and principal on their vast foreign debts.
In classic bureaucratic language, the IMF and the World Bank call these the “debt distressed countries.” The truth is that the economic conditions, and the policies that governments feel forced to impose, are gravely adding to poverty.
Read the article about debt distress
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