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.
Read the statement
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
Report reveals the challenges and risks of the growing indebtedness in Global South countries – interesting report by Latindadd
Wealthy Group of Seven (G7) countries owe low- and middle-income countries $13.3 trillion in unpaid aid and funding for climate action, reveals new analysis from Oxfam ahead of the G7 Summit in Hiroshima, Japan.
Despite failing to pay what they owe, G7 countries and their rich bankers are demanding that Global South countries pay $232 million a day in debt repayments through 2028. This money could otherwise be spent on healthcare, education, gender equality and social protection, as well as addressing the impacts of climate change.
G7 owes huge $13 trillion debt to Global South | Oxfam International