Rich governments have once again failed to force big banks to cancel, or even suspend, debt payments during the pandemic.

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Hi John,
Rich governments have once again failed to force big banks to cancel, or even suspend, debt payments during the pandemic. This is another huge missed opportunity that will prevent low income governments from investing in healthcare and Covid-19 vaccines.

Finance ministers from G20 governments issued a statement on Wednesday saying that they recognised the importance of debt relief and affordable vaccine access to a global recovery from the pandemic.

They have again agreed to suspend some debt payments until the end of this year. But if this is supposed to be a lifeboat for struggling low-income countries, it has far too many holes.

Big banks and speculators, like BlackRock and HSBC, are making up to 250% profit on their loans to global south governments, and are currently owed enough by African governments to vaccinate the entire continent against Covid-19 three times over.

Without including these private creditors in debt cancellation, and using legislation to force them to comply, many countries will continue to fork out more to these banks than they spend on healthcare in an entire year.

We need to send a message to these banks that enough is enough. Use our online action to tell the banks to cancel the debt today:

Tell big banks to cancel the debt ([link removed])


** Zambia in default
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One of the countries worst affected by private creditors is Zambia. 59% of all the debt payments Zambia owes between now and 2024 are owed to big banks and speculators, including BlackRock.

This debt has a tangible impact on Zambia’s ability to respond to Covid-19. Just last week, a letter to the Financial Times ([link removed]) highlighted how the looming debt crisis had caused a “reduction in money available for nurses, health clinics and hospitals”.

In November, the Zambian government announced that it was unable to make some of these repayments and defaulted on its debt. Zambia requested debt relief from their creditors, but they were refused.

This makes Zambia vulnerable to being sued, most likely in British courts, for outstanding payments.

This is unjust at the best of times; it is completely indefensible in the midst of a global pandemic. Join us in calling on big banks to cancel the debt:
Tell big banks to cancel the debt ([link removed])


** Good will alone won’t work
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But while it’s vital for us to name and shame these loan sharks and vulture funds, there also needs to be political pressure to force them to act.

That pressure has been steadily building in recent months with the heads of the UN, IMF and World Bank all speaking of their frustration that private creditors are not doing their bit to relieve the debt burden on the global south.

But the most powerful governments within those institutions are yet to take decisive action, offering only warm words in the hope that the banks do the right thing.

We need more than that. With a huge amount of debt owed to companies based in the City of London, with contracts governed by UK courts, we need the UK government to begin exploring legislation that will compel private creditors to write down debts and prevent them from suing governments for unpaid loans in UK courts.

Thank you for all of your support.

Daniel Willis
Global finance campaigner at Global Justice Now

Read and share

[1] ‘Big Finance Is Bleeding the Global South During Covid-19’, 8 April 2021 ([link removed] )

[2] ‘G20 fails to force banks to cancel lower-income country debt’, 7 April 2021 ([link removed] )

[3] ‘Letter: Britain should use G7 role to urge debt relief for global south’, 1 April 2021 ([link removed])
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** The Covid-19 pandemic has pushed over a hundred million people across the world into extreme poverty.
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Lower-income countries who are taking the hardest hit from the devastating pandemic are still saddled with huge debt payments to unaccountable private creditors in the global north.

Together we can challenge this, and fight for a more just and sustainable alternative. Regular gifts give us the long-term stability to plan effective campaigns, as well as the flexibility to react to key events.

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