Hi John,
Nearly two years since the start of the pandemic, rich countries are still failing to provide genuine solutions to the Covid-19 debt crisis and are letting big banks off the hook.
The immense economic impacts of the pandemic have been deeply felt across much of the global south, exacerbating an already precarious financial situation faced by many governments.
Last year, rich countries developed an initiative to pause some debt payments, yet this led to only a quarter of repayments being suspended. According to Jubilee Debt Campaign, big banks, such as BlackRock, HSBC, UBS and JP Morgan, suspended only 0.2% of the debts they held.
Now, at the end of 2021, this initiative will come to an end and will be replaced by a new agreement that continues this failed model, asking only for voluntary participation from the banks.
Despite statements by the heads of the UN, IMF, World Bank and the Pope that private creditors should participate in debt relief initiatives, the banks still refuse.
Countries including Zambia and Chad are facing debt crises because these creditors won’t do their bit. Will you use our online form to tell big banks to cancel the debt?
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Debt justice for Zambia
Zambia is arguably the country worst affected by the debt it owes to big banks. Between now and 2024, 59% of Zambia’s debt payments are due to be paid to private sector creditors. If paid back in full, these banks could make up to 250% profit on Zambia’s debt.
These creditors have effectively forced Zambia to default on debt repayments by refusing debt relief in negotiations last year. Instead of compelling the banks to cancel debt, the international response has resulted in a new $1.4 billion loan to Zambia.
Zambia has already made cuts to public services and healthcare spending, and is now left potentially vulnerable to being sued by its creditors. And Zambia’s debt crisis will also limit the country’s ability to invest in climate change adaptation. Zambia spent approximately three times its annual climate adaptation budget on debt repayments this year.
Without their participation, other major creditors (including China) are unlikely to offer debt relief as that will only subsidise repayments to vastly wealthy financial institutions.
There will be no debt justice for Zambia until private creditors like BlackRock, HSBC, UBS and JP Morgan offer debt cancellation. Join us in calling on them to drop the debt.
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With the end of the G20’s debt suspension initiative in the next two weeks, we must push for change and demand debt justice, for Zambia and the rest of the global south.
Thank you for all of your support, and I hope you manage to have a good Christmas break.
Warm regards,
Daniel Willis
Finance campaigner at Global Justice Now
READ MORE
[1] Under the radar: Private sector debt and coronavirus in developing countries, October 2020
[2] Zambia will spend 75 times Scottish aid financing on debt repayments, September 2021
[3] Debt and the climate crisis: a perfect storm. Briefing, September 2021
[4] https://www.huckmag.com/perspectives/activism-2/there-can-be-no-eco-justice-without-debt-cancellation/. Huck Magazine, November 2021
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The Covid-19 pandemic has pushed over a hundred million people across the world into extreme poverty.
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.
If you’re not already a member, will you join today?
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