This month, two of the biggest lenders to lower-income countries, the International Monetary Fund (IMF) and the World Bank, are holding their annual meetings in Bangkok.
Officials will gather in private rooms to make decisions that affect millions of people around the world. We’ll be there, too. Inside the meetings, lobbying officials. And outside, on the streets with campaigners and activists from around the world, calling out the institutions that keep countries trapped in unjust debt.
In this blog, we explain why these meetings have become a rallying point in global calls for debt cancellation.
How the IMF and World Bank keep countries trapped in debt
These two institutions sit at the centre of the debt crisis. That’s because the IMF exists both to lend money to countries in crisis and to decide whether a country should get debt relief.
The IMF could support many more countries in getting unjust debt cancelled. Instead, both the IMF and World Bank often lend more money to countries in crisis, with harmful conditions attached.
Recipients of these loans have to agree to big cuts in public spending, which means less money for schools, hospitals and essential public services. Debt Justice research has found that in high debt countries that have received IMF loans – but not had their debt cancelled – public spending has been cut by 10%, education spending cut by 16% and health spending has fallen 18%.
Like in Egypt, which has received a series of IMF loans with harsh austerity conditions – including a sharp currency devaluation, subsidy cuts, and reduced public spending. Egypt received two IMF loans in 2020 and 2022. Between 2022-25, Egypt’s spending on both health and education decreased by 12%.
In practice, these new loans get used to pay off existing debts to private lenders like banks, oil traders, and debt vultures. It’s ordinary people who pay the price through cuts to public spending and escalating prices.
“When a country repeatedly relies on borrowing while implementing austerity measures linked to those loans, the cost of everyday life rises.
Meanwhile, wages have not kept pace, and the gap is absorbed by households themselves. People work longer hours. They reduce what they eat. They remove items from the family table. Or they send their daughters to work at an early age.”
Manar Abdelaziz, Egypt
The IMF could say that many more countries need to get their debt cancelled, and help them achieve this. Instead, they bail out private lenders, rewarding greedy financial giants with vast profits, while lower-income countries remain trapped in a cycle of debt.
We’ve seen this before
After the second world war, the IMF and World Bank were set up to be lenders of last resort for countries facing a crisis, and to fund long term development projects. But their policies are fuelling the global debt crisis – and not for the first time. In the 1980s and 1990s, these two powerful institutions made the same mistake they’re repeating now: lending more and more to countries in crisis, when what was needed was urgent debt cancellation.
These new loans paid off private banks in the US, UK, and Japan while forcing lower-income countries to cut public spending. The result? Two decades of economic stagnation and rising poverty.
The true cost of the debt crisis
Decisions made about debt can force governments to put repayments ahead of healthcare, education, climate action, and other essential needs. Like in Senegal, one of the 25 African countries spending more on debt than education, where over a million children are out of school. Or Malawi, where some schools have just one teacher for a hundred children. And we’re not only seeing this in lower-income countries: in 2010 the IMF forced Greece to carry out austerity policies that pushed unemployment to over 27%.
But people and movements across lower-income countries are organising to change those rules. They know these institutions won’t change on their own. They’re using their voices to demand justice and to build pressure that can’t be ignored. And we’ll be campaigning alongside them in Bangkok.
How the UK can help cancel the debt
Countries in debt crisis don’t need new loans. They need urgent debt cancellation.
And the UK has a particular responsibility here, because 90% of the debts owed to financial giants by lower-income countries are overseen by UK law. That means a new debt justice law in the UK would make banks and debt vultures take part in cancellation alongside other lenders, rather than being paid off while countries stay trapped.
Next year, the UK takes over the presidency of the G20 group of nations. It’s a big opportunity to turn the tide on this crisis, and the government is expected to set out its plans for the G20 during the meetings in Bangkok.
We’ll be there to make sure they hear the debt cancellation message loud and clear. But the UK government won’t take up this demand without public pressure.
Hear from us in Bangkok on 14 October
On Wednesday 14 October, we’re hosting an online event direct from Bangkok. We’ll share what’s happening inside and outside the meetings, what it means for the fight against unjust debt, and how you can be part of the movement to cancel it.