Over 200 networks and organisations have signed a statement calling for cancellation of debt payments in 2020.
The statement is available here in English
La déclaration est disponible ici en français
La declaración está disponible aquí en español
A declaração está disponível aqui em português
البيان متوفر هنا باللغة العربية
And here is the full text and signatories in English:
A debt jubilee to tackle the Covid-19 health and economic crisis
1. What we are calling for
We, the under-signed organizations, aware of the severe impacts on hundreds of millions of people from the health, social and economic crises faced by countries in the global South as a result of Covid-19, urgently call for:
- Cancellation of all external debt payments due to be made in 2020.
- Provision of emergency additional finance which does not create debt.
All principal, interest and charges on sovereign external debt due in 2020 should be cancelled permanently, they should not accrue into the future. Cancelling debt payments is the fastest way to keep money in countries and free up resources to tackle the urgent health, social and economic crises resulting from the Covid-19 global pandemic.
2. Implementing cancellation of debt payments
Borrower governments have it within their power to stop making debt payments but they should not suffer any penalties for doing so. All lenders should therefore agree to the immediate cancellation of debt payments falling due in 2020, with no accrual of interest and charges and no penalties.
In the absence of a wider, multilaterally agreed debt cancellation, lenders should take the following steps:
- Multilateral institutions, including the IMF and World Bank, should offer an immediate cancellation of all principal, interest and charges for the remainder of 2020 for all countries in need, and most urgently for all PRGT and IDA countries.
- The IMF and World Bank should urge any country ceasing multilateral and/or bilateral debt payments to also cancel payments to private external lenders. Any new IMF and World Bank finance should be in the form of grants not loans, and require other lenders to reprofile the debt where sustainability is uncertain, or restructure their debt where it is unsustainable,[1] to help ensure money is used to support public policy priorities in response to the COVID-19 crisis, rather than to repay other lenders.
- Lender governments, both Paris Club members and others such as China, Saudi Arabia and Kuwait, should cancel all principal, interest and charges for the remainder of 2020 for all countries in need, and most urgently for all PRGT and IDA countries. Ideally a debt cancellation should be coordinated between lenders but should not wait for them all to agree.
- The G20 should support moves by any country to stop making payments on debt to private external lenders.
- Key jurisdictions, especially the UK and New York, should pass legislation to prevent any lender suing a government for stopping debt payments in 2020.
- Debt payment cancellations and additional finance should be free of economic policy conditionality promoting privatisation, deregulation and trade liberalisation. The crisis has been caused by exogenous shocks: developments over which countries in the global south had no control.
- Debt payment cancellation and additional finance should be designed specifically to bolster public expenditure targeted at protecting the rights and needs of populations, especially to maintain and increase social protection and health spending in response to COVID-19 and ensure relief goes directly to benefit those in need.
3. Resolving the debt crisis
Many countries were in debt crisis before the Covid-19 crisis began. Many more will emerge from this crisis with even higher unsustainable debts. Immediate cancellation of debt payments should therefore be linked to a more comprehensive and long-term approach to debt crisis resolution. As such, to make debt restructuring more efficient, equitable and successful we call for:
- The creation through the United Nations of a systematic, comprehensive and enforceable process for sovereign debt restructurings.[2]
- The IMF to introduce clear guidelines on when a debt is unsustainable, and follow its policy only to lend to countries with unsustainable debts if there is a default or debt restructuring.[3]
A process to make these changes must begin before the end of 2020.
4. The impacts of Covid-19
The global Covid-19 crisis has led to falls in commodity prices, an increase in future borrowing costs for global South governments[4], and contributed to the largest ever capital outflow from developing countries.[5] Government revenues will fall as a result, and debt payments will increase at the same time that countries need to expand healthcare and social protection in response to the crisis. Developing countries had already been facing heightened debt vulnerabilities and rising debt costs before the Covid-19 outbreak.[6] The scale of the public health crisis and need for rapid policy responses means vital government resources must be urgently directed towards the needs of populations and not diverted to lenders. The outbreaks of Covid-19 so far show that time is essential. Governments need to have resources for decisive action today. Any delay will make the pandemic more difficult to control and a later repair of economic damage more costly, especially for borrower countries.
We estimate cancellation of external debt payments in 2020 for 69 countries[7] classified by the IMF as Lower Income Economies and for which data is available, would save $19.5 billion in external debt payments to bilateral and multilateral lenders in 2020, and $6 billion in external debt payments to private lenders. If it was extended to 2021 it would save a further $18.7 billion in multilateral and bilateral payments and $6.2 billion in external payments to private lenders.[8]
5. Support for action on debt cancellation
African Finance Ministers have called for a suspension of all interest payments in 2020, and all principal and interest payments by fragile states.[9] The IMF and World Bank have called for a suspension of all debt payments by the poorest countries to other governments.[10] The United Nations Secretary General has called for debt restructuring, including waivers on interest payments in 2020.[11] Prime Minister of Pakistan Imran Khan has called for a debt write-off for his and other vulnerable countries.[12] Ecuador’s Congress has also called on the government to suspend debt payments.[13] In early March Lebanon defaulted on private external debt payments and has announced it will stop paying all foreign currency bonds.[14] Ethiopian Prime Minister Abiy Ahmed Ali has called for a widespread debt write-off, with any remaining debt not payable for ten years and limiting debt payments to 10% of exports.[15]
Signatories (273 networks and organisations in total)
International organisations and regional networks
- African Forum and Network on Debt and Development (Afrodad)
- Asian Peoples’ Movement on Debt and Development (APMDD)
- Latin American Network for Economic and Social Justice (Latindadd)
- European Network on Debt and Development (Eurodad)
- Arab NGO Network For Development (ANND)
- Red Jubileo Sur/Américas
- Third World Network (TWN)
- Focus on the Global South
- Womankind Worldwide
- Stakeholder Group of Persons with Disabilities
- Disabled People’s International
- CADTM international
- Oxfam
- ActionAid International
- CCFD-Terre Solidaire
- CIDSE
- Christian Aid
- Brot für die Welt
- The ONE Campaign
- Save the Children
- Avaaz
- Greenpeace International
- Fundación Educación y Cooperación – EDUCO
- Society for International Development
- Centre for Economic and Social Rights
- 350.org
- Medical Mission Sisters
- Médecins sans frontieres
- Africa Development Interchange Network
- Global Policy Forum
- Debt Relief International
- Youth for Tax Justice Network (YTJN)
- Fair Finance International
- Oil Change International
- Missionary Oblates of Mary Immaculate
- Sisters of Charity of Nazareth Congregational Leadership
- Federación Internacional Fe y Alegría
- Platform to Protect Whistleblowers in Africa (PPLAAF)
- International Budget Partnership
- Y Care International
- Corporate Europe Observatory
- Congregation of Our Lady of Charity of the Good Shepherd (Global)
- Migrant Forum in Asia
- Aksi! for gender, social and ecological justice
- Africa Europe Faith & Justice Network (Europe)
- GCAP – Global Call for Action against Poverty
- Education International
- North African Food Sovereignty Network (NAFSN)
- Tax and Fiscal Justice Asia
- Validity Foundation – Mental Disability Advocacy Centre
- VIVAT International
- RIPESS – Intercontinental network for the promotion of Social Solidarity Economy
- Tax Justice Network
- Economistas sin Fronteras
- Feminist Task Force
- Third World Network Africa
- Religious of the Sacred Heart of Mary NGO
- IBON International
- Arab Forum for the Rights of Persons with Disabilities
- Plataforma Mercosur Social y Solidario
- Pax Christi
- Social Justice in Global Development
- Anglican Church of Southern Africa Environmental Network
National organisations
- MIFRO – MISSÃO sem FRONTEIRAS, Angola
- CLACSO Argentina
- Aid/Watch, Australia
- Australian Federation of Disability Organisations (DPI Australia)
- Jubilee Australia
- DKA Austria (Dreikönigsakion Hilfswerk der Katholischen Jungschar)
- KOO Austria
- Südwind Verein für Entwicklungspolitik und globale Gerechtigkeit, Austria
- Bangladesh Krishok Federation
- NRDS, Bangladesh
- 11.11, Belgium
- Broederlijk Delen, Belgium
- CNCD-11.11.11, Belgium
- Entraide et fraternité, Belgium
- Associação Alternativa Terrazul, Brazil
- Central de Cooperativas Unisol Brasil
- Federação Nacional do Fisco Estadual e Distrital (FENAFISCO), Brazil
- FOAESP – Fórum das Ong Aids do estado de São Paulo
- Gestos (HIV and AIDS, communication, gender), Brazil
- Grupo de Resistência Asa Branca (GRAB), Brazil
- Instituto de Justiça Fiscal (IJF), Brazil
- Outras Palavras Comunicação Compartilhada, Brazil
- Social Action for Community and Development, Cambodia
- Women’s Network for Unity (WNU), Cambodia
- Worker’s Information Center (WIC), Cambodia
- Plate Forme d’Information et d’Action sur la Dette (PFIAD), Cameroon
- AidWatch Canada
- Canadian Council for International Co-operation
- Forum des Organsations Nationales Humanitaires et de Développement en RD Congo
- PC2D (RD.Congo) et Caritas Congo ASBL
- Commission Justice et Paix de Pointe Noire, Republic of Congo
- Convention de la Societe Civile Ivoirienne (CSCI)
- Plate forme d’autonomisation des organisations de jeunesse de Côté d’Ivoire(PAOJCI)
- Ecumenical Academy, Czech Republic
- ActionAid Denmark
- Jubileo 2000 Red Ecuador
- Finn Church Aid, Finland
- Action contre la Faim, France
- Amis de la Terre France
- Attac France
- CADTM France
- CCFD Terre-Solidaire, France
- Centre de Recherche et d’Information pour le Développement (CRID), France
- Comité français pour la Solidarité Internationationale (CFSI)
- Confédération Générale du Travail (CGT), France
- Coordination SUD, France
- Equipop, France
- Global Health Advocates France
- Grouep Initiatives, France
- Pax Christi France
- Plateforme Française Dette & Développement (PFDD), France
- Réseau Foi & Justice Afrique Europe antennne France
- Solidaires Finances Publiques, France
- act for transformation, Germany
- Aktion gegen den Hunger, Germany
- Bischöfliches Hilfswerk MISEREOR, Germany
- Bündnis Eine Welt Schleswig-Holstein e.V.
- DEAB, Germany
- Eine Welt Forum Freiburg e.V., Germany
- de – Entwicklung braucht Entschuldung (Jubilee Germany)
- hl redaction, Germany
- Informationsstelle Peru, Germany
- Netzwerk Africa Deutschland
- Transform! Europe, EU
- Abibiman Foundation, Ghana
- Abibinsroma Foundation
- Alliance for Empowering Rural Communities, Ghana
- Debtfree, Greece
- UndebtedWorld, Greece
- Plateforme d’Information et d’Action sur la Dette et le Développement- Guinée (PIADD)
- Plateforme nationale des Citoyens Unis pour le Développement (PCUD)
- Fe Y Alegria Honduras
- CROMO Foundation, Hungary
- DemNet Hungary
- Friends of the Earth Hungary
- Association For Promotion Sustainable Development, India
- Environics Trust, India
- Indian Social Action Forum
- Madhyam, India
- Mines, Minerals & PEOPLE, India
- Indonesia Water Community of Practice
- Solidaritas Perempuan (Women’ Solidarity for Human Rights), Indonesia
- Wahana Lingkungan Hidup Indonesia (WALHI)
- 80:20 Educating and Acting for a Better World, Ireland
- ActionAid Ireland
- Centre for Global Education, Ireland
- Christian Aid Ireland
- Columban Missionaries Ireland
- Comhlámh (Ireland)
- Financial Justice Ireland
- Friends of the Earth Ireland
- Jesuit Centre for Faith and Justice, Ireland
- Sisters of Our Lady of Apostles (Irish Province)
- SMA Justice Office, Society of African Missions, Ireland
- Trócaire, Ireland
- Association of Italian NGOs
- Associazione Comunita’ Papa Giovanni XXIII (APG23), Italy
- CIPSI, Italy
- Emergenza Sorrisi, Italy
- FOCSIV Italian Federation Christian Volunteering Service
- GCAP Italy
- Institute of Public Finance Kenya
- Lebanese Union of Persons with Physical Disabilities (LUPD)
- Sustainable Development Institute, Liberia
- Catholic Commission for Justice and Peace of the Archdiocese of Lilongwe (CCJP Lilongwe- Malawi)
- Centre for Social Concern, Malawi
- Centre for Social Accountability & Transparency, Malawi
- Economics Association of Malawi
- Development Communications Trust, Malawi
- Integrity Platform, Malawi
- Malawi Economic Justice Network
- Youth and Society, Malawi
- Maldives Association of Persons with Disabilities
- Halley Movement Coalition, Mauritius
- Equidad de Género: Ciudadanía, Trabajo y Familia, Mexico
- Observatorio Mexicano de la Crisis
- Youth Government of Morocco
- associacao Luarte – arte, cidadania e transformacao, Mozambique
- JOINT Liga de ONGs em Mocambique
- Mozambique Budget Monitoring Forum
- Mozambican Debt Group
- ALTSEAN-Burma, Myanmar
- National Campaign for Sustainable Development Nepal
- Both ENDS, Netherlands
- Cordaid, Netherlands
- GCAP Nicaragua
- BudgIT Foundation, Nigeria
- Attac Norway
- Debt Justice Norway
- Norwegian Church Aid (NCA)
- Norwegian People’s Aid
- Spire, Norway
- The Norwegian Council for Africa
- AwazCDS-Pakistan
- Community Initiatives for Development in Pakistan-CIDP
- Freedom from Debt Campaign of Pakistan
- Institute for Social & Economic Justice, Pakistan
- Pakistan Development Alliance
- Pakistan Fisher Folk Forum
- Pakistan Kissan Rabita Committee
- Freedom from Debt Coalition, Philippines
- Sanlakas Philippines
- ACEP – Associação para a Cooperação Entre os Povos, Portugal
- CIDAC – Centro de Intervenção para o Desenvolvimento Amílcar Cabral, Portugal
- FEC – Fundação Fé e Cooperação, Portugal
- Fundação Gonçalo da Silveira, Portugal
- Instituto Marquês de Valle Flôr (IMVF)
- MONTE, Portugal
- Oikos – Cooperação e Desenvolvimento, Portugal
- Par-Respostas Sociais, Portugal
- Plataforma Portuguesa das ONGD, Portugal
- Veterinarios sem Fronteiras Portugal
- ZERO – Association for the Sustainability of the Earth System, Portugal
- Federação das ONG em São Tomé e Príncipe
- Budget Advocacy Network, Sierra Leone
- Enabanda, Slovenia
- ISCOMET Institute for Ethnic and Regional Studies, Slovenia
- Alianza por la Solidaridad-Action Aid España
- org, Spain
- Ecologistas en Acción, Spain
- Fundación Entreculturas, Spain
- Greenpeace Spain
- Ingeniería sin Fronteras, Spain
- cat – Organitzacions per a la Justícia Global – Catalunya
- Observatorio de la Deuda en la Globalización, Spain
- Observatorio de Multinacionales en América Latina (OMAL)-Paz con Dignidad, Spain
- Plataforma Auditoría Ciudadana de la Deuda, Spain
- Centre for Environmental Justice, Sri Lanka
- Act Church of Sweden
- Diakonia, Sweden
- Alliance Sud, Switzerland
- Fastenopfer, Switzerland
- KEESA/ Swiss ADR Campaign, Switzerland
- Climate Watch Thailand
- Observatoire Tunisien de l’Economie, Tunisia
- SEATINI, Uganda
- Action for Argentina, UK
- Action for Southern Africa, UK
- Bond, UK
- Bretton Woods Project, UK
- Cafod (Catholic Agency for Overseas Development), UK
- Christians on the Left, UK
- Gender and Development Network, UK
- Global Justice Now, UK
- Health Poverty Action, UK
- Jubilee Debt Campaign, UK
- Jubilee Scotland
- Stamp Out Poverty, UK
- STOPAIDS, UK
- Tearfund, UK
- The Equality Trust, UK
- War on Want, UK
- Trademark Belfast
- Jubilee USA Network
- Uganda Debt Network
- Maryknoll Office for Global Concerns, US
- Sisters of Charity Federation, US/Canada
- Missionary Society of St Columban, US
- United States International Council on Disabilities
- ActionAid Zambia
- Campaign for Active Voter Engagement in Zambia
- Caritas Zambia
- Centre for Trade Policy and Development, Zambia
- Civil Society for Poverty for Poverty Reduction, Zambia
- CUTS International, Zambia
- Jesuit Centre for Theological Reflection (JCTR), Zambia
- Planned Governance Network, Zambia
- Transparency International Zambia
- Zambia Civic Education Association
- Zimbabwe Coalition on Debt and Development
References
[1] Under IMF policy if a government’s debt is unsustainable a full restructuring or default on the debt is meant to take place during a loan programme. A restructuring is a change in the terms of the debt which lowers the amount a lender will receive back. If sustainability of the debt is uncertain, a reprofiling is meant to take place. This moves the date of debt payments into the future so that lenders are not effectively paid off by IMF loans.
[2] See ‘We can work it out: 10 civil society principles for sovereign debt resolution’ https://eurodad.org/Entries/view/1547087/2019/09/17/We-can-work-it-out-10-civil-society-principles-for-sovereign-debt-resolution
[3] See more on this policy at https://debtjustice.org.uk/wp-content/uploads/2019/10/IMF-policy-on-debt-restructurings_English_10.19-1.pdf
[4] https://debtjustice.org.uk/uncategorized/coronavirus-worsens-debt-crisis-in-poor-countries
[5] https://www.theguardian.com/world/2020/mar/23/g20-finance-ministers-talks-hampered-by-us-china-posturing-coronavirus
[6] https://www.worldbank.org/en/news/press-release/2019/12/19/debt-surge-in-emerging-and-developing-economies-is-largest-fastest-in-50-years
[7] These are not all the countries which need debt suspension. As defined by the IMF, LIEs include 59 countries eligible for IFI concessional financing, 13 middle-income small states and four countries that have graduated from concessionality eligibility since 2010.
[8] Research by Eurodad https://eurodad.org/debt_moratorium
[9] https://www.uneca.org/stories/african-finance-ministers-call-coordinated-covid-19-response-mitigate-adverse-impact
[10] https://www.ft.com/content/6eca167c-6ec0-11ea-9bca-bf503995cd6f
[11] https://www.un.org/sg/en/content/sg/note-correspondents/2020-03-24/note-correspondents-letter-the-secretary-general-g-20-members
[12] https://www.brecorder.com/2020/03/17/580790/pm-wants-world-to-consider-writing-off-pakistans-debt-to-help-cope-with-coronavirus/
[13] https://www.bloomberg.com/news/articles/2020-03-23/ecuador-bonds-sink-as-congress-suggests-suspending-debt-payments
[14] https://www.nytimes.com/aponline/2020/03/23/world/middleeast/ap-ml-lebanon.html
[15] https://twitter.com/AbiyAhmedAli/status/1242378606543855616/photo/2