As the super-rich gather at the World Economic Forum (WEF) in Davos this week, some of the wealthiest bosses of the biggest private lenders to countries in debt crisis will be meeting to discuss what “bold, collective action” looks like in today’s economy.
The chair of the WEF board this year is the boss of financial giant BlackRock, an asset manager which has made billions out of the debt crisis, alongside others such as JP Morgan and Goldman Sachs. We recently exposed how BlackRock and their clients stand to make $2.1bn from loans to countries in or at high risk of debt distress – while their CEO Larry Fink is worth an eye-watering $1.2bn. This week, Fink will be chairing meetings of fellow billionaires as they discuss their joint vision for global trade and finance.
BlackRock is the largest investment company in the world. They are one of the biggest lenders to many lower-income countries, including Zambia and Ghana – two countries in crisis that have spent years trying to get debt cancelled. During the pandemic, BlackRock refused to suspend Zambia’s debt repayments along with other big global banks. At the time, Zambia was spending three times more on debt repayments than on health, education and sanitation combined. In the end, BlackRock and other lenders managed to negotiate ‘debt relief’ deals which still leave them making large profits.
Greedy private lenders – including those meeting at Davos this week – are at the centre of the debt crisis, trapping countries in debt, with some threatening to sue some of the poorest countries in the world for repayment. The wealthy individuals who run the banks, hedge funds and oil trading firms aren’t earning this money – they’re taking it. Schools, hospitals and public services around the world are being hollowed out to pay unjust loans to these financial giants and deliver big profits to their bosses and clients.
This year, billionaire wealth rose three times faster than in the previous five years. The world’s 12 richest billionaires now hold more wealth than the poorest half of humanity. The rich are getting richer – and they’re using their economic wealth to buy political influence while those in poverty are seeing their democratic rights and freedoms undermined. The annual meeting of billionaires in Davos is a stark reminder of how the uber-rich use the power that comes with extreme wealth to ensure the global economy is geared toward their interests – and away from the interests of people in lower-income countries.
While the super-rich can afford to buy political influence, people in poverty face significant barriers to political participation and are increasingly politically poor. Billionaires are 4,000 times more likely to hold political office than ordinary people and the gulf between rich and poor is getting bigger. Debt plays a pivotal role in cementing these inequalities; it’s one of the biggest drivers of inequality in lower-income countries.
The billionaires at Davos have got one thing right – we need bold, collective action. Because this is the worst debt crisis in thirty years and millions of people are being denied justice. It’s time for bold action on the debt crisis, including debt cancellation for countries in crisis and a new debt justice law in the UK that would stop greedy private lenders dragging their feet in negotiations and suing countries in crisis.
Around the world people are resisting inequality, injustice and the debt crisis. Last year saw the biggest mobilisations in a generation demand urgent action on the debt crisis. As the world’s wealthy meet in Davos this week, let’s call out the private lenders making billions from the debt crisis. Shame on the Davos super-rich – it’s time to cancel the debt.
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