Earlier this month, as protesters again took to the streets in Kenya, President Ruto told police that they should “shoot their legs so they break”. His hardening rhetoric in response to the protests that have rocked Kenya for over a year is the latest example of how debt-fuelled economic instability is giving rise to authoritarianism in countries in crisis.
Our latest report reveals how the worst debt crisis in thirty years, combined with decades of severe austerity measures, has created fertile ground for repression and authoritarianism.
Origins
In recent years, the impact of the pandemic, rising energy costs, the climate crisis and volatile commodity prices have pushed to crisis point many countries that were already struggling. The international processes that are meant to support countries in debt crisis are failing spectacularly, leaving governments with little choice but to cut spending on meeting basic needs.
For decades, western dominated multilateral development banks such as the International Monetary Fund (IMF) and World Bank have made loans to countries in crisis to prevent them going into default. As a condition, recipient governments are expected to introduce strict austerity* measures that strip public services.
A further upshot of this arrangement is that the IMF and World Bank are effectively bailing out irresponsible private lenders, who continue to be paid off the back of these new loans.
The economic crisis in Kenya is the result of a long history of debt dependence and IMF-imposed austerity that has drained public resources. In June 2024, thousands of people took to the streets to protest a controversial Finance Bill, proposed by the government under pressure from the IMF as a condition of a new loan. The bill would have introduced new taxes on people who are already dealing with the devastating consequences of previous rounds of IMF austerity that has led to a fall in public spending of 17% over the last decade.
“We’ve had abductions, we’ve had killings, we’ve had arrests, we’ve had prosecutions in court. Those are some of the measures that the government is using to suppress the civic space in Kenya.”
Justine Kapanga, Kenyan climate and Debt activist.
Time and again, we see the interests of western-dominated institutions like the IMF and World Bank undermining democratically elected governments – using their economic power to dictate legislation. When people protest in response, they experience increasingly authoritarian responses.
Debt and Political instability in Pakistan
In Pakistan, which has been heavily indebted since the 1970s when the government was forced to borrow to cope with the impact of high oil prices, economic crisis is adding fuel to political instability. The country is struggling under the weight of debt and austerity with devastating consequences for many people.
Having failed to qualify for debt relief in the early 2000s, Pakistan borrowed from the IMF and is currently under its 27th IMF programme. Decades of IMF-imposed austerity have been devastating for communities across the country, with escalating costs of electricity, gas, oil and food.
Unable to address the economic crisis due to IMF conditions, the government is not meeting the demands of people but instead is implementing ever more authoritarian measures, meeting protestors and opponents with swift and often violent crackdowns.
“The government cannot control the price hike – they have to take loans from the IMF and fulfil their conditions. So to stop people’s anger, they are bringing new laws.”
Farooq Tariq, Kissan Rabita Committee.
The government is introducing anti-terrorism laws to target activists and peaceful protesters, and there has been an increase in enforced disappearances, torture and extra-judicial killings. The convergence of economic crisis and political repression is pushing this nuclear-armed country toward authoritarianism and democratic breakdown.
Debt and authoritarian regimes
In countries like Tunisia, Argentina and Egypt, the economic crisis created by the debt-austerity trap has been used by authoritarian leaders to justify their rule, presenting themselves as the only solution while perpetuating the very cycles of instability they claim to resolve.
In Tunisia, decades of debt and IMF-imposed austerity paved the way for Kais Saied’s 2021 power grab, following which hard-won democratic institutions have been dismantled, economic and social crises have deepened, and repression has intensified.
“We can see the deterioration of infrastructure again and again. If you go to a school or hospital, you can see that there is no money being spent there. I prefer to stay home sick than go to a public health care facility.”
Imene Cherif, MENA Fem.
Debt undermines progressive governments
Even in countries where debt-fuelled economic crisis has not paved the way for authoritarian leaders to be elected, the conditions imposed by foreign powers are still undermining the government’s ability to respond to the demands of the people.
Despite campaigning on a promise to break free from debt and austerity and meet the needs of the people, Sri Lanka’s newly elected left-wing government has found itself with no real choice but to accept IMF conditions and a harmful bondholder deal that does little to reduce the country’s debt.
“If a majority government has to say that they have no choice, this reflects a massive problem. To me it feels like a knee to your neck.”
Melani Gunathilaka, Debt for Climate Sri Lanka.
It’s time to Cancel the Debt
This rise of authoritarianism is not unique to lower-income countries. Debt-driven authoritarianism is part of the wider rise of authoritarianism across the world, including in the West, as democratic governments fail to meet people’s needs and demands.
It’s time to bring an end to the debt crisis. Around the world people are resisting – often in the face of increasingly hostile regimes. This year, thousands of activists and campaigners from around the world have come together to demand new international processes that would ensure countries in crisis can get debt cancelled. In the UK, a bill is being heard in parliament that would stop private lenders from dragging their feet in negotiations – and suing countries in crisis.
The activists and campaigners protesting against economic austerity and unjust debt remain defiant, outlining their demands for justice, dignity and self-determination. We can stand in solidarity with them, by demanding action on debt globally and in the UK. Together, we can stand up against unjust debt and help win justice.
*Austerity refers to government policies aimed at reducing its budget deficit and stabilising its debt levels, typically by cutting public spending or increasing taxes. In this paper, we are referring to the austerity-based policies that Global South governments have been forced to implement to address unsustainable external debt levels, largely via conditions attached to loans from the International Monetary Fund (IMF) and World Bank.
