- UK Prime Minister calls for implementation of 2017 guidelines
- But UK government itself has been unwilling to implement these limited guidelines for loans from UK-based banks and companies
G20 governments have stopped short of taking decisive action to improve transparency of loans to governments. In their meeting in Argentina at the start of December, they called on the IMF and World Bank “to work with borrowers and creditors to improve the recording, monitoring and transparent reporting of public and private debt obligations”.
It is welcome that debt transparency is now regularly on the agenda of the G20. However, the key way for creditors to improve the recording, monitoring and reporting of debt obligations is for lenders to disclose loans, when they are given.
The G20 governments between them represent most of the loans given by governments, and they control the multilateral institutions, such as the World Bank, which give loans. They also, particularly the US and UK, regulate the private banks and other companies which lend to governments.
Following the G20 summit, UK Prime Minister Theresa May reported to the House of Commons that she called on other governments to implement the guidelines on sustainable finance the G20 agreed last year.
The 2017 Guidelines are a very limited commitment, which says that the G20 governments will notify the IMF if any of the loans G20 governments have given do not appear in a Debt Sustainability Analysis conducted by the IMF for the country concerned.
This is limited because it only commits to sharing information on loans with staff of the IMF. This means civil society, media and national parliaments can be left in the dark. Even if the information is in some way subsequently included in an IMF Debt Sustainability Assessment, given how long a gap there is between such analyses happening, this could take two to eight years between a loan being given to the public knowing about it.
Furthermore, as alluded to in the UK Prime Minister’s statement, there is evidence that the commitment is not being implemented. This includes loans from governments not being reported to the IMF. But in addition, the UK government have told Jubilee Debt Campaign they do not regard the G20 commitment as creating any requirement for UK regulators to inform the IMF about loans from UK banks and companies.
Transparency of loans from private companies is vital. Loans from the private sector account for 60% of external debt of governments in the global South. Where secret loans from private companies have come to light, such as in Republic Congo and Mozambique, it is UK based companies, giving loans under UK law, which have been responsible.
In Japan in 2019, the G20 need to go beyond general statements of concern, to concrete actions that will mean loans to governments will be publicly disclosed, in one place, so that parliaments, media and civil society can hold borrowers and lenders to account.