Our world is one where countries shouldn’t have to choose between funding essential public services or paying off unjust debts.
We’re facing the worst global debt crisis in 30 years. People in countries like Ghana and Sri Lanka are being robbed of an education and healthcare, their governments unable to deal with the climate emergency because their countries are trapped in unjust debt.
In recent years the pandemic, spiralling interest rates and soaring energy prices have pushed fifty-four countries to crisis point. Now, debt repayments are at their highest levels in thirty years; in Africa, 34 countries are spending more on debt than health or education.
It’s a crisis on a scale we’ve not seen since the early 2000s. Back then, campaigners mounted an incredible campaign that won $130 billion in debt cancellation. Now, we need to continue to fight to win changes to the debt system itself – because wealthy countries and financial giants continue to use debt to drain resources out of lower-income countries.
Instead of agreeing to debt cancellation, private lenders are using the threat of legal action to extract big profits – and in some cases taking countries to court right here in the UK. Right now, South Sudan, one of the poorest countries in the world, is being sued by a UK-based oil trader in the High Court in London.
The debt crisis is destroying lives. In Ghana, the government has paid over $7 billion in interest alone on debts to western lenders since 2010. In the words of Ghanaian debt campaigner Bernard Anaba:
“The debt crisis has led to a higher cost of living, escalating food prices, high cost of transportation, high cost of water and electricity, and making life very difficult for people. People barely get two meals a day… lives are being destroyed because of the debt crisis.”
Almost half of lower-income countries’ debt payments are to private lenders, and nine in ten of those debts are overseen by UK law. A new debt justice law here could help get debt cancelled for countries in crisis.
In 2027, the UK will host the presidency of the G20, a self-selected group of nations dominated by rich countries. The UK G20 presidency will be a big opportunity for action on the debt crisis. A new debt justice law here would show that the government is serious about tackling the debt crisis – and could help convince other countries to take action too.
In the words of Melani Gunathilaka, a debt activist in Sri Lanka:
“For countries like Sri Lanka, winning debt justice would mean that people will, at the very least, have their basic needs met. It would let us make decisions for our country ourselves without being at the mercy of lenders and investors and live our lives with dignity.”
Across countries in debt crisis, people are resisting – taking to the streets, organising strikes and demanding an end to the unjust debt. It’s time for world leaders to commit to genuine change that will deliver justice for lower-income countries trapped in debt. Together we can win justice for millions of people living in countries in debt crisis.
Countries in crisis have struggled to get debt cancelled because private lenders have been refusing to agree to the same terms as other lenders. Instead, these financial giants have been dragging out negotiations as they hold out for big profits – at the expense of millions of people living in countries in debt crisis.
90% of the debts owed to financial giants by lower-income countries are overseen by UK law, this means parliament could pass a debt justice law that would force private lenders to take part in debt cancellation.
This law could:
- Make sure that no private lender could sue a country for more than they would have got if they had taken part in debt restructuring through existing agreements
- Allow the courts to force private lenders to take part in debt cancellation if other lenders, like governments, have agreed to it.
The other place which governs debt contracts is New York. The New York Assembly is already considering bills that aim to achieve the same outcomes as a debt justice law in the UK. We are working closely with campaigners in New York to push for reforms that would win justice for all countries in debt crisis.
Governments can borrow from various types of lenders – private lenders like hedge funds, asset managers, banks and oil traders; multilateral creditors like the International Monetary Fund and the World Bank; and other governments.
Private lenders make up by far the biggest portion (46%) of projected debt repayments between now and 2029. These financial giants – like BlackRock, HSBC, JP Morgan, and UBS – continue to demand debt repayments from lower-income countries in debt crisis.
The Jubilee 2000 campaign saw an unprecedented number of people all around the world join together to demand debt justice. Campaigners and activists won a record $130 billion in debt cancellation by multilateral and government lenders for 37 countries. This allowed money to instead be spent on vital public services like education and healthcare.
However, private companies were excluded, so in 2010 Debt Justice won a law which made private lenders with debts governed by UK law take part in the debt cancellation scheme won by the Jubilee 2000 campaign. While a record amount of unjust debt was written off, the underlying causes of the crisis were never addressed – and the debt cancellation scheme has now come to an end.
Many countries are now back in crisis. This time we need long-lasting change – that means new laws in the UK and elsewhere to make private lenders take part in all internationally agreed debt relief, debt cancellation for countries in crisis, and a new debt framework at the United Nations.