A COALITION of 20 charities is lobbying the Government to introduce a debt-cancellation scheme for lower-income countries within the Roman Catholic Church’s Jubilee Year.
In a letter published this week, Christian Aid, Debt Justice (formerly Jubilee Debt Campaign), and other charities argue that prime debt-servicing costs are stopping global-South governments from investing in “vital public services” akin to education and health, and efforts to limit climate change.
The letter reports that 32 African countries spend more on paying external debts than they do on health care. It also reports that debt payments for lower-income countries are at their highest for 30 years. Private lenders akin to banks, hedge funds, and oil traders are the biggest group of creditors, it says; many are based within the UK, and 90 per cent of their contracts are governed by English law.
“The UK can only lead on international debt if it ensures Western private lenders participate in debt relief,” their letter says. “If effective debt cancellation is just not delivered, recent multilateral loans will just bail out private lenders, relatively than being invested in meeting countries’ needs.
“As within the Eighties and Nineteen Nineties, countries will remain trapped in debt crisis for a long time. When large-scale debt cancellation becomes unavoidable, it would be the general public sector which bears the price, relatively than the unique lenders.”
While the charities welcome the Government’s prioritisation of “tackling unsustainable debt”, they write that “it will not occur through business as usual but requires an entire change within the UK approach.”
It recommends “a debt cancellation scheme that brings debt payments right down to a genuinely sustainable level”, and that the Government “Pass laws to make sure all private lenders take part in debt cancellation and suspend repayments to non-public lenders during debt cancellation negotiations.”
To launch the campaign Cancel Debt, Choose Hope, representatives of the charities, including CAFOD, Oxfam, and Save the Children, met outside the Treasury on Monday.
