FfD Forum 2019
Statement to “Special High-level Meeting with the Bretton Woods institutions, the World Trade Organization and the United Nations Conference on Trade and Development” on behalf of Civil Society FfD Group (including the Women’s Working Group on FfD)
Delivered by Bodo Ellmers, EURODAD
16 April 2019
(Ir)responsible lending and the new wave of debt crises.
Preventing debt crises: Towards responsible lending.
This is Bodo Ellmers from Eurodad: Eurodad is the European umbrella of the Jubilee debt relief campaigns and part of global coalition of CSOs that tries to ensure that debt does not stand in the way of development.
We share the concerns about rapidly rising debt levels that many speakers have raised. Actually, we are even a bit angry: Many of us took to the streets 20 years ago to campaign for debt relief for the poorest countries. Now we have to realize that we are back to square one: We have massive debt problems, and no effective institutions to deal with them.
We do not share the point made that wrong policies by LIDC have been the problem. According to our analysis, a lending boom triggered by the monetary policies of central banks in the USA, Europe and Japan was the problem. It was irresponsible lending.
The World Bank has been a part of the problem here and its billions to trillions agenda has been a art of the problem here. When you use billions in grants to mobilize trillions in private loans, you should not be surprised that you get debt problems on the receiving side.
We appreciate to see in the outcome document of this FfD forum a commitment to work on a global consensus on responsible lending and borrowing. We would like to know how the work leading to this consensus will look like. And, once we have the consensus, how to ensure compliance?
We also appreciated the commitment to improve creditor coordination. According to our analysis, cooperation between public and private lenders is the problem, not cooperation within the group of public lenders. Private creditors are not voluntarily participating in debt restructurings, an expansion of the Paris Club won’t fix this. How would you fix this? How would you make a comprehensive debt workout encompassing all categories of debt possible?