Over 200 networks & organizations call for the cancellation of debt payments in 2020

The statement is available here in English
La déclaration est disponible ici en français
La declaración está disponible aquí en español
A declaração está disponível aqui em português

Should your organization wish to add its endorsement, please click here. Here is the full text and signatories in English:

A debt jubilee to tackle the Covid-19 health, social and economic crisis

1. What we are calling for

We, the under-signed organizations, aware of the severe impacts on hundreds of millions of people from the health, social and economic crises faced by countries in the global South as a result of Covid-19, urgently call for:

  • Cancellation of all external debt payments due to be made in 2020.
  • Provision of emergency additional finance which does not create debt.

All principal, interest and charges on sovereign external debt due in 2020 should be cancelled permanently, they should not accrue into the future. Cancelling debt payments is the fastest way to keep money in countries and free up resources to tackle the urgent health, social and economic crises resulting from the Covid-19 global pandemic.

2. Implementing cancellation of debt payments

Borrower governments have it within their power to stop making debt payments but they should not suffer any penalties for doing so. All lenders should therefore agree to the immediate cancellation of debt payments falling due in 2020, with no accrual of interest and charges and no penalties.

In the absence of a wider, multilaterally agreed debt cancellation, lenders should take the following steps:

  • Multilateral institutions, including the IMF and World Bank, should offer an immediate cancellation of all principal, interest and charges for the remainder of 2020 for all countries in need, and most urgently for all PRGT and IDA countries.
  • The IMF and World Bank should urge any country ceasing multilateral and/or bilateral debt payments to also cancel payments to private external lenders. Any new IMF and World Bank finance should be in the form of grants not loans, and require other lenders to reprofile the debt where sustainability is uncertain, or restructure their debt where it is unsustainable,[1] to help ensure money is used to support public policy priorities in response to the COVID-19 crisis, rather than to repay other lenders.
  • Lender governments, both Paris Club members and others such as China, Saudi Arabia and Kuwait, should cancel all principal, interest and charges for the remainder of 2020 for all countries in need, and most urgently for all PRGT and IDA countries. Ideally a debt cancellation should be coordinated between lenders but should not wait for them all to agree.
  • The G20 should support moves by any country to stop making payments on debt to private external lenders.
  • Key jurisdictions, especially the UK and New York, should pass legislation to prevent any lender suing a government for stopping debt payments in 2020.
  • Debt payment cancellations and additional finance should be free of economic policy conditionality promoting privatisation, deregulation and trade liberalisation. The crisis has been caused by exogenous shocks: developments over which countries in the global south had no control.
  • Debt payment cancellation and additional finance should be designed specifically to bolster public expenditure targeted at protecting the rights and needs of populations, especially to maintain and increase social protection and health spending in response to COVID-19 and ensure relief goes directly to benefit those in need.

3. Resolving the debt crisis

Many countries were in debt crisis before the Covid-19 crisis began. Many more will emerge from this crisis with even higher unsustainable debts. Immediate cancellation of debt payments should therefore be linked to a more comprehensive and long-term approach to debt crisis resolution. As such, to make debt restructuring more efficient, equitable and successful we call for:

  • The creation through the United Nations of a systematic, comprehensive and enforceable process for sovereign debt restructurings.[2]
  • The IMF to introduce clear guidelines on when a debt is unsustainable, and follow its policy only to lend to countries with unsustainable debts if there is a default or debt restructuring.[3]

A process to make these changes must begin before the end of 2020.

4. The impacts of Covid-19

The global Covid-19 crisis has led to falls in commodity prices, an increase in future borrowing costs for global South governments[4], and contributed to the largest ever capital outflow from developing countries.[5] Government revenues will fall as a result, and debt payments will increase at the same time that countries need to expand healthcare and social protection in response to the crisis. Developing countries had already been facing heightened debt vulnerabilities and rising debt costs before the Covid-19 outbreak.[6] The scale of the public health crisis and need for rapid policy responses means vital government resources must be urgently directed towards the needs of populations and not diverted to lenders. The outbreaks of Covid-19 so far show that time is essential. Governments need to have resources for decisive action today. Any delay will make the pandemic more difficult to control and a later repair of economic damage more costly, especially for borrower countries.

We estimate cancellation of external debt payments in 2020 for 69 countries[7] classified by the IMF as Lower Income Economies and for which data is available, would save $19.5 billion in external debt payments to bilateral and multilateral lenders in 2020, and $6 billion in external debt payments to private lenders. If it was extended to 2021 it would save a further $18.7 billion in multilateral and bilateral payments and $6.2 billion in external payments to private lenders.[8]

5. Support for action on debt cancellation

African Finance Ministers have called for a suspension of all interest payments in 2020, and all principal and interest payments by fragile states.[9] The IMF and World Bank have called for a suspension of all debt payments by the poorest countries to other governments.[10] The United Nations Secretary General has called for debt restructuring, including waivers on interest payments in 2020.[11] Prime Minister of Pakistan Imran Khan has called for a debt write-off for his and other vulnerable countries.[12] Ecuador’s Congress has also called on the government to suspend debt payments.[13] In early March Lebanon defaulted on private external debt payments and has announced it will stop paying all foreign currency bonds.[14] Ethiopian Prime Minister Abiy Ahmed Ali has called for a widespread debt write-off, with any remaining debt not payable for ten years and limiting debt payments to 10% of exports.[15]

Signatories (205 networks and organisations in total)

International organisations and regional networks

  1. African Forum and Network on Debt and Development (Afrodad)
  2. Asian Peoples’ Movement on Debt and Development (APMDD)
  3. Latin American Network for Economic and Social Justice (Latindadd)
  4. European Network on Debt and Development (Eurodad)
  5. Arab NGO Network For Development (ANND)
  6. Red Jubileo Sur/Américas
  7. Third World Network (TWN)
  8. Focus on the Global South
  9. Womankind Worldwide
  10. CADTM international
  11. Oxfam
  12. ActionAid International
  13. CCFD-Terre Solidaire
  14. CIDSE
  15. Christian Aid
  16. Brot für die Welt
  17. The ONE Campaign
  18. Save the Children
  19. Avaaz
  20. Fundación Educación y Cooperación – EDUCO
  21. Society for International Development
  22. Centre for Economic and Social Rights
  23. org
  24. Medical Mission Sisters
  25. Africa Development Interchange Network
  26. Global Policy Forum
  27. Debt Relief International
  28. Youth for Tax Justice Network (YTJN)
  29. Fair Finance International
  30. Oil Change International
  31. Missionary Oblates of Mary Immaculate
  32. Sisters of Charity of Nazareth Congregational Leadership
  33. Federación Internacional Fe y Alegría
  34. Platform to Protect Whistleblowers in Africa (PPLAAF)
  35. International Budget Partnership
  36. Y Care International
  37. Corporate Europe Observatory
  38. Congregation of Our Lady of Charity of the Good Shepherd (Global)
  39. Migrant Forum in Asia
  40. Aksi! for gender, social and ecological justice
  41. Africa Europe Faith & Justice Network (Europe)
  42. Instituto Marquês de Valle Flôr (IMVF)
  43. GCAP – Global Call for Action against Poverty
  44. Education International
  45. North African Food Sovereignty Network (NAFSN)
  46. Tax and Fiscal Justice Asia
  47. Validity Foundation – Mental Disability Advocacy Centre
  48. VIVAT International
  49. RIPESS – Intercontinental network for the promotion of Social Solidarity Economy
  50. Tax Justice Network

National organisations

  1. Aid/Watch, Australia
  2. Jubilee Australia
  3. Bangladesh Krishok Federation
  4. NRDS, Bangladesh
  5. 11.11, Belgium
  6. Broederlijk Delen, Belgium
  7. CNCD-11.11.11, Belgium
  8. Entraide et fraternité, Belgium
  9. Federação Nacional do Fisco Estadual e Distrital (FENAFISCO), Brazil
  10. FOAESP – Fórum das Ong Aids do estado de São Paulo
  11. Gestos (HIV and AIDS, communication, gender), Brazil
  12. Grupo de Resistência Asa Branca (GRAB), Brazil
  13. Instituto de Justiça Fiscal (IJF), Brazil
  14. Outras Palavras Comunicação Compartilhada, Brazil
  15. Plate Forme d’Information et d’Action sur la Dette (PFIAD), Cameroon
  16. AidWatch Canada
  17. Canadian Council for International Co-operation
  18. Forum des Organsations Nationales Humanitaires et de Développement en RD Congo
  19. PC2D (RD.Congo) et Caritas Congo ASBL
  20. Commission Justice et Paix de Pointe Noire, Republic of Congo
  21. Convention de la Societe Civile Ivoirienne (CSCI)
  22. Plate forme d’autonomisation des organisations de jeunesse de Côté d’Ivoire(PAOJCI)
  23. Ecumenical Academy, Czech Republic
  24. ActionAid Denmark
  25. Jubileo 2000 Red Ecuador
  26. Finn Church Aid, Finland
  27. Action contre la Faim, France
  28. Amis de la Terre France
  29. Attac France
  30. CADTM France
  31. Centre de Recherche et d’Information pour le Développement (CRID), France
  32. Comité français pour la Solidarité Internationationale (CFSI)
  33. Confédération Générale du Travail (CGT), France
  34. Coordination SUD, France
  35. Equipop, France
  36. Global Health Advocates France
  37. Plateforme Française Dette & Développement (PFDD), France
  38. Réseau Foi & Justice Afrique Europe antennne France
  39. Solidaires Finances Publiques, France
  40. Bischöfliches Hilfswerk MISEREOR, Germany
  41. Bündnis Eine Welt Schleswig-Holstein e.V.
  42. de – Entwicklung braucht Entschuldung (Jubilee Germany)
  43. hl redaction, Germany
  44. Transform! Europe, EU
  45. Debtfree, Greece
  46. Plateforme d’Information et d’Action sur la Dette et le Développement- Guinée (PIADD)
  47. Plateforme nationale des Citoyens Unis pour le Développement (PCUD)
  48. Fe Y Alegria Honduras
  49. DemNet Hungary
  50. Friends of the Earth Hungary
  51. Environics Trust, India
  52. Indian Social Action Forum
  53. Madhyam, India
  54. Mines, Minerals & PEOPLE, India
  55. Indonesia Water Community of Practice
  56. Solidaritas Perempuan (Women’ Solidarity for Human Rights), Indonesia
  57. Wahana Lingkungan Hidup Indonesia (WALHI)
  58. 80:20 Educating and Acting for a Better World, Ireland
  59. ActionAid Ireland
  60. Centre for Global Education, Ireland
  61. Christian Aid Ireland
  62. Comhlámh (Ireland)
  63. Financial Justice Ireland
  64. Friends of the Earth Ireland
  65. SMA Justice Office, Society of African Missions, Ireland
  66. Association of Italian NGOs
  67. CIPSI, Italy
  68. Emergenza Sorrisi, Italy
  69. FOCSIV Italian Federation Christian Volunteering Service
  70. Institute of Public Finance Kenya
  71. Sustainable Development Institute, Liberia
  72. Catholic Commission for Justice and Peace of the Archdiocese of Lilongwe (CCJP Lilongwe- Malawi)
  73. Centre for Social Concern, Malawi
  74. Centre for Social Accountability & Transparency, Malawi
  75. Economics Association of Malawi
  76. Development Communications Trust, Malawi
  77. Integrity Platform, Malawi
  78. Malawi Economic Justice Network
  79. Youth and Society, Malawi
  80. Equidad de Género: Ciudadanía, Trabajo y Familia, Mexico
  81. Observatorio Mexicano de la Crisis
  82. associacao Luarte – arte, cidadania e transformacao, Mozambique
  83. Mozambique Budget Monitoring Forum
  84. Mozambican Debt Group
  85. ALTSEAN-Burma, Myanmar
  86. Both ENDS, Netherlands
  87. Cordaid, Netherlands
  88. BudgIT Foundation, Nigeria
  89. Debt Justice Norway
  90. Norwegian Church Aid (NCA)
  91. AwazCDS-Pakistan
  92. Freedom from Debt Campaign of Pakistan
  93. Institute for Social & Economic Justice, Pakistan
  94. Pakistan Development Alliance
  95. Pakistan Fisher Folk Forum
  96. Pakistan Kissan Rabita Committee
  97. Freedom from Debt Coalition, Philippines
  98. Sanlakas Philippines
  99. ACEP – Associação para a Cooperação Entre os Povos, Portugal
  100. CIDAC – Centro de Intervenção para o Desenvolvimento Amílcar Cabral, Portugal
  101. Fundação Gonçalo da Silveira, Portugal
  102. MONTE, Portugal
  103. Oikos – Cooperação e Desenvolvimento, Portugal
  104. Plataforma Portuguesa das ONGD, Portugal
  105. Veterinarios sem Fronteiras Portugal
  106. ZERO – Association for the Sustainability of the Earth System, Portugal
  107. Budget Advocacy Network, Sierra Leone
  108. Enabanda, Slovenia
  109. Alianza por la Solidaridad-Action Aid España
  110. org, Spain
  111. Ecologistas en Acción, Spain
  112. Fundación Entreculturas, Spain
  113. Greenpeace Spain
  114. Ingeniería sin Fronteras, Spain
  115. cat – Organitzacions per a la Justícia Global – Catalunya
  116. Observatorio de la Deuda en la Globalización, Spain
  117. Observatorio de Multinacionales en América Latina (OMAL)-Paz con Dignidad, Spain
  118. Plataforma Auditoría Ciudadana de la Deuda, Spain
  119. Centre for Environmental Justice, Sri Lanka
  120. Act Church of Sweden
  121. Diakonia, Sweden
  122. Alliance Sud, Switzerland
  123. Fastenopfer, Switzerland
  124. Climate Watch Thailand
  125. Observatoire Tunisien de l’Economie, Tunisia
  126. SEATINI, Uganda
  127. Action for Argentina, UK
  128. Action for Southern Africa, UK
  129. Bond, UK
  130. Bretton Woods Project, UK
  131. Cafod (Catholic Agency for Overseas Development), UK
  132. Christians on the Left, UK
  133. Gender and Development Network, UK
  134. Global Justice Now, UK
  135. Health Poverty Action, UK
  136. Jubilee Debt Campaign, UK
  137. Jubilee Scotland
  138. Stamp Out Poverty, UK
  139. STOPAIDS, UK
  140. Tearfund, UK
  141. The Equality Trust, UK
  142. War on Want, UK
  143. Trademark Belfast
  144. Jubilee USA Network
  145. Maryknoll Office for Global Concerns, US
  146. Sisters of Charity Federation, US/Canada
  147. ActionAid Zambia
  148. Campaign for Active Voter Engagement in Zambia
  149. Caritas Zambia
  150. Centre for Trade Policy and Development, Zambia
  151. CUTS International, Zambia
  152. Jesuit Centre for Theological Reflection (JCTR), Zambia
  153. Transparency International Zambia
  154. Zambia Civic Education Association
  155. Zimbabwe Coalition on Debt and Development

References

[1] Under IMF policy if a government’s debt is unsustainable a full restructuring or default on the debt is meant to take place during a loan programme. A restructuring is a change in the terms of the debt which lowers the amount a lender will receive back. If sustainability of the debt is uncertain, a reprofiling is meant to take place. This moves the date of debt payments into the future so that lenders are not effectively paid off by IMF loans.

[2] See ‘We can work it out: 10 civil society principles for sovereign debt resolution’ https://eurodad.org/Entries/view/1547087/2019/09/17/We-can-work-it-out-10-civil-society-principles-for-sovereign-debt-resolution

[3] See more on this policy at https://jubileedebt.org.uk/wp-content/uploads/2019/10/IMF-policy-on-debt-restructurings_English_10.19-1.pdf

[4] https://jubileedebt.org.uk/uncategorized/coronavirus-worsens-debt-crisis-in-poor-countries

[5] https://www.theguardian.com/world/2020/mar/23/g20-finance-ministers-talks-hampered-by-us-china-posturing-coronavirus

[6] https://www.worldbank.org/en/news/press-release/2019/12/19/debt-surge-in-emerging-and-developing-economies-is-largest-fastest-in-50-years

[7] These are not all the countries which need debt suspension. As defined by the IMF, LIEs include 59 countries eligible for IFI concessional financing, 13 middle-income small states and four countries that have graduated from concessionality eligibility since 2010.

[8] Research by Eurodad https://eurodad.org/debt_moratorium 

[9] https://www.uneca.org/stories/african-finance-ministers-call-coordinated-covid-19-response-mitigate-adverse-impact

[10] https://www.ft.com/content/6eca167c-6ec0-11ea-9bca-bf503995cd6f

[11] https://www.un.org/sg/en/content/sg/note-correspondents/2020-03-24/note-correspondents-letter-the-secretary-general-g-20-members

[12] https://www.brecorder.com/2020/03/17/580790/pm-wants-world-to-consider-writing-off-pakistans-debt-to-help-cope-with-coronavirus/

[13] https://www.bloomberg.com/news/articles/2020-03-23/ecuador-bonds-sink-as-congress-suggests-suspending-debt-payments

[14] https://www.nytimes.com/aponline/2020/03/23/world/middleeast/ap-ml-lebanon.html

[15] https://twitter.com/AbiyAhmedAli/status/1242378606543855616/photo/2

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