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

Over 200 networks and organisations have signed a statement calling for 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

البيان متوفر هنا باللغة العربية

And here is the full text and signatories in English:

A debt jubilee to tackle the Covid-19 health 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]
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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. Stakeholder Group of Persons with Disabilities
  11. Disabled People’s International
  12. CADTM international
  13. Oxfam
  14. ActionAid International
  15. CCFD-Terre Solidaire
  16. CIDSE
  17. Christian Aid
  18. Brot für die Welt
  19. The ONE Campaign
  20. Save the Children
  21. Avaaz
  22. Fundación Educación y Cooperación – EDUCO
  23. Society for International Development
  24. Centre for Economic and Social Rights
  25. 350.org
  26. Medical Mission Sisters
  27. Africa Development Interchange Network
  28. Global Policy Forum
  29. Debt Relief International
  30. Youth for Tax Justice Network (YTJN)
  31. Fair Finance International
  32. Oil Change International
  33. Missionary Oblates of Mary Immaculate
  34. Sisters of Charity of Nazareth Congregational Leadership
  35. Federación Internacional Fe y Alegría
  36. Platform to Protect Whistleblowers in Africa (PPLAAF)
  37. International Budget Partnership
  38. Y Care International
  39. Corporate Europe Observatory
  40. Congregation of Our Lady of Charity of the Good Shepherd (Global)
  41. Migrant Forum in Asia
  42. Aksi! for gender, social and ecological justice
  43. Africa Europe Faith & Justice Network (Europe)
  44. GCAP – Global Call for Action against Poverty
  45. Education International
  46. North African Food Sovereignty Network (NAFSN)
  47. Tax and Fiscal Justice Asia
  48. Validity Foundation – Mental Disability Advocacy Centre
  49. VIVAT International
  50. RIPESS – Intercontinental network for the promotion of Social Solidarity Economy
  51. Tax Justice Network
  52. Economistas sin Fronteras
  53. Feminist Task Force
  54. Third World Network Africa
  55. Religious of the Sacred Heart of Mary NGO
  56. IBON International
  57. Arab Forum for the Rights of Persons with Disabilities
  58. Plataforma Mercosur Social y Solidario
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National organisations

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