All principal, interest and charges on sovereign external debt due in 2020 should be cancelled permanently, they should not accrue into the future.

Coronavirus: #CancelTheDebt

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
  1. Global Policy Forum
  2. Debt Relief International
  3. Youth for Tax Justice Network (YTJN)
  4. Fair Finance International
  5. Oil Change International
  6. Missionary Oblates of Mary Immaculate
  7. Sisters of Charity of Nazareth Congregational Leadership
  8. Federación Internacional Fe y Alegría
  9. Platform to Protect Whistleblowers in Africa (PPLAAF)
  10. International Budget Partnership
  11. Y Care International
  12. Corporate Europe Observatory
  13. Congregation of Our Lady of Charity of the Good Shepherd (Global)
  14. Migrant Forum in Asia
  15. Aksi! for gender, social and ecological justice
  16. Africa Europe Faith & Justice Network (Europe)
  17. Instituto Marquês de Valle Flôr (IMVF)
  18. GCAP – Global Call for Action against Poverty
  19. Education International
  20. North African Food Sovereignty Network (NAFSN)
  21. Tax and Fiscal Justice Asia
  22. Validity Foundation – Mental Disability Advocacy Centre
  23. VIVAT International
  24. RIPESS – Intercontinental network for the promotion of Social Solidarity Economy
  25. 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
  1. Development Communications Trust, Malawi
  2. Integrity Platform, Malawi
  3. Malawi Economic Justice Network
  4. Youth and Society, Malawi
  5. Equidad de Género: Ciudadanía, Trabajo y Familia, Mexico
  6. Observatorio Mexicano de la Crisis
  7. associacao Luarte – arte, cidadania e transformacao, Mozambique
  8. Mozambique Budget Monitoring Forum
  9. Mozambican Debt Group
  10. ALTSEAN-Burma, Myanmar
  11. Both ENDS, Netherlands
  12. Cordaid, Netherlands
  13. BudgIT Foundation, Nigeria
  14. Debt Justice Norway
  15. Norwegian Church Aid (NCA)
  16. AwazCDS-Pakistan
  17. Freedom from Debt Campaign of Pakistan
  18. Institute for Social & Economic Justice, Pakistan
  19. Pakistan Development Alliance
  20. Pakistan Fisher Folk Forum
  21. Pakistan Kissan Rabita Committee
  22. Freedom from Debt Coalition, Philippines
  23. Sanlakas Philippines
  24. ACEP – Associação para a Cooperação Entre os Povos, Portugal
  25. CIDAC – Centro de Intervenção para o Desenvolvimento Amílcar Cabral, Portugal
  26. Fundação Gonçalo da Silveira, Portugal
  27. MONTE, Portugal
  28. Oikos – Cooperação e Desenvolvimento, Portugal
  29. Plataforma Portuguesa das ONGD, Portugal
  30. Veterinarios sem Fronteiras Portugal
  31. ZERO – Association for the Sustainability of the Earth System, Portugal
  32. Budget Advocacy Network, Sierra Leone
  33. Enabanda, Slovenia
  34. Alianza por la Solidaridad-Action Aid España
  35. org, Spain
  36. Ecologistas en Acción, Spain
  37. Fundación Entreculturas, Spain
  38. Greenpeace Spain
  39. Ingeniería sin Fronteras, Spain
  40. cat – Organitzacions per a la Justícia Global – Catalunya
  41. Observatorio de la Deuda en la Globalización, Spain
  42. Observatorio de Multinacionales en América Latina (OMAL)-Paz con Dignidad, Spain
  43. Plataforma Auditoría Ciudadana de la Deuda, Spain
  44. Centre for Environmental Justice, Sri Lanka
  45. Act Church of Sweden
  46. Diakonia, Sweden
  47. Alliance Sud, Switzerland
  48. Fastenopfer, Switzerland
  49. Climate Watch Thailand
  50. Observatoire Tunisien de l’Economie, Tunisia
  51. SEATINI, Uganda
  52. Action for Argentina, UK
  53. Action for Southern Africa, UK
  54. Bond, UK
  55. Bretton Woods Project, UK
  56. Cafod (Catholic Agency for Overseas Development), UK
  57. Christians on the Left, UK
  58. Gender and Development Network, UK
  59. Global Justice Now, UK
  60. Health Poverty Action, UK
  61. Jubilee Debt Campaign, UK
  62. Jubilee Scotland
  63. Stamp Out Poverty, UK
  64. STOPAIDS, UK
  65. Tearfund, UK
  66. The Equality Trust, UK
  67. War on Want, UK
  68. Trademark Belfast
  69. Jubilee USA Network
  70. Maryknoll Office for Global Concerns, US
  71. Sisters of Charity Federation, US/Canada
  72. ActionAid Zambia
  73. Campaign for Active Voter Engagement in Zambia
  74. Caritas Zambia
  75. Centre for Trade Policy and Development, Zambia
  76. CUTS International, Zambia
  77. Jesuit Centre for Theological Reflection (JCTR), Zambia
  78. Transparency International Zambia
  79. Zambia Civic Education Association
  80. Zimbabwe Coalition on Debt and Development

References


Related: Over 100 groups worldwide call for debt cancellation to tackle public health crisis