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The Asia Debt Monitor is an e-publication of the Asian Peoples' Movement on Debt and Development.

The full APMDD Asia Debt Monitor 2023 Issue #2 can also be downloaded pdfhere.

Asia Debt Monitor 2023 Issue #1 can be found here.

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An Open Letter to the Governments of the Group of Seven States

on the occasion of their 49th Summit, Hiroshima, Japan 

No more false debt solutions!





As you, leaders of seven of the world’s richest countries convene for your  49th summit, many Asian countries of the Global South are gripped more tightly than ever in a multiple crisis of development and climate change. Yet the level of development and climate finance needed for survival and beyond, remains far below what is required to undertake deep, wide and transformative changes for people and the planet. 


There was a momentous opportunity for your governments  to step up in 2020 at the onset of  the COVID-19 pandemic, when you committed  “to support the poorest and most vulnerable countries as they address health and economic challenges associated with COVID-19.” But tragically it was missed, like many other opportunities you have lost in taking heed of the conditions and calls of the developing world and embarking on meaningful change. 


Instead, you pushed solutions that missed the mark, as evinced by today’s sharper inequality divides within and across countries, further debt accumulation and crushing debt service, and by the millions more pulled into extreme poverty and rendered more vulnerable to  intensifying climate change. Only last year under the German presidency, you claimed special responsibility for shaping a future of “prosperity, stability and solidarity”, including achieving sustainable solutions for critically debt-trapped countries. But we find no substantive, decisive steps in this direction.

Your governments vigorously supported the G20/Paris Club’s Debt Service Suspension Initiative (DSSI) which was limited to less than half of developing countries, and has proven grossly inadequate in matching the depth and breadth of the debt catastrophe. You left behind middle-income countries (MICs) where 80% of people falling into absolute poverty due to COVID-19 struggled to survive. DSSI’s mere deferral has come with a backlash of more oppressive repayment obligations from 2022 onwards, and under much more trying economic and financial conditions, absent additional debt reduction measures. You also promoted the development of DSSI’s successor, the Common Framework for Debt Treatments beyond DSSI, which still fails to compel the participation of private sector lenders, a flaw that has led to their bailout with the new loans from multilateral institutions. You must also be held to account for your continued support of such failed and futile debt “relief” mechanisms that exclude MICs, in the face of the deeper debt trap into which MICs like Sri Lanka and Pakistan have fallen.

Meanwhile, your governments, together with international financial institutions and lenders are at the forefront of promoting more loans and private investments as so-called win-win solutions to both the development and climate crisis. In doing so, you are plunging Global South countries into a greater debt debacle that will cause more deprivation and misery, while evading your historical responsibility for the climate emergency and unjustly shifting your obligation to deliver  grants-based climate finance to peoples of the Global South, who least contributed to the crisis of climate change.


Reiterating our call and demands, we strongly urge your governments to — 


  1. Cancel the debt for countries in need, including public debts of a questionable and fraudulent nature that violated human rights and contributed to exacerbating the climate crisis.
  2. Support the elimination of IMF surcharges, which penalizes the most debt-distressed countries and further erodes the capacity of developing countries to respond to urgent social needs. 
  3. Enact/strengthen national legislation to require the participation of private creditors in debt relief, which is a key element in any serious wide scale debt reduction or restructuring effort. 
  4. Immediately deliver new, additional and non-debt creating climate finance for adaptation, mitigation and loss and damage, much more than the unfulfilled $100 billion/year pledge, to adequately meet the needs of the Global South. 




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IMF-World Bank Spring Meetings: Pursuing false solutions to the debt catastrophe


The current political turmoil in Pakistan adds another layer of misery to millions of people in this debt-trapped country. For Sri Lanka, the relative calm on the surface may be short-lived as it embarks on the hard road of austerity charted by the International Monetary Fund. As feared, there was no sign of forthcoming relief from the Bretton Woods institutions' meeting last April, who continued to promote more borrowings and de-risking private sector investments among their main fiscal responses. 

Once again, the IMF and the World Bank, the Bretton Woods institutions sought to prove their relevance in a world wracked by deepening multiple crises. At the 2023 Spring Meetings, they “recommitted to… the vision of a poverty-free world and pledged to explore new solutions to tackle an ever-present set of threats to development and the lives of the poor…”

But the avowals of these international financial institutions (IFIs) hold increasingly less water as countries teeter at the edge of bankruptcy and default with debts accumulating to a 50-year high. 

They did not delve into persistently high inflation rates and more burdensome debt service payments and how this is further deepening inequality and poverty. They did not look closely at skyrocketing prices of basic goods, acute food and fuel shortages, and intensifying climate change in countries that are also cutting back on badly needed social spending to meet debt repayments. 



Pakistan is one of the countries. By the World Bank’s own figures, 11 million people in South Asia added to the global poverty headcount of almost 660 million. Inflation has reached an unprecedented 37.5%, the highest since 1973, with dire results for the Pakistani people. Food inflation ballooned by 47.15% in March from a year before. Transport prices have also soared by 54.94%. Pakistan has increased taxes to raise more revenues amounting to $643 million, a key IMF conditionality for Pakistan to avoid a default. But despite austerity and more taxes, the overall fiscal deficit still rose by 22.7% due to higher interest payments. On top of these, the IMF is collecting millions of dollars from Pakistan in the form of surcharges that the Fund levies for high debt levels and failure to pay outstanding obligations on time.  

Still, the Pakistan government prioritizes meeting debt repayments this year, jumping from pillar to post to borrow more. Some 10 million remain without access to safe drinking water six months after the monsoon floods that global warming and glacial melt made catastrophically worse. In recent weeks, flour shortages have plagued Pakistanis, several of whom were killed and injured in the long queues for the  staple. Still, more than $22 billion will be collected from the Pakistani peoples for debt repayments maturing in 2023. IMF negotiations for a delayed $1.1 billion loan tranche, part of a $6.5-billion bailout agreed in 2019, drag on while foreign exchange reserves dwindle. 



For Sri Lanka, the IMF bailout package of nearly $3 billion-worth further adds to the country’s debt  levels and clears the way for this debt-dependent country to access more debts. In the meantime, it remains at the  mercy of the Fund’s austerity conditionalities attached to debt restructuring. Inflation is still staggering at 59 percent and nearly 30 percent of the population is experiencing food insecurity, according to the UN. 

Sri Lanka also illustrates the failure of G20 debt reduction schemes – promoted vigorously by the IMF and the World Bank –  to require the participation of private creditors in addressing the debt crisis. Following  Sri Lanka’s default in 2022, it was sued for full payment by the Hamilton Reserve Bank which holds $250 million of the country’s 5.875% International Sovereign Bond by the Hamilton Reserve Bank.  Negotiations are still ongoing with other private creditors holding $1.633 billion of Sri Lanka’s  International Sovereign Bond. 

The burden of filling in the gaps to provide even minimally for their families and children often falls heavily on women, at the expense of their own health and well-being amid the pandemic. One in four households in Sri Lanka is headed by women, of which half are widows and face persistent difficulties of juggling family responsibilities with paid and informal, precarious work, discriminatory attitudes toward women, limited access to finances, and inadequate social protection, among others. 



As expected, the IMF and the World bank affirmed their support for strengthening the  Common Framework to debt treatments, the successor to the failed Debt Service Suspension Initiative. Both measures have proven ineffective in bringing private lenders to restructure public debts in any significant terms that will enable Southern borrowers grappling with crises. 

Enhancing the Common Framework was discussed at the Spring meetings, particularly in the  Global Sovereign Debt Roundtable, a World Bank-initiated process that suffers from the same opacity and democratic deficits in the IFIs. Only a few borrowing countries have been invited to participate in this process that also includes from its first meeting in February 2022 bilateral and private lenders. Again, we see the sidelining of long-standing civil society calls for a fair, transparent, binding and multilateral framework for debt crisis resolution under UN auspices where sovereign debt issues and resolutions can be democratically discussed.

Another highlight of the Spring meetings was to declare progress with the rollout of the World Bank’s so-called Evolution Roadmap. As a way of mobilizing greater climate finance, its key  tracks are to reform multilateral development banks to expand their lending capacity and leverage or de-risk private finance with public money and investments in order to attract more buy-in by private actors.  

What this clearly forebodes is even more accumulation of debt and promotion of unaccountable private finance for Sri Lanka, Pakistan and many other global South countries which are also among the most climate-threatened in the world. In effect, the Evolution Roadmap maintains the IFIs’ stance that surviving the climate emergency reverts back to debt-trapped Pakistan, even as it contributed less than 1% of global carbon emissions and is owed a climate debt and reparations by global North countries.  



Pakistan and Sri Lanka count among many other global South countries similarly situated in multiple crises that are systemic in nature and character, and require no less than systemic and structural change.

The World Bank and the IMF are clearly in no position – by virtue of the interests they represent and protect, and a track record of aggressively promoting debt dependence and austerity conditionalities  – to immediately provide just solutions that borrowing countries need, much less transformative solutions over the long term.  

Reiterating our demands, we stress the need for unconditional and immediate cancellation of unsustainable and illegitimate debts of Sri Lanka, Pakistan and all countries of the South!

We roundly reject the false debt solutions promoted by the IMF-World Bank and other international institutions, the G20 and the Paris Club!

We call on peoples’ organizations and movements to mount wider, stronger actions for debt justice and for the transformation of an exploitative international financial architecture to one that works for people and planet.   ■


The statement can also be downloaded pdfhere

Read more about rethinking IMF programs in Sri Lanka and Pakistan here

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This policy brief can also be downloaded pdfhere

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cspf 2023 flyerLast April 12, APMDD joined debt justice groups and partners in holding a session dubbed “Achieving debt crisis resolution that delivers today and in the future,” at the Civil Society Policy Forum of the IMF and World Bank. The event was lead-organized by Latindadd and co-sponsored by APMDD, AFRODAD, Jubilee USA, Eurodad, SLUG, Arab Watch Coalition, SEATINI Uganda, Society for International Development, ActionAid and Christian Aid.

The panel discussion revolved around the worsening economic situation across all developing regions, marked by increasing debt burdens in low- as well as middle-income countries, and the failure of G20 and Paris Club debt relief measures to rise to the  challenge. Supported by the IMF and the World Bank, these moves provide no genuine solutions and only point to ever-increasing debt dependence and accumulation.   

In the Latin America and Caribbean region, indicators spell out declining economic growth, uncertainty, inflation and debt risks. However, as Latindadd notes, “the responses suggested by multilateral organizations and the G20 focus on a return to fiscal rules, fiscal adjustment measures, increased borrowing through the extension of IMF and Multilateral Development Bank loans, as well as increased private financing. The IMF and the World Bank (WB) point out that global uncertainty is part of the collateral effects of the war and that, compared to what they expected last fall, the economy seems to have been more resilient, and the worst macroeconomic risks would not have materialised.” 

The situation is not substantively different in other Global South regions where solutions being applied do not reflect changes in the lending and borrowing landscape, such as the shift from concessional to non-concessional types of loans sourced from capital markets. This has precisely paved the way for countries like Zambia and Ghana to sink into deeper debt catastrophes.

In Asia, external borrowings of low and middle-income countries in East Asia, the Pacific and South Asia regions broke records at $1.23 trillion by end-2020 or almost their entire export earnings for the year. In the same period, they paid $115 billion in debt service to international financial institutions and private lenders, or $98 billion more than in 2019. (See sidebar below.)

Patricia Miranda (Latindadd) moderated the interventions of panelists which included Jason Braganza (Afrodad), Maria Colodenco (former head of International Affairs of the Argentine Economic Ministry), Mark Flannagan (IMF) and Mae Buenaventura (APMDD).



Asia has countries with a heavy burden of debt and some cases with a debt restructuring process that is not delivering for people. How are we faring under the current debt system? What are the main calls from Asia debt movements?


We passed the third year since COVID19 was declared a pandemic,  and while in the world stage, it seems like we’re out of it, millions of people in the South remain gravely vulnerable, not only to ill-health but also to the intensifying  climate crisis, lack of basic public services, food and fuel shortages that are growing more acute, to name a few. They include women whose largely unremunerated care work is cushioning societies from even more severe impacts, who are feared by UN Women to number 475 million in extreme poverty by 2030.

External borrowings of low and middle-income countries in East Asia, the Pacific and South Asia regions broke records at $1.23 trillion by end-2020 or almost their entire export earnings for the year. In the same period, they paid $115 billion in debt service to international financial institutions and private lenders, or $98 billion more than in 2019. Prior to the pandemic, the average government debt-to-GDP ratio in developing countries in the Asian and Pacific region was already at an 11-year high of 40.6 per cent in 2019. This jumped to 49.5 per cent in 2021 with two thirds of Asia-Pacific economies reaching the highest level since 2008. Rising interest rates in 2022 have added further pressure to the debt service payments, which is increasing in many countries in the region.

Conditions are dire in South Asia, where all countries recently downgraded  their growth forecasts. In recent weeks, flour shortages have plagued Pakistanis - even taking lives while queueing for this staple. Some 10 million are still without access to safe drinking water six months after the monsoon floods that global warming and glacial melt made catastrophically worse. But more than $22 billion will be collected from them as debt repayments within 2023. IMF negotiations for a delayed $1.1 billion loan tranche, part of $6.5-billion bailout agreed in 2019, drag on while foreign exchange reserves dwindle. Pakistanis are also shelling out millions of dollars as IMF collects surcharges for high debt levels and failure to pay outstanding obligations on time.  Still, the Pakistan government prioritizes meeting debt repayments this year, jumping from pillar to post to borrow more.

Sri Lanka, whose GDP was forecasted by IMF to contract by 4.3 percent remains at  the mercy of austerity conditions attached to debt restructuring. Calm seems to have settled over the country but beneath it, are millions of diminished lives, inadequate food, much reduced incomes.  Inflation is still staggering at 59 percent. Nearly 30 percent of the population is experiencing food insecurity, according to the UN. The $3-billion bailout package from the IMF is but  a window to more debt of about $4 billion from the World Bank, Asian Development Bank and other lenders.

In Southeast Asia, Lao PDR was downgraded by WB in its an annual economic growth rate to  2.5%, the second lowest since 1988 and below earlier projections. Rising public and publicly guaranteed debt are projected to exceed 100 per cent of GDP by the end of the year. This is accompanied by a sharp depreciation of the national currency and rising inflation which  has risen swiftly from below 2 per cent in 2021 to 37 per cent in October 2022. (https://www.eastasiaforum.org/2023/01/28/laos-in-limbo-heading-into-2023/) According to the WB, debt service obligations will average $1.3 billion per year for 2023-26, or close to the total stock of official foreign reserves recorded in June 2022. (https://www.worldbank.org/en/country/lao/publication/lao-economic-monitor-oct-2022-tackling-macroeconomic-vulnerabilities-key-findings)


On the G20 and Paris Club Debt Relief Schemes


Pakistan, Nepal and Lao PDR availed of the temporary and limited debt relief afforded by the DSSI but obviously, this inadequate measure has proven a failure for the 43 countries that accessed it, whose debt problems systemically began many years before COVID-19. After the DSSI ended in 2021, they had to make their “regular” debt payments as well as also reimburse the debt service that was suspended under DSSI in the first place. The amounts suspended, as they fall due in coming years, will be more significant. As per the G-20 recommended rescheduling terms to the USD 12.9bn of debt service suspended over April 2020 – December 2021: the USD 3.2bn suspended over April 2020 – December 2020 are assumed to be reimbursed over 3 years after 1 year of grace period, and the USD 9.7bn suspended over January 2021 – December 2021 are assumed to be reimbursed over 5 years after 1 year of grace period.


The Common Framework is also proving inadequate, as their proponents have admitted, but they continue to be insistent on fitting the problem to their solution rather than the other way around. debt treatments under the Common Framework require an active IMF programme, which  carries with it unpopular austerity measures that governments may be averse to carry out for political reasons. Meantime, IFIs and other lenders have been finger-pointing, particular at China’s lending as the obstacle. 


As Pakistan, Nepal and Sri Lanka have also shown, the exclusion of middle-income countries in debt reduction efforts is also being proven wrong. Based on narrow debt-sustainability MICs have exhibited relatively more significant declines in their financial conditions since the North started monetary tightening. Coming from decades of economic difficulties and debt accumulation, MICs’ deterioration came faster and with greater impact from the cascading and combined effects of higher interest rates, inflation, skyrocketing commodity prices, climate catastrophes and already elevated debt levels from previous years. But this is the  result of debt sustainability analysis that puts a premium on meeting creditor claims and is divorced from context and actual  development needs, human rights, gender equality and climate commitments.


Among so-called reform initiatives taking center stage here in the Spring meetings, is the World Bank’s Evolution Roadmap and the Global Sovereign Debt Roundtable. Again, the metaphor of the Emperor’s New Clothes comes to mind – but more alarmingly …Because more debts and private sector investments are being pushed as supposedly bolder responses to the defining crises of our times, the crises of development and of climate change. Because they did not benefit from public scrutiny by  other important stakeholders such as civil society, media and borrowing countries as would have been possible in a multilateral system such as the UN, with more equitable and democratic participation spaces for participation and expressing divergent views.


What do we want? – A reiteration of civil society calls and demands


In the context of multiple crises, the increasingly  dire situation of burdensome debt in Asia and other global south regions underscores this anew – that Business-as-Usual, piecemeal, short-term and limited interventions applied to systemic and structural problems of long-standing are, by any other name, false solutions.

As part of global debt justice movements, we reiterate our demands for -- 

1. Unconditional, extensive and massive debt cancellation for all countries in need, including to both low and middle-income countries, assessed with respect to their development financing requirements, and provided by all creditors (bilateral, multilateral, and private). Illegitimate debts must be immediately cancelled.  

Many debt-burdened countries of the South are also among the most vulnerable to climate emergencies. From a Southern perspective, they  have  paid their debt many times over from net transfers of natural and human resources to the Global North, which is well established to have contributed heaviest to the climate crisis and are treaty-bound to deliver climate finance to the South. The demand for debt cancellation and grant-based climate finance, not more loans, is a demand for justice and reparations.


2. A debt architecture reform agenda for real change and real solutions. We stress once again our call on governments to establish a fair, transparent, binding and multilateral framework for debt crisis resolution (under the auspices of the UN and not in lender-dominated arenas) that address –

a. Debt cancellation – granted to all countries in need and by all creditors (bilateral, multilateral and private)

b. Human rights – use human rights and development impact assessments in debt sustainability analysis


“It is time for a bold shift in thinking about public debt sustainability. We propose an augmented approach that assesses public debt viability that takes into account a country’s SDG investment needs, government structural development policies aiming to boost economic competitiveness, and national SDG financing strategies.” (Armida Salsiah Alisjahbana, United Nations Under-Secretary-General and Executive Secretary of ESCAP)


c. Responsible borrowing and lending – agree on common and binding principles

d. Credit rating agencies – assess systemic risks posed by financial sector instruments and actors including regulation of credit rating agencies


In addition, we underscore our calls for --

  1. The immediate delivery of new, additional and non-debt creating climate finance for adaptation, mitigation and loss and damage, far beyond the unmet $100 billion/year pledge, that adequately meets the needs of the Global South;
  2. Thorough-going national and global review and changes in lending, borrowing and payment policies and practices aimed at preventing the re-accumulation of unsustainable and illegitimate debt, strengthening democratic institutions and processes, upholding human rights and peoples' self- determination, and bringing the IMF, World Bank and other global lenders to justice;
  3. Genuine participatory, inclusive debt transparency and accountability mechanisms and processes, including national debt audits, that will critically examine the nature, purpose, terms and conditions, actual use of loans, and the impacts of loan-supported policies and programs;
  4. The establishment of a fair, transparent, binding and multilateral framework for debt crisis resolution (under the auspices of the UN and not in lender-dominated arenas) that addresses unsustainable and illegitimate debt and recognizes the priority of human rights obligations for all involved; and,
  5. Reparations for the damages caused to countries, peoples and nature, due to the contracting, use and payment of unsustainable and illegitimate debts and the conditions imposed to guarantee their collection.


Watch the full panel discussion here: https://www.youtube.com/watch?v=W6ADWp3xPDg