Debt relief for poor countries essential in global fight against coronavirus

Oxfam New Zealand is calling on the New Zealand government to free up spending for global public health, by advocating for the immediate cancellation of all external debt payments due to be made in 2020 by developing country governments.

Oxfam New Zealand’s Advocacy and Campaigns Director Joanna Spratt said: “Countries around the world need to massively scale up their health budgets to fight the coronavirus crisis. But the very poorest countries are due to spend US$40 billion on debt payments in 2020 alone.

“World leaders are meeting this week to talk about debt cancellation at the IMF and World Bank Spring Meetings. While the G20 have already agreed to a suspension, this only kicks the problem down the road. This moment of unprecedented need requires at least a cancellation of all debt payments owing this year, so that money can instead help save millions of lives.

“Many of our neighbours in the Pacific region are already at high risk of debt distress. Countries like Papua New Guinea, where they only have 14 ventilators for their eight million people, currently spend more on debt repayments than public health. Until we are all safe, no one is safe.”

“New Zealand can be an advocate for debt cancellation at the World Bank and IMF meetings – as an aid donor that doesn’t give loans, our position on this is strong. We have a responsibility to advocate for our neighbours facing this intolerable situation.”

Oxfam’s recent report Dignity Not Destitution highlights how the coronavirus and the disruption caused to the global economy could push up to half a billion more people into poverty. It also shows that 46 countries were spending on average four times more money on paying debts than they were on public health services at the beginning of this year, when the coronavirus was spreading.

“This pandemic will require a massive injection of resources to support economies, so it makes no sense for poorer countries to be transferring vital resources to the rich world. The costs of the debt burden are paid by the poorest people, in cuts to government services, and women are the hardest hit.”

Over 200 organisations, including Oxfam, have signed a statement calling for the cancellation of all debt payments due from developing countries to bilateral, multilateral and private creditors. In addition more than 750,000 people have signed a petition calling for urgent debt relief.

The international aid agency is also advocating for the New Zealand government to provide NZ$25 million in immediate, additional humanitarian funding as part of an emergency coronavirus response package for people living in the world’s worst crisis and emergency situations; and for the protecting and maintaining of existing aid and climate finance budgets so that fewer people are thrown into poverty by the global pandemic.

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For more information, please contact:
Kelsey-Rae Taylor on Kelsey-Rae.Taylor@oxfam.org.nz or +6421 298 5894.

Notes to editors:
Over 200 organisations, including Oxfam, have signed a statement calling for the cancellation of all debt payments due from developing countries to bilateral, multilateral and private creditors, and more than 750,000 people have signed a petition calling for urgent debt relief.

Oxfam’s recent report ‘Dignity Not Destitution’ calls for an ‘Economic Rescue Package for All’ to support poor countries in tackling the crisis and rebuild a more equal world. Debt relief, together with aid and tax policy, is on the front line of these global plans for public health and economic rescue.