The Future is Equal

Oxfam reaction to G20 announcement to tackle the debt crisis facing many developing countries

Oxfam welcomes the G20 Finance Ministers’ discussions over the past few days around a new ‘common framework’ to tackle the debt crisis facing many developing countries. But this is no breakthrough – far from it. The G20 is lacking any sense of real urgency and – even worse – after waiting decades for a proper platform to tackle this problem, low and middle-income countries remain outside the room where discussions are happening and standards are being set. Only China, India, Turkey and the G20 members have been added to the old Paris Club of privileged rich countries. The power placed in the hands of the IMF as a gatekeeper for any agreement seems excessive.

Poor and increasingly even middle-income countries are under massive debt pressure right now. In the past few hours Zambia alone has been reported as being on the brink of defaulting on its $12 billion foreign debt. Without debt cancellation now, we could see developing countries falling into default like dominoes. Already many of them cannot afford their doctors and nurses. The chances of them recovering quickly from the coronavirus pandemic is precarious already. The G20 governments must stand up for people especially in poorer countries and announce preventative suspensions and cancellations, rather than forcing poor countries to “self-select” as to their distress. There can be no more excuses for not insisting that private creditors are part of binding mechanism for securing debt relief agreement.”