Development Finance International
23 November, Oslo. Launch of Updated Report: Resolving the Worst Ever Global Debt Crisis
Norwegian Church Aid and SLUG organised a seminar to launch the updated version of the report first produced in 2022, arguing for a Nordic Initiative to resolve the worst ever global debt crisis. The report is especially timely given that Norway has been invited by Brazil to join the G20 as a Guest during 2024. The updated report shows the global debt crisis is continuing to get worse, especially if measured by the degree to which high debt service is stopping governments from funding crucial spending on education, health, social protection and climate. It makes 10 proposals to resolve the crisis, including basing debt relief on country spending needs for the SDGs by ensuring it reduces debt service to below 15% of budget revenue from year 1; making sure all private, multilateral and domestic creditors participate; introducing laws to protect countries against lawsuits by holdout creditors; maximising transparency and accountability of new lending and debt relief agreements; ending “predatory” new lending and debt restructuring by amending the UN Convention Against Corruption; accompanying debt relief with low-cost new finance, reducing costs of market borrowing by using MDB guarantees; and building a more comprehensive supporting debt architecture, led by the UN. The summary can be found here.
11 October – The Worst Debt Crisis Ever: Shocking New Debt Service Numbers
DFI is today launching a new Debt Service Watch briefing which shows that debt service numbers are higher than they have ever been. For 139 borrowers from the World Bank, service is above the levels reached in the HIPC and Latin American debt crises. It equals their total spending on education, health, social protection and climate adaptation combined, and exceeds this spending by half in Africa. This briefing, jointly with AFRODAD, Debt Justice, Erlassjahr, EURODAD, LATINDADD and Norwegian Church Aid, shows that developing countries are in their worst debt crisis ever. Current debt relief deals are leaving countries paying half their budgets on debt service. Much deeper debt cancellation and measures to reduce borrowing costs are essential to rescue the Sustainable Development Goals. For the English version of the briefing, click here. For French, here. For German, here. For Spanish, here. For the underlying summary database in English, here.
20 September, New York – Heads of Government Declaration on Reforming SDG10
DFI, Oxfam, NYU-CIC and UNAIDS convened an event at the United Nations General Assembly, co-sponsored by the Governments of Colombia, the Maldives, Namibia, Sierra Leone, and Zambia, and supported by a further 10 UN member states. This followed on from the meeting at Minister and Ambassador level in July. At the event, Heads of Government signed a joint statement urging the UN and the World Bank to change their monitoring to focus on genuine inequality rather than “shared prosperity”, in order for them to accelerate progress on reducing inequality in their own countries and between countries. They also agreed to continue joint work towards this goal at the forthcoming IMF and World Bank Annual Meetings in Marrakech in October, and during the review of SDG Indicators to be conducted by the Inter-Agency Expert Group in 2024.
28 July – DFI Commissioned by IBP/Gates to Analyse Accountability on Debt
DFI has been commissioned by the International Budget Partnership and the Gates Foundation to conduct a scoping study analysing good practice and scope for improvement in the accountability of developing country governments to their domestic stakeholders (parliaments, audit institutions, civil society, media, judiciary) for their debt management policies and practices. Most analysis until now has focussed on transparency, but DFI and IBP share the view that it is essential to go beyond transparency to introduce policies and processes which allow governments to be held accountable. The study will be completed by December 2023 and include 3-5 case studies of good practice, as well as recommendations for a programme of actions to reinforce accountability worldwide.
11 July – Ouagadougou - DFI Report on Inequality in the Sahel Discussed at Inequality Forum
DFI has drafted a report on Inequality in the Sahel for Oxfam West Africa, which was discussed at a regional inequality multi-stakeholder forum in Ouagadougou. The paper emphasised the close links between growing inequality, climate change and political instability and insecurity in the region, which has also been also confronted by triple crises of COVID-19, debt and austerity. In this context, governments are doing far too little to reduce inequality, with more than 2/3 of the workforce having no labour rights leading to extreme wage inequality; governments spending well below needed amounts on education, health and social protection; and overdependence on unprogressive taxes such as VAT. It recommends a new social contract for the region focussed on enhancing labour rights, more progressive taxation and enhanced social spending.
