Campaigners are urging Labor to lead global debt relief by 2025, as new analysis shows lower-income countries are spending 15 per cent of their income on payments this year – the highest level in three decades.
Accounts of charity debt Justice based on information e World of EarthsPayouts from poorer countries dropped to 4.4% of income in 2011 but have since tripled.
“High debt payments prevent public spending necessary to eliminate poverty and tackle climate emergencies,” said Justice’s debt policy director Tim Jones.
Gideon Rabinowitz, director of policy and advocacy at Bond, an anti-poverty coalition, said: “Countries are being squeezed by less-than-sustainable debt, so debt plans should be on the international agenda next year. This debt crisis is a sign of a broken global financial system, which this cycle The recurrence of the debt crisis is imitated.
Among the countries looking at the highest pensions as a share of income in 2024 were Angola (65%), Laos (52%), Pakistan (43%) and Egypt (43%).
The International Monetary Fund (IMF) recently cost of a new $7bn loan in Pakistan – the latest in a string of players – despite warning that the country must be supported in its “high risk and narrow way”.
Angola earlier this year struck a deal with the China Development Bank – its biggest creditor – to break its debt. Chinese lenders, state and private, account for 13% of low-income repayments worldwide.
The world’s most recent writer is writing in International Debt Reportits chief economist, Indermit Gill, warned: “It’s time to face the truth: poorer countries against debt distress need debt relief if they have a shot at long-term prosperity.”
Labour’s general election manifesto cited “unsustainable debt relief” as a priority on the global development agenda.
With many global debt contracts governed by UK law, Justice Debt also called for Labor Legislation to legislate on private debt to enforce damages as part of future debt relief. Development minister Anneliese Dodds opposed such a law.
“The government needs to turn words into action by 2025, pushing for an effective new plan and legislation to get private lenders a share of the debt relief,” said Jones.
Debt costs for lower-income countries are expected to remain high in 2025, at 14%.
With some denominated in dollars, payments would increase further in the countries’ domestic currencies if the greenback rises from the foreign exchange market as many analysts predict as a result of Donald Trump’s policies.
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Pope Francis has called for debt relief as part of the Jubilee year for Catholics, in 2025, the first since 2000. This month he said: “In the spirit of this Jubilee year, we encourage the international community to work towards the forgiveness of foreign debt in recognition of the ecological debt between the north and the south of this world existing The appeal is indeed of solidarity, and above all of justice.
The crippling financial burden on developing countries in the 1990s sparked the successful Jubilee 2000 campaign for debt forgiveness, which eventually resulted in $130bn (£102bn) of debt being written off. As chancellor, Gordon Brown took a leading role in that campaign.
When it came to power in July, Keir Starmer’s government opted not to scrap the Tories’ plan to scrap the Department for International Development (DfID), which was set up by Labor in 1997 but abolished by Boris Johnson.
Nor did the labor say that when adverse cuts were made to the overseas aid made by the Johnson administration, that ditched the pledge to spend 0.7% of national income on development. Rachel Reeves did not mention further aid or development in her economic speech in October.
A UK government spokesman said: “We are deeply concerned about the debt challenges faced by low-income countries. Helping developing countries so that debt cannot be tackled is a key development priority for this government.”
“The UK, together with international partners, is doing its full part to support countries that are facing debt problems, through the international market, as well as looking to strengthen the system for the future.”
World Bank data classifies 84 countries as either low-income or lower-middle-income, and upper-middle-income countries are designated as small island developing states.