Industrial powers in the North and international institutions are more concerned about financial stability, fiscal sustainability and supply chains than by the living conditions of the majority of the world’s population

Unsurprisingly the outcome is that industrial powers in the North and international institutions are more concerned about financial stability, fiscal sustainability and supply chains than by the living conditions of the majority of the world’s population. The G20, the WTO, the World Bank and the IMF still turn down demands for the suspension of patents, free universal vaccination together with massive investments in public health systems. Yet to date the social and health situation of the popular classes that are most affected by the crisis resulting from the pandemic is deteriorating at a frightening pace. The debt crisis in countries of the South, notably the lower- and middle-income countries, further aggravates their political, food and economic dependence. Wage earners and small producers are those who must pay for the debt.

The World Bank, the IMF, G20 and Paris Club countries have all launched initiatives to respond to the debt crisis. Those attempts are all most unsatisfactory: the Debt Service Suspension Initiative (DSSI) and the Common Framework (CF) merely postponed the issue. More than a third of the 73 countries invited to participate in the DSSI turned down the offer lest they be discredited by rating agencies and international financial markets, and be subjected to a further swathe of austerity measures by the IMF. The Common Framework is even more of a failure; this initiative was supposed to extend the DSSI to private actors, who are the main creditors of those countries (up to 60%). Only 0.2% of the debt service owed to private creditors was suspended and only Ethiopia, Chad and Zambia called upon the CF to renegotiate their debt, so far in vain. In short, for the 46 countries concerned by the DSSI and the CF, less than a quarter of debt service (US$ 10.9 billion) was suspended. [1] More than a third of the countries of the South have suspended repayment or are about to do so. On 15 September UNCTAD indicated that “developing countries’ external debt sustainability deteriorated further” and called for “concerted debt relief and even cancellation in some cases,” so as to reduce developing countries’ over-indebtedness and to avoid another lost decade. [2] On 11 October, the WB pointed to the record level of debt in low-income countries and to an increase of over 5% of debt in developing countries. [3]

The CADTM calls once more for the replacement of those institutions and the formation of a united front of countries of the South to decide an immediate suspension of debt service based on the state of necessity and a fundamental change in circumstances

The outcome of the G20 summit, that brings together the countries that rule the world in the interests of Capital, makes it clear that no initiative in favour of debtor countries in the South will be taken to enable them to deal with the emergency and to achieve the Sustainable Development Goals by 2030, modest though they are. On the contrary, the only measures adopted are intended to guarantee debt repayment to banks of the North and private creditors.

The CADTM calls once more for the replacement of those institutions and the formation of a united front of countries of the South to decide an immediate suspension of debt service based on the state of necessity and a fundamental change in circumstances. Moreover, a debt audit with citizen participation is required to identify illegitimate, illegal, odious and unsustainable debts in view of their cancellation.