Press release

Debt Crisis: a wasted G20 Summit

18 October 2021 by CADTM International

As usually happens on the eve of the annual assemblies of the IMF and the World Bank, a G20 summit was held on 13 October 2021 in Washington D.C.

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 G20 The Group of Twenty (G20 or G-20) is a group made up of nineteen countries and the European Union whose ministers, central-bank directors and heads of state meet regularly. It was created in 1999 after the series of financial crises in the 1990s. Its aim is to encourage international consultation on the principle of broadening dialogue in keeping with the growing economic importance of a certain number of countries. Its members are Argentina, Australia, Brazil, Canada, China, France, Germany, Italy, India, Indonesia, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, USA, UK and the European Union (represented by the presidents of the Council and of the European Central Bank). , the WTO WTO
World Trade Organisation
The WTO, founded on 1st January 1995, replaced the General Agreement on Trade and Tariffs (GATT). The main innovation is that the WTO enjoys the status of an international organization. Its role is to ensure that no member States adopt any kind of protectionism whatsoever, in order to accelerate the liberalization global trading and to facilitate the strategies of the multinationals. It has an international court (the Dispute Settlement Body) which judges any alleged violations of its founding text drawn up in Marrakesh.

, the World Bank World Bank
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

and the IMF IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.
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 Paris Club This group of lender States was founded in 1956 and specializes in dealing with non-payment by developing countries.

countries have all launched initiatives to respond to the debt crisis. Those attempts are all most unsatisfactory: the Debt Service Debt service The sum of the interests and the amortization of the capital borrowed. 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 Rating agency
Rating agencies
Rating agencies, or credit-rating agencies, evaluate creditworthiness. This includes the creditworthiness of corporations, nonprofit organizations and governments, as well as ‘securitized assets’ – which are assets that are bundled together and sold, to investors, as security. Rating agencies assign a letter grade to each bond, which represents an opinion as to the likelihood that the organization will be able to repay both the principal and interest as they become due. Ratings are made on a descending scale: AAA is the highest, then AA, A, BBB, BB, B, etc. A rating of BB or below is considered a ‘junk bond’ because it is likely to default. Many factors go into the assignment of ratings, including the profitability of the organization and its total indebtedness. The three largest credit rating agencies are Moody’s, Standard & Poor’s and Fitch Ratings (FT).

Moody’s :
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 UNCTAD
United Nations Conference on Trade and Development
This was established in 1964, after pressure from the developing countries, to offset the GATT effects.

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.


[1See Jubilee Debt Campaign, “G20 initiative leads to less than a quarter of debt payments being suspended”, 12 October 2021 :

[2Press release, “UNCTAD Trade and Development Report 2021: from recovery to resilience: hanging together or swinging separately?” UNCTAD/PRESS/PR/2021/027, 15 September 2021,

[3World Bank, “Low-Income Country Debt Rises to Record $860 Billion in 2020,” 11 October 2021,

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