More than half of developing countries are estimated to be in debt distress, with interest payments accounting for at least a quarter of governments’ tax revenues in 2020 and raising to 40% in some countries, according to Jubilee USA Network. To make matters worse, the costs of dealing with intensifying climate impacts such as drought, flooding and tropical storms have not gone away. Unless the global community acts “fast, proportionally and comprehensively,” the health crisis could turn into a debt crisis, Mia Mottley, prime minister of Barbados, recently told a conference of African ministers. “We simply do not have the money, the fiscal space nor the policy space needed to build the green, resilient and inclusive development of which we speak,” she said.
Some good news though as the International Monetary Fund (IMF) is discussing issuing the equivalent of $650 billion in liquidity, known as special drawing rights (SDRs) into the global economy. Injecting liquidity may ease the immediate crisis, agreed Jason Braganza, executive director of the African Forum and Network on Debt and Development (AFRODAD), “but it does not go far enough to deal with the systematic and systemic structural issues of the global debt architecture.
Among other statements by various actors to address climate and debt vulnerabilities, Mr. Braganza emphasised that this must be the moment to address the power imbalance between rich and poor nations. The voice of African governments has to be included “as an equal player and a decision-maker rather than a decision-taker,” he said. read the full article here.
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