The International Development Select Committee of the UK Parliament published a report on Tuesday morning, detailing the impact of Covid-19 in developing countries and urging the government to extend the G20’s Debt Service Suspension Initiative beyond June 2021.
The Select Committee report also urges the government to bring private lenders on board with the debt suspension scheme and calls on the government to consider debt-cancellation options for low- and middle-income countries.
Debt relief advocates greeted the report as needful and timely. “It shows that healthcare in some countries is grinding to a halt, and that more must be done to cancel the debts of developing countries, said the Director of Jubilee Debt Campaign, Sarah-Jayne Clifton, in a statement issued Tuesday after the report’s release.
“Covid-19 has accelerated and deepened the global South debt crisis,” Clifton also said. “Developing countries are spending $92 million dollars a day on debt payments, money which they desperately need to fight the pandemic.”
“The UK government is uniquely placed to take action on this issue as hosts of the G7 this year,” Jubilee Debt Campaign’s Director went on to say. JDC also says the UK should bring its leadership to bear on the present moment to foster multilateral action to tackle the Covid-19 debt crisis, calling especially for “action to ensure cancellation of debt owed to private lenders.”
Clifton said the voluntary participation of private lenders is insufficient to outface the crisis, and is calling on the government to use its G7 leadership to push for the mandatory inclusion of private lenders in the G20’s new Common Framework, which aims to help tackle the Covid-19 debt crisis in developing countries.
“It’s already clear that private lenders won’t cancel debts when they are asked to take action voluntarily,” the Jubilee Debt Campaign statement continued. “The UK and other rich countries need to go further and require the private sector to do their fair share in multilateral debt relief, and to put legal protections in place for developing countries in case the private sector fails to comply.”
The Catholic Bishops of England and Wales have also recently addressed the issue of debt relief, urging the UK government to push for debt cancellation at a G20 finance summit in July of last year. “To insist on debt repayment in the face of the suffering caused by this pandemic would be an affront to the faith traditions that we represent,” said 77 faith leaders — bishops, rabbis, imams, and others — signatories to a letter to the Chancellor ahead of the July G20 summit.
“Indeed,” they argued, “there is an overarching moral case for debt relief in many faiths.”
The Jubilee Debt Campaign group is now also calling on the government to consider updating the 2010 Debt relief (Developing Countries) Act to help support the implementation of the framework. New legal protections are needed here in the UK so that any developing country which owes debts under UK law and has to stop debt payments due to the crisis is protected from being sued by private lenders who fail to offer debt relief.