The IMF plays a crucial role in recognising and solving debt crises in the Global South. On the occasion of the spring meeting of the IMF (International Monetary Fund) and the World Bank (17-19 April 2024) in Washington, erlassjahr.de, Misereor and Bread for the World express their views:
The IMF and World Bank should launch these measures now!
"The current debt crisis is eating up urgently needed financial leeway. Scope for the fight against climate change, for social security and for investments for a socially and ecologically just future. In 2024, countries in the Global South will have to service more debt than ever before to their foreign creditors. In 45 countries, more than 15 per cent of government revenue goes towards servicing foreign debt. On the occasion of the spring conference, Misereor is calling for a long-term political solution to the debt crisis by creating a fair and binding sovereign insolvency procedure. The IMF and the World Bank are politically influential creditors, as together with other multilateral development banks they hold around 28 per cent of the global South's debt!"
Dr Klaus Schilder, development finance expert at the Catholic development cooperation organisation Misereor
"The results of current debt rescheduling negotiations in critically indebted countries such as Zambia, Suriname and Sri Lanka show a dangerous trend: creditor interests dominate, so there is hardly any real debt cancellation. The IMF claims a central role in recognising and resolving debt crises. At the spring meeting, concrete steps must be agreed on how real and sufficient debt cancellations can be ensured. The IMF must ensure that its debt sustainability analyses and required austerity measures are not used to legitimise too little debt relief."
Kristina Rehbein, Political Coordinator of erlassjahr.de, a Germany-wide alliance of more than 500 organisations
"The current debt crisis can only be solved sustainably if all creditors are involved - including private and multilateral creditors. The World Bank itself must therefore also participate in comprehensive debt cancellations. The fact that it has so far refused to do so in view of its credit rating is a slap in the face for the massively over-indebted countries. This means that the World Bank is not fulfilling its role as a responsible lender."
Ute Straub, International Financial Policy and Development Finance Officer at Bread for the World, the Protestant aid organisation in Germany for global development cooperation
Klaus Schilder (on site +49 170 2083559), Kristina Rehbein (on site +49 176 24843704) and Ute Straub (on site +491520 9347119) will be present during the Spring Meeting in Washington and are available for interviews.
Background:
More and more countries are groaning under the ever-increasing debt service. This is shown by the recently published Debt Report 2024 by erlassjahr.de and Misereor: of 152 countries in the Global South analysed, more than half are critically (60 countries) or even very critically indebted (24 countries). Governments of countries in the Global South will have to repay more to their foreign creditors in 2024 than ever before: a total of more than one billion US dollars per day.
Further information:
"Debt crisis" website
