MPs and Peers from across political parties have joined calls for debt payments to be cancelled for the world’s poorest countries in response to the pandemic.
At the weekend faith leaders across the UK united in a call to urge Chancellor Rishi Sunak to work with other finance ministers to cancel debt for the world’s poorest countries.
88 parliamentarians of varying faiths and none have now supported that call with a letter coordinated by Catherine McKinnell MP, Chair of the Parliamentary Friends of CAFOD, the Catholic Agency for Overseas Development.
Commenting on the letter, Catherine said:
“64 of the world’s poorest countries went into this crisis spending more on debt payments than they were on their own countries’ healthcare. The global health crisis is now hitting their economies hard and whilst there is international agreement on suspending debt payments this year, this is only storing up problems for a debt crisis in future.
“At a time when these countries are tackling the virus and responding to the challenge of climate change, the right thing to do for the most vulnerable people around the world is to cancel the payments entirely.
“I hope the Chancellor will listen to this cross-party, multi-faith call by cancelling the debt payments until at least next year, and also persuade other countries and institutions to do the same.”
Catherine also raised this issue at International Development questions in the House of Commons yesterday.
The world's poorest countries went into #covid19 spending more on debt payments than their own healthcare. There are…
Full text of the letter:
Dear Chancellor of the Exchequer,
We are writing to you as members and supporters of the Parliamentary Friends of CAFOD, the official aid agency of the Catholic Church, including those sharing a variety of faiths and none, as we are deeply concerned about the impact the Coronavirus pandemic is having on the world’s poorest people. With the G20 finance ministers meeting coming up, we are reaching out to urge you to use this opportunity to ensure countries that are suffering from the economic fallout of the pandemic are given the full debt cancellation they need to survive, recover and rebuild from this crisis.
Across the world, low and middle-income countries are not only dealing with the ongoing health emergency but are also facing unimaginable financial hardship. The global economic slowdown means this will only get worse in the months and years ahead as the price of raw materials collapses, demand for exports declines and remittances are scaled back.
We know that the quickest way to address this worrying financial outlook is to keep money in developing countries by cancelling debt payments. At the start of 2020, 34 countries were already in debt default or at high risk of being so, and before the coronavirus crisis began, 64 developing countries were already spending more on debt payments to other governments or institutions than they were on their own countries’ healthcare.
Pope Francis has spoken out recently on the injustice of debt, saying: “It cannot be expected that the debts which have been contracted should be paid at the price of unbearable sacrifices. In such cases it is necessary to find… ways to lighten, defer or even cancel the debt.”
Similarly, the Symposium of Bishops Conferences of Africa and Madagascar (SECAM) has said: “Undoubtedly, initiatives have already been taken in the management of the impact of the pandemic, but we would like to go further to plead for the massive cancellation of debts of African countries, to enable them to revive their economies.”
We welcome the leadership shown by the UK thus far, and welcome steps taken including the contribution of £150 million to the IMF’s debt relief scheme and the move, as part of the G20, to suspend debt payments due to other governments in 2020 from the 77 poorest nations – saving an estimated $12 billion.
These are important first steps, but they do not go far enough. Suspending, rather than cancelling, debt is only a temporary solution and does nothing to tackle unsustainable debt levels in the long term. It means that without further action, countries will face an even bigger debt crisis in two years’ time. Furthermore, in focusing only on loans to other governments, the G20 debt relief fails to address the issue of debt owed to private lenders or to multilateral banks.
Developing countries that are suffering the health and economic impact of Covid-19 need their debt payments to all creditors (bilateral, multilateral and private) cancelled immediately to enable them to care for people affected and to help their economies to recover in a way which protects, rather than damages, our common home.
We urge you to take the following proposals to the G20 Finance Ministers meeting so that you can work with your counterparts to ensure debts are cancelled for those countries that need it, and a future debt crisis is prevented:
1) G20 to cancel all bilateral debt payments for the countries that need it until at least the end of 2021.
2) Call on the World Bank and IMF to cancel all debt payments for the 77 poorest nations, and all additional countries that need it, until at least the end of 2021.
3) Ensure all debt cancellation efforts include debts owed to private creditors and call on private lenders not to take legal action against any country who stop debt payments due to the economic fallout of the Coronavirus pandemic.
4) Prevent a future debt crisis by committing to work with other governments and international institutions in a new global process for long-term debt restructuring to bring debt repayments from the poorest nations to a sustainable level.
Once again, we thank you for your work thus far on debt relief and hope that you will use this upcoming opportunity to take this work further so that all countries are able to recover from this global pandemic.
With kind regards,
Catherine McKinnell MP, Chair of the Parliamentary Friends of CAFOD
Rt Hon Hilary Benn MP
Rt Hon Andrew Mitchell MP
Daisy Cooper MP
Stella Creasy MP
Jon Cruddas MP
Alex Cunningham MP
Allan Dorans MP
Dr Stephen Farry MP
Margaret Ferrier MP
Patricia Gibson MP
Patrick Grady MP
Andrew Gwynne MP
Claire Hanna MP
Rt Hon Dame Margaret Hodge MP
Chris Law MP
Tony Lloyd MP
Caroline Lucas MP
Kenny MacAskill MP
Steve McCabe MP
Rt Hon John McDonnell MP
Carol Monaghan MP
Dame Diana Johnson MP
Sir David Amess MP
Virendra Sharma MP
Tommy Sheppard MP
Alyn Smith MP
Laurence Robertson MP
Rt Hon Stephen Timms MP
Dr Philippa Whitford MP
Rushanara Ali MP
Paula Barker MP
Dr Lisa Cameron MP
Sarah Champion MP
Yvonne Fovargue MP
Ian Byrne MP
Rt Hon Sir George Howarth MP
Angus MacNeil MP
Stuart McDonald MP
John McNally MP
Grahame Morris MP
Kate Osborne MP
Bell Ribeiro-Addy MP
Sarah Olney MP
Andy Slaughter MP
Gareth Thomas MP
Richard Thomson MP
Claudia Webbe MP
Derek Twigg MP
Baroness Hooper CMG
Rt Hon. the Baroness Blackstone
Lord Rennard MBE
Baroness Healy of Primrose Hill
Baroness Brown of Cambridge DBE FREng FRS
Baroness Hussein-Ece OBE
Rt Hon. the Lord Browne of Ladyton
Baroness Watkins of Tavistock
Rt Hon. the Lord McNally,
Baroness Ritchie of Downpatrick
Rt Rev. the Lord Bishop of St Albans
Baroness Bryan of Partick
Baroness Lister of Burtersett CBE
Baroness Jones of Moulsecoomb
Rt Hon. the Baroness Royall of Blaisdon
Rt Hon. the Baroness Armstrong of Hill Top
Rt Hon. the Lord Dholakia OBE DL
Baroness Thomas of Winchester MBE
Baroness Bennett of Manor Castle
Lord Hendy QC
Rt Rev. the Lord Bishop of Durham
Lord Hastings of Scarisbrick CBE
Rt Hon. the Lord Tyler
Lord Shipley OBE
Rt Hon. the Baroness Hayman GBE
Lord Loomba CBE
Rt Hon. the Lord Pendry
Rt Rev. the Lord Bishop of Rochester