Urge private banks to cancel debts for developing countries during the pandemic
7 April 2021
Campaigners are urging private banks to cancel debts for developing countries so they don’t have to choose between paying debts and saving lives.
The #CancelTheDebt campaign is calling for banks and speculators to cancel debts owed by some of the world’s poorest countries so they can tackle Covid and rebuild from the coronavirus crisis.
More than 150 million people risk falling into poverty as a result of the pandemic, according to the World Bank.
Debt cancellation needed to save lives
CAFOD, Christian Aid, Jubilee Debt Campaign and Global Justice Now are asking supporters to email the bosses of four banks and financial organisations to urge them to cancel debts as the impact of the pandemic pushes many low-income countries to the limit.
The campaigners say that four private creditors – HSBC, UBS, JP Morgan Chase and Blackrock – must stop demanding loan repayments for any poorer countries that need debt relief. This will help free up money for governments to support communities in light of the crisis cause by the pandemic.
As part of the G20, many wealthy governments have already agreed to a debt relief initiative for poorer countries during the pandemic following campaigning from millions of people across the world, including thousands of CAFOD supporters.
But some banks and speculators have continued to demand full repayment of debts, despite requests from countries such as Zambia and Chad for debt relief.
Countries across Africa are collectively spending three times more on debt repayments to banks and speculators than it would cost to vaccinate the entire continent against Covid-19.
Join Pope Francis’s call for debt cancellation
Pope Francis has repeatedly called for debt relief over the course of the pandemic.
The Pope has warned that debt cancellation is necessary for the most vulnerable countries “in recognition of the severe impacts of the medical, social and economic crises they face as a result of Covid-19” and that debts should not be paid “at the price of unbearable sacrifices”.
New laws needed for debt relief
The #CancelTheDebt campaign groups are also urging the UK government to bring in a new law to tackle the debt crisis in the long-term and prevent big banks from suing developing countries in UK courts if they are unable to repay debts.
Large numbers of debt contracts are governed under English law, giving the UK government an influential role.
Dario Kenner from CAFOD’s Policy Team said:
“Fifty-nine per cent of all debt payments due in Zambia are owed to banks and speculators, yet when Zambia asked for debt relief they were refused.
“The UK can and must pass new laws that will force UK-based companies owning large amounts of Zambia’s debt to agree to debt relief and restructuring, so lower-income countries can recover from the pandemic.”