APMDD stresses calls for debt cancellation in UN meeting as part of “system-changing” solutions to COVID and multiple crises
Philippines (30 March 2021) -- “The multiple crisis has indeed imbued a much greater urgency to address the debt problem that so many countries have been grappling with for decades. It is a problem that past debt relief measures have failed to solve and present measures are also failing… The debt problem must be understood more broadly, deeply and sharply”.
APMDD Coordinator Lidy Nacpil delivered the intervention at a UN High Level Event on International Debt Architecture and Liquidity held March 29 that aimed to address debt vulnerability as an issue of “sustainability” or capacity to pay.
Nacpil stressed however, that the debt problem is "more than just a problem of liquidity and insolvency". She noted that the “tiny relief that is the temporary suspension of bilateral debt payments for too few countries” will not solve a systemic and structural problem.
"She underscored the need for more ambitious actions in the face of multiple global crises of health, economies and climate change. The impacts today and in the coming years have especially been “horrific for women, for people of color, for indigenous peoples, migrants, farmers, workers and others who have had to grapple with additional layers of oppression”.
"In closing, she raised the issue of the illegitimacy of debt, which brought upon peoples of the South greater vulnerabilities to the multiple crises and bigger threats to their survival. “A bigger historical, social and ecological debt is actually owed to peoples of developing countries, which is so much larger than the financial debts we are being made to pay. This debt owed to us has been accumulated through decades of exploitation of our natural resources, our labor, and our economies, and this continues today.”
Civil Society meets with UN DepSec on Debt Architecture and Liquidity
In an earlier event leading to the HLE, civil society met last March 23 with the UN Deputy Secretary General Amina Mohammed and member states. The UN official noted that “the world has failed to reach the global solidarity needed” as policy makers had been focusing on short-term and national-level solutions rather than on the “systemic flaws” of the international debt architecture and its thorough reforms. Members states in attendance called for the participation of all creditors in addressing the debt sustainability problem, and in establishing a sovereign debt restructuring mechanism.
Lidy Nacpil reiterated the impacts of the multiple global health, economic and climate crises as “poverty, economic injustice and inequalities are much worse especially for women, people of color, indigenous peoples, migrants, farmers, workers, and other who have had to grapple with additional layers of oppression.”
The multiple crises, she added, underscore the need for decisively addressing the debt problem that for decades has plagued many countries of the South as well as of the North and that which past and present debt relief measures have failed to resolve.
Other CSO leaders then took the floor to advocate for moving away from false solutions.
Jason Braganza of African Forum and Network on Debt and Development - AFRODAD urged seizing the opportunity “to overhaul the inequalities that places profits before people and undermines the fundamental rights of all citizens” as 30 million Africans were pushed to extreme poverty in 2020, and women and female-headed households representing a large proportion of the newly poor due to COVID-19.
Patricia Miranda of LATINDAD pointed out that “the crisis did not start with COVID-19; the pandemic only exacerbated the failures of our current system,” and that there is a need to have bold and ambitious solutions to respond to the multiple crises instead of false solutions such as the Debt Service Suspension Initiative (DSSI) and the Common Framework for Debt Treatments Beyond the DSSI.
Speaking on behalf of the Civil Society Financing for Development Group (CS FfD Group), Iolanda Fresnillo of Eurodad (European Network on Debt and Development) noted the inadequacies of the current financial system. “The G20 and IFI responses to the debt crisis have been short- term, limited, and for us they are no more than false solutions,” Fresnillo said. She reiterated the need for “a multilateral debt resolution framework, systemic, long-term solutions, and debt architecture reforms based on human rights and democratic principles.”
In closing, Mahmoud Mohieldin, UN Special Envoy on Financing the 2030 Agenda for Sustainable Development, reiterated UN Deputy Secretary Mohammed’s words to “continue to apply pressure at the global, regional, national and local levels to push policymakers to be more ambitious and to address the root causes of these problems rather than providing piecemeal solutions,” he said. There is a need to transform the international debt architecture to ensure that developing and developed countries emerge from this crisis in an equal footing.”
Read Lidy Nacpil’s full intervention the March 29 High Level Event below:
Your excellencies, UN Secretary General and other officials, heads of states, ministers and representatives of member states, and colleagues from civil society across the world. Warm greetings from the Philippines.
The multiple crisis has indeed imbued a much greater urgency to address the debt problem that so many countries have been grappling with for decades. It is a problem that past debt relief measures have failed to solve and present measures are also failing.
The debt problem must be understood more broadly, deeply, and sharply. It is more than just a problem of liquidity and insolvency or sustainability of payments. We cannot just settle for the grossly inadequate relief that is the temporary suspension of bilateral debt payments or even the cancellation of a few months of debt service both for too few countries. We cannot accept false solutions that improve the books but do not break the cycle of indebtedness. We warn that the fiscal responses in the form of massive lending only further aggravate our debt problem, and we actively oppose lending and borrowing for projects that pose grave harm to communities, to people, and to the planet.
We reiterate our calls for bolder, wider, and system-changing solutions to make it possible to survive and win the fight against COVID-19, against economic, social, racial, and gender injustice and inequality, and the climate crisis. And the solutions include: first, immediate debt cancellation by all lenders public and private for all countries in need including middle income countries; second, a transparent, democratic, inclusive international debt workout mechanism that will cover unsustainable as well as illegitimate debt, and pave the way for debt restructuring and debt cancellation as well as for responsible and fair lending and borrowing policies and practices; and yes, we need profound changes in global and national economic and financial systems that will enable us to build forward to new systems that are truly just, equitable, and ecologically sustainable.
Finally, we issue a reminder that a bigger historical, social and ecological debt is actually owed to peoples of developing countries, which is so much larger than the financial debts we are being made to pay. This debt owed to us has been accumulated through decades of exploitation of our natural resources, our labor, and our economies, and this continues today.
Thank you and a good evening to all.
Links to the March 29 High Level Event and the March 23 Civil Society Meeting on International Debt Architecture and Liquidity