Don’t forget to drop the debt

Now is the perfect time to highlight and confront the systems of neocolonial exploitation of developing countries by unjust loans — and we can fight the fight here in Britain, writes KEN LIVINGSTONE

THE international coronavirus pandemic has shown more than ever how both in society here in Britain and in terms of different countries and continents all over the globe, we are more intertwined that ever.

In this situation, there are two possible responses. Either both societies and international relations come out of this crisis with the values of solidarity and humanitarianism strengthened.

Or we see a new strengthening of the politics of Trump, the Brazilian far-right President Bolsonaro and others triumph, a politics that is prepared to sacrifice the health and lives of the poorest around the globe for future mega-profits for the 1 per cent.

One issue that has come to the fore during this crisis internationally, has been that of the vast amounts of debt low-income countries around the world “owe” to the big (often formerly colonial) powers, including through global institutions such as the IMF and the World Bank.

The crisis has exposed the economic fragility of countries that carry high levels of unfair and unjust debts.

To give one important example, countries shouldn’t have to choose between paying debts and funding healthcare. Yet recent research showed that prior to the coronavirus crisis 64 countries spent more on external debt payments than health.

Countries with the widest disparities between debt payments and health spending include Gambia, Ghana, Zambia, Laos, Lebanon and Pakistan.

For these countries, there was some much-needed news on the issue of debt last month.

Following calls from over 200 organisations and 750,000 people around the world — including the long-standing Jubilee Debt campaign here in Britain — for debt cancellation to help lower-income countries cope with the Covid-19 pandemic, G20 and IMF announcements saw the suspension of over $12billion in debt payment.

Nonetheless, it’s important to understand that there’s still a long way to go and we must keep up the pressure on this issue relentlessly in the months ahead, as part of our arguing that all over the world people must come before private profit, during and after the global coronavirus crisis.

As the Jubilee Debt campaign said in its response, this amount is “a drop in the ocean compared to the total amounts of debt cancellation that’s needed.”

It estimates that debt cancellation of up to $300 billion is needed by middle- and low-income countries to help fight coronavirus over the coming year.

It is a particularly important issue for us to be campaigning on here in Britain, as recent figures show that 90 per cent of the bonds on which the G20 has called for a debt suspension are governed by English law.

Jubilee Debt and other campaigners are therefore calling for British legislation to be passed to protect any countries from being sued if they do implement the suspension requested by the G20.

More generally, what is needed going forward are real structural changes to the system.

These changes are needed to ensure that countries are also able to reconstruct after the health, economic and social crises caused by this pandemic — which in many countries is already creating the worst economic downturn since the Great Depression with worse to come — is over.

Along these lines, in addition to calls for debt relief, the ITUC has also issued a global labour-movement call for co-ordinated action on public health and economic stimulus, saying there is a need for a global reconstruction plan, which “should reflect the need for complete solidarity to rebuild a sustainable world with quality jobs, universal social protection and strong public-health system.”

This is the right approach, rather than another wave of austerity as soon as next year — which some in the IMF and US are said to advising developing countries to get ready for.

This means rather than just suspending debt — which could potentially lead an even bigger debt crisis in the future as countries will continue to pile up interest — it should be cancelled.

In so many ways, the current crisis has shown that not only is another world possible, but it is absolutely necessary. We need a new economic order to put people, health and the planet first.

Originally published in The Morning Star