This year, an election will be called in the UK. It’s a rare opportunity to force debt cancellation onto the political agenda – right as we’re facing the biggest global debt crisis in over twenty years.
54 of the lowest income countries in the world are in debt crisis, just as many are having to deal with the devastating impacts of the climate crisis, such as floods or hurricanes and economic insecurity.
In the words of Ghanaian debt campaigner Bernard Anaba:
“The debt crisis has led to a higher cost of living, escalating food prices, high cost of transportation, high cost of water and electricity, and making life very difficult for people. People barely get two meals a day… lives are being destroyed because of the debt crisis.”
Ghana, in West Africa, has paid over $7 billion in interest alone on debts to western lenders since 2010. In December 2022, facing economic pressure as a result of the pandemic and global economic crisis, Ghana stopped making debt payments to most of its lenders and is now trying to reach agreement with them to cancel enough debt to make it manageable.
An international process that was set up in 2021 to help countries like Ghana reduce their debts has so far failed. Only four countries have applied and only one, Chad, has reached an agreement (which didn’t actually provide any debt cancellation). Part of the reason it’s failed is because there’s no way to push greedy lenders, banks, hedge funds and oil traders, like financial giant BlackRock, or high street bank HSBC to participate.
But there’s a way we can make them play ball. The UK is in a unique position to end this crisis – because 90% of the debts owed by lower income countries to banks, hedge funds and oil traders are overseen by UK law!
It has never been more urgent for us to demand debt cancellation. A new debt justice law would force financial giants to play ball in negotiations, giving lower income countries a route out of the crisis.
What would the new law do?
Right now, countries in crisis are unable to get debt cancelled because private lenders are refusing to agree to the same terms as other lenders, instead holding out for big profits – at the expense of millions of people living in countries in debt crisis.
Because 90% of the debt contracts for lower income countries are overseen by the UK, Parliament could pass a debt justice law that would force private lenders to take part in debt cancellation.
This law could:
- Make sure that no private lender could sue a country for more than they would have got if they had taken part in debt restructuring through existing agreements
- Allow the courts to force private lenders to take part in debt cancellation if other lenders, like governments, have agreed to it.
The other place which governs debt contracts is New York. The New York Assembly is already considering bills that aim to achieve the same outcomes as a debt justice law in the UK. We are working closely with allies in New York to push for reforms that would win justice for all countries in debt crisis.
This would mean that Ghana, and other countries in crisis, would be able to get a debt cancellation deal agreed much faster, and be able to get their economies back on track.
This election – Cancel the Debt
Millions of lives are impacted by debt, but right now, we’ve got a real opportunity to win justice through debt cancellation.
We know an election will be called this year. At a time when politicians will be keen to hear from voters, this is our chance to demand a new law that would deliver debt justice to millions in lower income countries.
It’s crucial thousands of us get involved and add our voices to the campaign.
Add your voice to Bernard’s and thousands of others around the world demanding debt cancellation. Take action today by signing our petition to party leaders, demanding whoever is elected commits to introducing the new debt justice law.