Credit: Asian Peoples’ Movement on Debt and Development (APMDD)
By Ben Phillips
BANGKOK, Thailand, Jan 9 2025 (IPS)
The debt disaster is back. Indeed, the aid agency Cafod reports that developing countries today face “the most acute debt crisis in history”.
At least 54 countries are in a debt crisis – more than double the number in 2010. A further 57 countries are at risk of debt crisis. In the past decade, interest payments for developing countries overall have risen by 64%, and for Africa by 132%.
African countries are paying over 100 billion dollars a year to creditors. The share of African countries’ budgets going on debt payments is four times higher than in 2010.
Net finance flows to developing countries are now negative – that is, debt service repayments are now higher than inflows to governments.
“It’s time to face the reality,” says World Bank Chief Economist Indermit Gill. “The poorest countries facing debt distress need debt relief if they are to have a shot at lasting prosperity. Private creditors ought to bear a fair share of the cost when the bet goes bad.”
“Debt is choking the countries of the Global South,” says the Anglican Archbishop of Cape Town Thabo Makgoba, “denying us what we need for health and education. Please, let us breathe!”
The scale of the crisis has not shocked world leaders into action, however. So far, the G20 debt restructuring mechanisms have come nowhere close to what is needed.
The recurrence of the debt crisis is even cynically held up as a reason not to resolve it. “They got debt forgiven in 2000,” goes the mantra, “now they are back, which means it failed and there is no helping them.”
It’s a false narrative that deliberately ignores two key points: first, that the debt cancellation secured by the broad Jubilee 2000 movement saved and transformed millions of lives, including affected countries switching from most children not completing primary school to most children completing; secondly, that the reforms needed to prevent a recurrence of catastrophic debt payment levels have been held up by creditors.
But being untrue hasn’t taken away the power of the “debt cancellation failed” story for excusing and enabling inaction.
Debt restructuring has continued to be a painfully slow, ad hoc process, dominated by rich countries and dependent on persuading creditors. That’s not a bug, it’s feature. It’s not surprising that private lenders, who today make up the largest share of creditors of affected countries’ debt, have obstructed efforts to resolve the crisis: without sufficient compulsion that is what they will continue to do.
It seems almost unnecessary to add that we have now entered an era where anything requiring multilateral cooperation has gotten even harder. And yet, 2025 also brings two powerful reasons for hope.
First, the moment.
As the first ever African chair of the G20, South Africa has seized the opportunity to lead an intergovernmental push for action on debt, successfully bringing it to the core of global economic diplomacy. The South African G20 presidency has set out a bold agenda that prioritises tackling what they name in frank terms as the “crippling sovereign debt levels that force many countries to sacrifice their developmental obligations to service unmanageable debts”.
South Africa has set out what would be transformative frame for G20 delivery: “We must take action to ensure debt sustainability for low-income countries. A key obstacle to inclusive growth in developing economies is an unsustainable level of debt which limits their ability to invest in infrastructure, healthcare, education and other development needs”.
“South Africa will seek to advance sustainable solutions to tackle high structural deficits and liquidity challenges and extend debt relief to developing economies. South Africa will also seek to ensure that the sovereign credit ratings are fair and transparent and to address high risk premiums for developing economies. Key to addressing the debt question is dealing with the Cost of Capital.”
Second, the movement.
Intergovernmental diplomacy alone, however well played, can never break through the power imbalances of global finance. The resolution of the debt crisis needs a determined and organized mass movement of people. This movement is rising.
Amongst those who are coming together in the broad Jubilee 2025 movement are civil society organisations from climate justice marchers to human rights activists, trade unions from every sector and every part of the world, and artists raising their voices to demand the breaking of the chokehold of debt.
At the heart of the Jubilee 2025 movement are the faith communities, who were also at the heart of Jubilee 2000. As the Jubilee name signifies, debt cancellation is not a mere technical economic issue, it is a moral one, with deep roots in biblical traditions and in ethical understandings of the common good.
“We urgently need a new debt Jubilee,” leaders of diverse faiths from across Africa declared in their joint call to action, “to bring hope to humankind, and bring the planet back from the brink.” Faith communities combine deep local organising and wide global networking, mobilise in the Global South and Global North amongst the most excluded and amongst the better off, and have proven to be especially hard for decision-makers to ignore.
A moment of hope, powered by a movement of hope. Debt distress need not be destiny. This is not a prediction that the campaign on debt will succeed, but rather an assessment that it has a fighting chance. “More than a question of generosity,” Pope Francis declared in his Papal Bull for 2025, debt cancellation is “a matter of justice.”
Notably, he titled the document Spes non confundit – “Hope does not disappoint.”
Ben Phillips is the author of How to Fight Inequality.
IPS UN Bureau
Follow @IPSNewsUNBureau
Written by Etienne Bassot.
The ninth edition of this annual publication presents 10 issues to watch in 2025, selected by the Members’ Research Service of the European Parliament. Some of these issues feature high on the 2025 European political agenda as they reflect the three pillars of the ‘competitiveness compass’ that the von der Leyen II Commission has identified for its 2024-2029 mandate: balancing scale with innovation for productivity, setting the 2040 climate target, and taking the next steps towards European economic security. Other subjects are more specific, such as waiting to move up a gear: European electric cars, and helping the EU compete on artificial intelligence. For some issues, progress has long been too slow and new impetus is needed: strengthening the European defence industry, and speeding up the return of irregular migrants. All these issues, as well as other issues beyond this list of 10, require financial means and investment, which in turn raises the additional challenge of shaping the EU’s future finances and strengthening capacity to invest in the future. The overarching issue of restoring trust in the public sphere – in traditional news media, social media, governments and institutions, and business – meanwhile affects all of the above.
As a new political cycle begins for the European institutions, with the latest mandates having started on 1 December 2024, this list of issues could seem daunting. Alternatively, they can be seen as a list of new opportunities for the European Union to assert itself, bounce back, and move ahead.
History teaches that it has been when under the pressure of events that the European Union (EU) has made most progress. It is already becoming clear how Russia’s war on Ukraine and changes in transatlantic relations have made the EU move ahead on security and defence. The challenges that are accumulating are the very same that offer the EU a chance to get stronger and assert itself on the world stage. These issues demand choices; they also offer opportunities. The European Parliament, as the place for debate among directly elected members and as co-legislator, will have an important role to play when it comes to deciding on the EU’s future course. The year 2025 will be a year of decisions – a theme that runs through this publication – as illustrated by its cover image.
These choices – these decisions – call for independent, objective and authoritative information: the motto of the European Parliamentary Research Service. EPRS publications rely on research, robust facts and figures, and informed analysis to provide the European Parliament’s Members with the elements they need to do their work, and ultimately build the trust that must underpin any democracy.
Readers will find analysis on issues that do not feature on this list of 10 in previous editions of this publication (listed under the ‘Further reading section’) and in the thousands of publications that EPRS has issued online and in paper over the years, enriching Parliament’s knowledge environment.
We hope that you will find this latest edition of ‘Ten Issues to watch’ informative and useful as you consider the challenges and opportunities of 2025.
Read the complete in-depth analysis on ‘Ten issues to watch in 2025‘ in the Think Tank pages of the European Parliament.
Events that will shape 2025C'est la fin d'une longue odyssée. La Bulgarie et la Roumanie ont pleinement rejoint l'epace Schengen le 1er janvier, 18 ans après leur entrée dans l'Union européenne. L'économie bulgare espère en tirer profit, à commencer par les transporteurs routiers.
- Articles / Relations régionales, Une - Diaporama, Courrier des Balkans, Libéralisation des visas, Une - Diaporama - En premier, Questions européennes, Economie, BulgarieLa Macédoine du Nord sera-t-elle le premier pays des Balkans à émettre une monnaie électronique, des denars numériques, comme mode de paiement sécurisé ? L'objectif affiché est de mettre un frein à la corruption.
- Le fil de l'Info / Une - Diaporama, Economie, Radio Slobodna Evropa, Macédoine du NordLa Macédoine du Nord sera-t-elle le premier pays des Balkans à émettre une monnaie électronique, des denars numériques, comme mode de paiement sécurisé ? L'objectif affiché est de mettre un frein à la corruption.
- Le fil de l'Info / Une - Diaporama, Economie, Radio Slobodna Evropa, Macédoine du Nord