The G7 ducks the challenge of the debt crisis

Over the last few weeks, the attention of the world has been on the leaders of the G7 as they discussed the critical issues we all face, including vaccines, tax reform and the climate crisis. We kept a close eye on the process (a very close eye for some of us – see above), especially given that the UK government has been hosting the discussions this year.

The good news is that the debt crisis in the global South was on the agenda, but were the announcements enough to address the scale of the problem?

The short answer is no.

It was a missed opportunity for the G7, and the UK government in particular, to use its power for good. While they make woefully inadequate statements on global debt without the participation of the global South, governments of poorer countries are faced with ever shrinking resources to address COVID-19, the climate crisis and development goals. People cannot access healthcare or the vaccine, they are witnessing devastating changes to their way of life from the human-made climate crisis, and some face increasingly unaffordable taxes to cover the costs of their governments’ debt.

In the words of Ausi Kibowa, Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI) Uganda,

“The second wave of the Coronavirus pandemic is already taking its toll on the lives of many innocent African citizens as their governments have still failed to secure adequate vaccines for them. Many of these countries need adequate debt relief to free up more resources so as to fight the pandemic. G7 Governments should act now to find tangible ways to support developing countries negotiate debt reductions with private creditors.”

Unfortunately, they did not. Here is our breakdown of the key debt-related takeaways:

The outcome of the G7 meetings on debt were disappointing and represent a failure to address one of the most pressing issues facing the global South. Without debt relief, countries will continue to face crippling debt burdens and see vital resources drained out of their countries and into the hands of global North governments, institutions and corporations. The G7 may be a self-selected club of powerful states making decisions on behalf of the world, but this does not diminish its responsibility to use its illegitimate power to address the debt crisis. The UK has wasted one of its global presidencies of 2021; when we come to the COP26 climate conference, global South countries will be at the table, and will demand action.

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