The Covid 19 crisis has clearly shown the importance of stable, well-equipped health and social systems. But public services need to be financed. And financing has been difficult for many highly indebted countries - even before the pandemic. A World Bank study revealed already in 2019 that the current “global wave of debt” is unprecedented in its size, speed and scope, especially in emerging and developing countries. 46 out of 76 low-income countries spend four times more on debt service than on their public health care systems. But also heavily indebted developing countries with higher income, like Pakistan, struggle when coping with the pandemic. Pakistan’s Prime Minister Imran Khan has therefore suggested a “global initiative for debt relief”.
In mid-April this year, the G20 decided to defer debt repayments on bilateral loans of 77 countries of the Global South until the end of the year. Will this moratorium solve the problem? An increase in government revenues to pay back debts and tackle the economic and health crisis cannot be expected any time soon. Capital flight, lower investment levels and tax evasion, as well as falling world market prices for important export commodities might cause deep budget cuts.
How many countries are currently in debt distress? What is the impact of the debt crisis on health and other public services during the Covid-19 pandemic? How can heavily indebted countries, like Pakistan, be supported?
works for Jubilee Germany, a debt and development coalition of 600 organisations promoting debt justice. She is responsible for Jubilee’s management as well as networking and specialised on research and advocacy on debt in Sub-Saharan Africa. Kristina is also a member of the board of the European Network on Debt and Development in Brussels. She studied Global Development Management as well as Cultural Studies, with a focus on sociology.
Syed Abdul Khaliq
is a debt justice and human rights activist in Pakistan and founder and director of the Institute for Social and Economic Justice (ISEJ) in Pakistan. He cooperated with Oxfam Novib and the International Labour Organisation in Pakistan. He is also the contact for the Campaign for Abolition of Illegitimate Debts (CADTM) in Pakistan. Syed Abdul Khaliq studied English Literature and Law.
is Assistant General Secretary of Public Services International (PSI), a global trade union federation with 670 affiliates who represent 30 million public service workers in 163 countries. PSI defends public sector workers’ rights and promote quality public services. It works with the United Nations system and in partnership with labour, civil society and other organisations. Daniel has worked in the union movement for 15 years and currently manages policy, advocacy and research and leads PSI's work on trade, tax, debt and future of quality public services. Daniel is currently the Co-Chair of the Steering Committee of the ICRICT, member of the Global Reporting Initiatives (GRI) Tax Technical Committee and Chair of the Governing Committee of the Centre for International Corporate Tax and Research (CICTAR).