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Covid has wreaked havoc on the Global South: the government must cancel debt to allow for countries to recover

Empty streets in Cape Town, South Africa during the Covid 19 lockdown | Alamy

3 min read

Developing countries are facing a “looming financial tsunami” due to the impact of Covid-19. That is why the International Development Committee has recently called on the government to cancel debt so the Global South has the means to recover from this horrific pandemic.

Earlier this year we published our report considering the secondary impacts of Covid-19. Although the pandemic is sweeping the world, with regular updates on cases and deaths by country, very little is being said about the more significant damage the virus is causing to the Global South. For developed nations, Covid-19 is the worst thing to have happened in decades. For developing nations, it is considered a crises on top of other crises.

Covid-19 is wreaking havoc on already fragile healthcare systems, with some hospitals and facilities on the brink of collapse. Last year, 70 per cent of countries reported disruption to routine immunisation programmes such as measles, polio and diphtheria, and 11.5 million people were affected by disruptions to anti-retroviral services for HIV/AIDS between April and June last year. Yet despite this, the government has rejected our calls for a Global Health Strategy, running the risk that healthcare progress stalling every time a new pandemic comes along.

African governments are expected to pay $23.4bn in debt repayments to private lenders alone this year

It is also abundantly clear that progress on gender equality is stalling. The pandemic and associated lockdowns are having a gendered impact, with a steep rise in unpaid care work by women and girls. With school closures all around the world, we heard how girls are less likely to return to school than boys when they do eventually reopen. We were deeply shocked and saddened to hear that there could be an additional 31 million cases of gender-based violence. This government needs to do more to tackle this shadow pandemic, particularly as championing the rights of women and girls appears to be a key priority of the Prime Minister. 

Furthermore, the World Health Organisation (WHO) suggests that almost half of the global workforce of 3.3 billion people could lose their jobs. This inevitably has an impact on families being able to feed themselves. Last year, we heard a heart-breaking account that in Yemen, 14 million people were unsure where their next meal is coming from. It astounds me that we shared this with the government and they still went ahead and reduced aid to Yemen by 60 per cent.

Addressing these impacts of Covid-19 can be helped significantly if debt is cancelled for lower-income countries, rather than simply offering “debt relief”. As of April last year, we heard that $33bn was still being paid by struggling governments, and if they default on their loans, they could be sued. More specifically, African governments are expected to pay $23.4bn in debt repayments to private lenders alone this year.

In the government’s response to our report, it was promising news that it is open to reviewing the cancellation of debt for poorer countries. However, if this succeeds or not is yet to be seen. The government has confirmed that this will be considered on a case-by-case basis, and in coordination with the World Bank and the IMF. No doubt the ensuing bureaucratic hoops will limit the ability to cancel this debt.

For far too long developing countries have struggled to afford effective public services and to have the means to respond and adapt to crises. Cancelling debt will make a huge difference, and allow countries to get on and help vulnerable groups recover from this ghastly pandemic.


Sarah Champion MP is Labour MP for Rotheram and chair of the International Development Select Committee


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