Executive Director of the Charitable Organization Jubilee Debt Campaign Heidi Chow called on rich countries to forgive debt poor to save the planet, reports Guardian.
According to Jubilee Debt Campaign, 34 The poorest countries of the world spend 29.4 billion dollars a year on debt repayment, compared to $ 5.4 billion to eliminate climate change consequences and reduce carbon emissions. “Low-income countries transfer billions of dollars to repay debt to rich countries, banks and international financial institutions at the time, resources need to combat climate crisis,” said Chow.
She noted that the pressure of external debts of low-income countries to the ability to solve climate problems will be intensified. According to Jubilee Debt Campaign, by 2025, 34 the poorest countries will spend seven times more on debt payment than to combat climate change. Chow believes that at the COP26 summit in Glasgow rich countries as the main environmental pollutants must stop shy away from their obligations and provide funding to combat climate change through grants.
The representative of the Institute of Commercial Information and Negotiations of South and Eastern Africa (Seatini) in Uganda Ausi Kibov noted that the write-off of the debt of poor countries should be part of COP26. “Because of the huge financial pressure on Uganda caused by the debt crisis, the government cannot spend the necessary means to protect people from damage caused by climate change,” Kibov said.
Over the past 20 years, international organizations, including the World Bank and the International Monetary Fund (IMF), supported funding for the development of poor countries by bank loans and bonds. Borrowers expected the interest rate with time will fall, but it is still 10 percent for poor countries, compared with 1.5-2.5 percent for the rich.
At the COP15 summit in 2009, in Copenhagen, rich countries pledged to provide funding to combat the consequences of climate change to developing countries in the amount of $ 100 billion a year. In October, the head of the COP26, the British Minister of International Development Alok Sharm stated that the obligations would be fulfilled in 2023. However, according to Jubilee Debt Campaign, from the current financing of more than two thirds of the loan, which further exacerbates the debt crisis in low-income countries.
In 2020, poor countries increased by 12 percent and reached a record 860 billion dollars. The growth of debts is associated with stimulating economic policies of states during the coronavirus pandemic. The chief economist of World Bank Carmen Rainhart said that the problems faced by countries with large debts may be aggravated. Because of the coronavirus pandemic, world debt size in the second quarter of 2021 reached a record level of 296 trillion dollars.