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Tuesday, 30 January 2024 15:47

TFC IMFThe Task Force on Climate, Development and the IMF, hosted by the GDP Center of Boston University, organised a seminar on how to integrate climate change into the IMF/World Bank Low Income Countries’ Debt Sustainability Framework, which is due to be reviewed during 2024-25. Matthew Martin spoke on practical experiences of integrating climate change into the SRDSF for Market Accessing Countries, and implications for the LIC-DSF, as analysed in a forthcoming paper for Friedrich Ebert Stiftung New York and Jubilee USA. He emphasised that while the SRDSF integration has been a major step forward, there are some major problems with it, notably its application to too few countries, underestimation of potential adaptation and mitigation costs. Insufficient emphasis given to debt service crowding out climate spend, and its omission of the potential positive multiplier effects on growth and budget revenue of Just Green Transition spending. If these problems can be fixed it could be replicated in the LIC-DSF. The presentation is available on request from DFI. 

 
Wednesday, 31 January 2024 10:03

ErlassjahrMajor German CSOs held an expert roundtable meeting designed to work out how the German government could be more proactive in bringing all creditors on board to provide comprehensive debt relief – looking in particular at commercial creditors, multilateral creditors and Chinese institutions. For more details on the event, see here. Matthew Martin, Executive Director of DFI, spoke in a panel on how multilateral creditors had successfully provided multilateral debt relief under HIPC and MDRI without damaging their credit ratings, and could do so again without excessive costs to their lending streams or donor funds; and contributed ideas from the successful experiences of the UK government in introducing its “private creditor” vulture fund law in 2009-10, which is being replicated in New York and could be replicated across Europe. More details are available on request from DFI.

 
 
 
Wednesday, 29 November 2023 10:50

Ahead of the COP28 Climate Summit in Dubai, DFI is today launching a new Debt Service Watch briefing which shows that in 2023, spending on debt service will be 12.5 times higher than spending on climate adaptation. In 2024, it will be 13.2 times higher.

Spending needs for climate adaptation in the Global South are up to US$340 billion a year. Yet just a fraction of this is currently being mobilised by domestic public budgets and donor flows. In 2021, just US$24.6 billion was provided in donor flows for climate adaptation, while 42 countries of the Global South reported just US$12.7 billion in domestic funds for climate adaptation. At the same time, debt service levels are at record highs. Broken down by region, in 25 Sub-Saharan African countries, debt service will consume 16 times as much as climate adaptation spending; in six small island developing states, nearly six times; in 4 Asian countries, 22 times; and in 4 Latin American and Caribbean countries, over four times as much.

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Tuesday, 30 January 2024 15:55

Norwegian Church Aid logo enNorwegian Church Aid and SLUG organised a seminar to launch the updated version of the report first produced in 2022, arguing for a Nordic Initiative to resolve the worst ever global debt crisis.  The report is especially timely given that Norway has been invited by Brazil to join the G20 as a Guest during 2024. The updated report shows the global debt crisis is continuing to get worse, especially if measured by the degree to which high debt service is stopping governments from funding crucial spending on education, health, social protection and climate. It makes 10 proposals to resolve the crisis, including basing debt relief on country spending needs for the SDGs by ensuring it reduces debt service to below 15% of budget revenue from year 1; making sure all private, multilateral and domestic creditors participate; introducing laws to protect countries against lawsuits by holdout creditors; maximising transparency and accountability of new lending and debt relief agreements; ending “predatory” new lending and debt restructuring by amending the UN Convention Against Corruption; accompanying debt relief with low-cost new finance, reducing costs of market borrowing by using MDB guarantees; and building a more comprehensive supporting debt architecture, led by the UN. The summary can be found here.

 
 
 
Tuesday, 10 October 2023 18:49

DFI is today launching a new Debt Service Watch briefing which shows that debt service numbers are higher than they have ever been. For 139 borrowers from the World Bank, service is above the levels reached in the HIPC and Latin American debt crises. It equals their total spending on education, health, social protection and climate adaptation combined, and exceeds this spending by half in Africa. This briefing, jointly with AFRODAD, Debt Justice, Erlassjahr, EURODAD, LATINDADD and Norwegian Church Aid, shows that developing countries are in their worst debt crisis ever. Current debt relief deals are leaving countries paying half their budgets on debt service. Much deeper debt cancellation and measures to reduce borrowing costs are essential to rescue the Sustainable Development Goals. For the English version of the briefing, click here. For French, here. For German, here. For Spanish, here. For the underlying summary database in English, here.

 
 
 
Wednesday, 20 September 2023 00:00

UN General AssemblyDFI, Oxfam, NYU-CIC and UNAIDS convened an event at the United Nations General Assembly, co-sponsored by the Governments of Colombia, the Maldives, Namibia, Sierra Leone, and Zambia, and supported by a further 10 UN member states. This followed on from the meeting at Minister and Ambassador level in July. At the event, Heads of Government signed a joint statement urging the UN and the World Bank to change their monitoring to focus on genuine inequality rather than “shared prosperity”, in order for them to accelerate progress on reducing inequality in their own countries and between countries. They also agreed to continue joint work towards this goal at the forthcoming IMF and World Bank Annual Meetings in Marrakech in October, and during the review of SDG Indicators to be conducted by the Inter-Agency Expert Group in 2024.

 
 
 
Friday, 28 July 2023 00:00

International-budget-partnershipGates Foundation for DFI WebsiteDFI has been commissioned by the International Budget Partnership and the Gates Foundation to conduct a scoping study analysing good practice and scope for improvement in the accountability of developing country governments to their domestic stakeholders (parliaments, audit institutions, civil society, media, judiciary) for their debt management policies and practices. Most analysis until now has focussed on transparency, but DFI and IBP share the view that it is essential to go beyond transparency to introduce policies and processes which allow governments to be held accountable. The study will be completed by December 2023 and include 3-5 case studies of good practice, as well as recommendations for a programme of actions to reinforce accountability worldwide.

 
 
 
Tuesday, 11 July 2023 00:00

DFI has drafted a report on Inequality in the Sahel for Oxfam West Africa, which was discussed at a regional inequality multi-stakeholder forum in Ouagadougou. The paper emphasised the close links between growing inequality, climate change and political instability and insecurity in the region, which has also been also confronted by triple crises of COVID-19, debt and austerity. In this context, governments are doing far too little to reduce inequality, with more than 2/3 of the workforce having no labour rights leading to extreme wage inequality; governments spending well below needed amounts on education, health and social protection; and overdependence on unprogressive taxes such as VAT. It recommends a new social contract for the region focussed on enhancing labour rights, more progressive taxation and enhanced social spending.

 
 
 
Tuesday, 11 July 2023 15:15

DFI is co-chairing a Call to Action to Save SDG10 and reduce inequality dramatically across the world, with UNAIDS, Oxfam International, and Pathfinders-CIC at New York University. The partners will be holding an invitation-only lunch with high-level delegates to the United Nations High-Level Political Forum reviewing the SDGs, on 18th July. Please find the concept note for the meeting here, and the policy brief here.

 
 
 
Friday, 28 April 2023 00:00

SDG 10 LOGOAt the IMF and World Bank Spring Meetings in Washington, Winnie Byanyima of UNAIDS and Matthew Martin of DFI co-chaired a meeting to launch a Call to Action on SDG10. This Call will demand a reform of the way the international system monitors inequality, to make it track genuine inequality across all levels of income and wealth, rather than “shared prosperity” between the middle class and the poor. The meeting assembled academic, civil society, church and UN experts, and agreed on a plan of action for 2023-24 to change the monitoring indicators used by the UN in SDG10 (Reducing Inequality) and by the World Bank in its corporate goals and scorecard. The next steps will be to organise an event among UN member states at the UN High Level Political Forum on the SDGs in New York in July 2023.

 
 
 
Friday, 14 October 2022 00:00

Norwegian Church Aid logoDFI and Norwegian Church Aid launched a new report on how to solve the new debt crisis, at the IMF and World Bank Annual Meetings. The report shows that the crisis is widespread, affecting 114 countries, and concentrated in those countries accessing capital markets (not in former HIPCs). Debt service is far higher than spending on education, health, social protection and climate. Debt to domestic and multilateral creditors are key components in many countries, and will need to be restructured. The report analyses in detail the lessons of past debt relief initiatives, and makes 10 sets of recommendations to ensure that debt relief is: provided to all types of countries, based on their SDG financing needs, negotiated rapidly, including all necessary creditors, and providing protection against lawsuits. In addition, it recommends measures to avoid future crises by maximising accountability to domestic stakeholders; protecting against future predatory and corrupt debts; building country negotiating capacity; and providing lower-cost development financing.

 
 
 
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