Poorer countries spend five times more on debt than climate crisis – report

    29
    0

    Poorer countries spend five times more on debt than climate crisis – report

    Climate crisis

    Poorer countries spend five times more on debt than climate crisis – report

    Charity says lower income countries handing over billions of dollars in debt is impeding their ability to tackle crisis

    Young people holds up banners as they take part in a climate march in Wakiso, Uganda. The Jubilee Debt Campaign said poorer countries will be raising the impact of debt at the meeting.

    Borrowers expected interest rates to fall over time as they became trusted to make regular repayments. But low income countries still regularly pay more than 10% interest on loans compared to an average 1.5 to 2.5% paid by rich countries.

    During the pandemic, the IMF has provided insurance to lower a proportion of the debt interest paid by low income countries, though the scheme does not cover funds owed to China.

    The charity said it checked the debt payments of 34 countries and budget commitments supplied to the United Nations Framework Convention on Climate Change that show plans illustrating what they expect to spend if they receive international funding and what they will invest from their own domestic resources.

    The report said the figures are likely to overestimate expenditure on climate change adaptation, saying: “just because a country has said it plans to spend money on climate change adaptation, doesn’t mean that it has”.

    Ausi Kibowa, from the Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI), based in Uganda, said: “Owing to the immense financial pressure on Uganda from the debt crisis, the Ugandan government is unable to spend what is need to protect people from the damage inflicted by climate change.

    “Furthermore, it is intensifying fossil fuel extraction in order to pay the debt. To address climate injustice, debt relief must be part of the forthcoming UN climate talks.”

    Rich countries were expected to provide funding worth $100bn a year to developing countries to help deal with and limit climate change. The commitment was made at the UN climate talks in Copenhagen in 2009.

    Earlier this week, Alok Sharma, the UK cabinet minister who will preside over Cop26, said the target will be met in 2023.

    However, Jubilee Debt Campaign said that of the climate finance given so far, over two-thirds is loans, “further increasing the debt crisis in lower income countries”.

    Former Maldives president Mohamed Nasheed, representing the Climate Vulnerable Forum of 48 countries that are home to a billion people, said many countries were becoming overwhelmed by their foreign debts.

    “We are so threatened that we might not have an island or a country much longer, so it’s hardly possible for us to pay the debt if we are not around. Is it not then reasonable for climate vulnerable countries to call upon debt holders to restructure their debt?”

    Topics

    • Climate crisis
    • Cop26
    • Trade and development
    • Global economy
    • World Bank
    • International Monetary Fund (IMF)
    • ” target=”_blank” rel=”noreferrer” data-ignore=”global-link-styling”>
    Reuse this content

    Published at Wed, 27 Oct 2021 05:00:22 +0000

    Attribution – For more Information here is the Article Post Source: https://www.theguardian.com/environment/2021/oct/27/poorer-countries-spend-five-times-more-on-debt-than-climate-crisis-report

    Previous articleRSBN Presents Praying for America with Father Frank Pavone 10/26/21
    Next articleWho is Spanx CEO Sara Blakely and How Much is Her Company Worth?