The international financial system is failing to address the severe debt crisis afflicting developing countries, which has become a major human rights emergency, according to Olivier De Schutter, the UN Special Rapporteur on extreme poverty and human rights.
In a statement marking the International Day for the Eradication of Poverty, De Schutter highlighted the devastating impact of the debt crisis on millions of people.
“The debt crisis is not just a fiscal issue; it is a full-blown human rights crisis,” De Schutter said.
He described how people in the world’s poorest nations are struggling to access necessities like food, healthcare, and education, while their governments are burdened with debt repayments to wealthy creditors.
De Schutter also noted that many of the most debt-affected countries are those most vulnerable to the effects of climate change, but they are being forced to prioritize debt servicing over addressing climate-related challenges.
The debt crisis has been exacerbated by rising interest rates since the COVID-19 pandemic, pushing countries in the Global South further into financial instability.
In 2023, 54 developing countries spent 10% or more of their government revenue on interest payments, leaving limited funds for essential public services such as education and social protection.
The UN expert pointed out the disparity in borrowing costs, with African countries facing interest rates almost four times higher than those of the United States, despite the significant debt levels of wealthier nations.
“This perverse scenario has been playing out in the Global South for years, accelerating the free-fall into poverty seen since the pandemic,” De Schutter remarked, criticizing the insufficient response from international creditors and the ineffectiveness of the G20’s 2020 “Common Framework” for debt restructuring.
De Schutter called for urgent debt relief for countries in crisis and a comprehensive overhaul of the international financial system to prioritize human rights.
He emphasized the role of private creditors, such as banks and hedge funds, in sovereign debt and urged governments to mandate their participation in debt relief efforts.
“It is abhorrent that debt repayments to the world’s richest corporations are being paid at the expense of children’s education or healthcare,” he said.
The Special Rapporteur also criticized the conditions imposed by international financing institutions (IFIs) on bailout packages, including demands for austerity measures and asset sales, which he argued hinder countries’ ability to fulfil their human rights obligations.
He highlighted Pakistan’s recent agreement to its 24th bailout from the International Monetary Fund, which involved what the Prime Minister described as “conditions beyond imagination.”
“The solution to the debt crisis is neither to stimulate economic growth at all costs nor to impose austerity policies.
“It is to cancel or restructure debt and to focus on public investment, particularly in social protection, that will restore the prospect of long-term prosperity,” De Schutter concluded, calling for reforms in line with the goals of the newly adopted Pact of the Future.
All rights reserved. This material and other digital content on this website may not be reproduced, published, broadcast, rewritten, or redistributed in whole or in part without the prior express written permission of THE NEWS ACCELERATOR NETWORK.
For advertising inquiries, news coverage, or press releases, contact thenewsacceleratornetwork@gmail.com or 08022717838, 08033599492.
Post a Comment