Emerging countries are paying record amounts for debt - experts are calling for comprehensive debt relief

Emerging countries are paying record amounts for debt - experts are calling for comprehensive debt relief

According to a recent report, developing and emerging countries face the highest levels of debt service. According to this year's debt report by Misereor and erlassjahr.de, indebted countries from the Global South pay more than a billion US dollars per day to foreign creditors. Of the 152 countries examined worldwide, 130 are at least slightly critically indebted, with 45 countries spending more than 15 percent of government revenue on debt service.

The report reveals that over 3.3 billion people live in countries that spend more on debt payments than on education and health. Before the COVID-19 pandemic, 37 percent of the countries surveyed were in a critical or very critical debt situation, compared to 55 percent now. Misereor expert Klaus Schilder emphasizes that comprehensive debt relief represents a possible solution to overcome the debt crisis.

The political coordinator of erlassjahr.de, Kristina Rehbein, takes a look at the importance of human rights aspects in debtor countries instead of the pure profit interests of creditors. In addition, the federal government is called upon to take measures to include private creditors in debt relief and to promote debt relief as a means of strengthening climate protection financing.

Development Minister Svenja Schulze warns of the effects of excessive indebtedness on the stability of the global economy and calls for quick and sustainable solutions. China is named as the largest state creditor of poor countries, although the involvement of private creditors should also be strengthened. Despite a slight improvement in the debt situation in some countries, the debt situation is expected to remain tight without relief or reductions, especially given slower economic growth following the pandemic.