Developing countries are facing the worst debt crisis in history with almost half their budgets being spent on paying back their creditors, a study has found., prepared by the campaign group Debt Relief International for Norwegian Church Aid, says more than 100 countries are struggling to service their debts – resulting in them cutting back on investment in health, education, social protection and climate change measures.
In 2020 the G20 group of leading developed and developing countries launched the Common Framework – a scheme designed to speed up and simplify the debt relief process. However, progress has been much slower than hoped, reflecting the fact that much poor country debt is now owed to China and private bondholders.
Matthew Martin, one of the report’s authors, called on the new government to legislate to prevent vulture funds – funds that buy up debt cheaply and then seek to make a profit on it – from using the UK courts to sue poor countries.