Process
Status Items Output None Questions None Claims None Highlights Done See section below
Highlights
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“Debt is a skillfully managed reconquest of Africa, intended to subjugate its growth and development through foreign rules,” Sankara told the assembled delegates of the Organization of African Unity.
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total debt burden of the developing world at $29 trillion dollars
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UN data shows that fifteen nations spend more on interest payments than they do on education. Meanwhile, forty-six spend more on interest than they do on health.
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for every dollar the IMF encouraged governments to spend on public services, it told them to cut six times as much through austerity measures.
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For developing nations, the upshot of all of this is that as debt burdens grow, they’re forced into belt-tightening austerity to pay back investors. When the debt burden gets too high, they’re forced into an IMF loan, which in turn forces them into more austerity to pay back investors yet again. When a dramatic economic crash follows, the IMF loans may roll over and the terms may get stricter as the IMF becomes a de facto insurance policy and enforcer for private investors.
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Whereas previous global debt relief efforts could write off bilateral debts (that is, country-to-country loans) and get rid of a good chunk of debt for the poorest nations, the debt crisis of 2024 isn’t so simple. Now, most developing-nation debt is held by private creditors who are universally unwilling to sacrifice a cent more than absolutely necessary.
✏️ It’s crazy but I guess not surprising to see that nations are more willing to be forgiving than individual rich people. 🔗 View Highlight
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The UN estimates that 61 percent of outstanding debt across developing nations is in private hands.
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Any number of such mechanisms in virtually any combination would help: reforming the IMF and eliminating the unhinged system of surcharges, changes in credit rating company approaches that raise the cost of debt, and simplifying negotiations for countries in severe debt distress would all benefit the poorest nations. But it’s still not enough. The solutions that would meaningfully change things — a massive debt forgiveness campaign, reparations for centuries of colonization, and a fundamental rewrite of the world’s financial architecture and trade rules — appear laughably far off.