Earlier this month, Jon Cruddas MP for Dagenham and Rainham added his name to a cross party campaign urging the Chancellor to ensure countries that are suffering from the economic fallout of Covid-19 pandemic are given the full debt cancellation they need to survive, recover and rebuild from this crisis.
Before the coronavirus began, 64 developing countries were already spending more on debt payments to other governments or institutions than they were on their own countries’ healthcare. Now, across the world, low and middle- income countries have felt their already existing financial hardships exacerbate due to the adversities the Covid-19 crisis has created.
Jon called for the Chancellor to address this worrying financial outlook at the G20 finance ministers meeting. The quickest way to address these issues and keep money in developing countries is by cancelling debt payments. The UK Government has taken some welcome steps so far, such as suspending debt payments due to other governments in 2020 from the 77 poorest nations- saving an estimated $12 billion.
Jon Cruddas MP has argued that these steps do not go far enough. Suspending debt payments is only a temporary solution. Therefore Jon supports the notion that developing countries must have their debt payments to all creditors (bilateral, multilateral and private) cancelled immediately.
The Chancellor did not enact on the recommendations. Discussion and decisions on further debt suspension, permanent debt reductions, and extensions of debt relief have been pushed back to take place in meetings later this year.
Jon Cruddas MP said: “this is a global crisis and requires a global response. Over the last few months we have seen what collaboration and neighbourliness can achieve across our local communities, people coming together to support the most vulnerable in our society. I urged the Chancellor to extend this support to vulnerable nations by calling for global debt cancellation at the G20 finance meeting, helping them weather the economic struggles that are anticipated in the fallout of Covid-19. On this occasion the Chancellor did not adopt the suggestions but I hope that in the coming months this will form part of the recovery discussions.”