G7 urged to cancel debts as developing countries reel from loan burdens

AS the debt of developing countries like the Philippines continued to increase, civil society organizations (CSOS) called on G7 countries and national governments to cancel debts and repeal automatic debt appropriations.

Freedom from Debt Coalition president Rene Ofreneo said G7 countries should cancel illegitimate debts. Asia’s debts have reached over $1 trillion while the country’s own external debt reached $109.8 billion at the end of March.

Ofreneo stressed the need to repeal the automatic debt appropriation law and called for “an independent, transparent and inclusive citizens debt audit” to weed out illegitimate debts.

“Under the Automatic Appropriations law enacted by the Marcos dictatorship, the Filipino people automatically pay for loan-funded fossil fuel projects that are destroying their environment and for largescale infrastructure projects that are displacing communities and wrecking local livelihoods,” the CSOS said in a statement.

The Asian Peoples’ Movement on Debt and Development (APMDD) Coordinator Lidy Nacpil said many developing country governments spent more on debt service payments to G7 countries “than on peoples’ needs.”

Nacpil added that climate finance for adaptation, mitigation and loss and damage have also been provided largely through loans to G7 countries.

“In truth, rich countries owe us a huge climate debt that is far beyond the pledged $100 billion in climate finance, which remains unfulfilled to this day. Climate change will cost South countries up to $6 trillion by 2030 if rich countries fail to pay their climate debt,” Nacpil said.

APMDD said low- and middleincome countries remain in the grip of the crises intensified by the pandemic, with millions pulled into absolute poverty in only the last two years.

Asian countries alone face $1.23 trillion in public external debts, of which $750 billion is owed to private lenders and $482 billion to official lenders such as the International Monetary Fund, World Bank and other governments.

Nacpil stressed that G7 countries are among the “world’s largest historical and continuing greenhouse gas emitters” and were “principally responsible” for the climate crisis. She said G7 countries should go beyond the $100-billion financing they committed to.

“They must include both direct and indirect financing, must leave no room for loopholes and exceptions, and should translate to a rapid shift of public finance to clean and renewable energy. Further, they should deliver on their full climate finance obligations and fair shares of global climate actions,” Nacpil said.

APMDD protested near the German Embassy in the Philippines on Monday and symbolically repudiated the debts claimed from Asian developing countries.

Protesters ripped a mock foreign debt bill representing Asia’s debt amounting to more than US$1 trillion and the Philippines’s external debt of $109.8 billion as of March 2022.

APMDD members in Indonesia, India, Bangladesh, Pakistan and Nepal also mounted protest actions on Monday, highlighting the demand for debt cancellation amid the economic, health and climate crises faced by their peoples.

APMDD’S coordinated activity joined mobilizations worldwide that are taking place as part of the Days of Action from 24-28 June, which are timed with the ongoing G7 Summit hosted by Germany.