On the International Day for the Eradication of Poverty, Olivier De Schutter, the UN Special Rapporteur on extreme poverty and human rights, sounded the alarm on the devastating impact of the global debt crisis on human rights.
In a statement forwarded to The Explainer and issued on October 17, 2024, De Schutter emphasized that this crisis is not just a fiscal issue, but a full-blown human rights crisis, where people in the poorest countries struggle to access basic necessities like food, healthcare, and education.
“The debt crisis is not just a fiscal issue; it is a full-blown human rights crisis,” De Schutter declared.
He added, “in the poorest countries of the world, people are struggling to eat, access health services, or send their children to school, while their governments shell out billions of dollars to pay back loans to wealthy creditors.”
Climate change compounds the problem, De Schutter noted, saying, “countries with the highest levels of debt also tend to be those most vulnerable to climate change, but are being forced to prioritize debt repayments over addressing the severe consequences of the climate crisis.”
A staggering 3.3 billion people live in countries spending more on interest payments than education or health.
African countries borrow money at almost four times the rate paid by the United States, despite the astronomical level of US debt.
De Schutter criticized the international response, saying, “Creditors have responded too little, too late. The G20’s ‘Common Framework’, agreed in 2020 to bring international financing institutions, individual states, and private lenders together to speed up debt restructuring, is simply not working.”
He called for immediate debt relief for countries in crisis and urged urgent reform of the international financial system to align with human rights.
De Schutter emphasized the role of private sector creditors, stating, “Banks and hedge funds have become huge players in the world of sovereign debt and should not be exempt from their human rights responsibilities. It is abhorrent that debt repayments to the world’s richest corporations are being paid at the expense of children’s education or healthcare.”
The UN expert also criticized the conditions attached to bailout packages from International Financial Institutions, which often demand austerity measures and the sale of state assets.
He cited the recent case of Pakistan, which agreed to its 24th bailout from the International Monetary Fund under what the Prime Minister called “conditions beyond imagination.”
“The solution to the debt crisis is neither to stimulate economic growth at all costs, nor to impose austerity policies. It is to cancel or restructure debt, and to focus on public investment, particularly in social protection, that will restore the prospect of long-term prosperity.” he said.
