April 11, 2023 (MLN): External debt payments are set to reach their highest levels since 1998 for the world's poorest countries, according to a report by the UK group Debt Justice, formerly known as Jubilee Debt Campaign.
The report revealed that debt payments will account for more than 16% of government revenue this year, rising to 16.7% next year.
The last time the debt burden was this high, world leaders introduced a debt-relief plan that saw as much as 80% of debts canceled for the most indebted poor nations. The group called for fast and comprehensive debt relief schemes across all external creditors, including legislation in the UK and New York to make private lenders participate in debt cancellation.
Among the most indebted countries are Sri Lanka, Laos, Pakistan, Zambia, and Dominica, with external debt payments expected to take up over 30% of government revenue between 2022 and 2024.
Private lenders account for around half of the debt, with another 30% owed to multilateral institutions, 12% to Chinese public and private lenders, and 12% to other governments.
"Debt payments are reaching crisis levels in many countries," Heidi Chow, the group's executive director, was quoted as saying. "We urgently need fast and comprehensive debt relief schemes across all external creditors, including legislation in the UK and New York to make private lenders take part in debt cancellation," as reported by Bloomberg.
