Research warns poorer governments prioritising debt payments over essential development spending
Developing countries need a fresh round of debt relief, to prevent money urgently needed for health and education being diverted to creditors, according to a major new report commissioned by the late Pope Francis.
The Jubilee report, produced by a panel of experts chaired by Nobel prize-winning economist Joseph Stiglitz, argues for debt restructuring, along the lines of the Heavily Indebted Poor Countries initiative (HIPC).
Stiglitz told the Guardian that many developing countries are facing a “perfect storm” as they had little choice but to ramp up borrowing through the Covid crisis and subsequently faced sharply higher interest rates as central banks battled to tackle inflation.
“Now, because of Trump tariffs, there’s a global slowdown expected and that will give them even less revenue, and potentially it could lead to higher inflation and that again would lead to even higher interest rates. It’s one thing after another,” Stiglitz said.
