Vulnerable countries will be forced to choose immediate survival over climate action should the rest of the world fail to commit to more effective debt relief, climate resilience funding, and the wholesale renovation of international tax laws, say sustainable development experts.
“While the world’s advanced economies have spent an estimated US$12 trillion on stimulus packages, fragile and indebted economies in Africa and Latin America are struggling to meet basic needs,” writes Climate Home News. With so many of their citizens struggling to secure basic food and shelter, the world’s most vulnerable countries are in no position to “build back better” by investing in the green economy.
“First of all, we need to make sure that we survive,” Angola Finance Minister Vera Daves de Sousa told a recent even hosted by the International Monetary Fund (IMF).
In Belize, COVID-19 relief spending has overstretched national budgets while the tourism industry has collapsed, causing unemployment to double. “The emergency expenditures that we are being forced to undertake right now are putting our debt numbers in a place where we’re going to have great difficulty accessing resources for continuing green investments in the medium to long term,” Саrlа Ваrnеtt, the country’s minister for labour, local government, and rural development, told Climate Home. “We have to keep our economies going because if we don’t, it’s not only risking climate investments in the future, it’s risking lives now.”
Rich nations, meanwhile, are doing little to address the tragic quandary faced by their less-wealthy peers. Recently, G20 finance ministers “agreed to allow the poorest countries to suspend their debt repayments until June 2021,” with the possibility of a longer extension to be considered later. That decision, says Climate Home, “doesn’t reduce the balance, nor does it cancel interest charges.”
Both the IMF and the World Bank are warning that a long-term solution to debt in the developing world is an imperative, and many countries are calling for deeper relief. A round table of African finance ministers is asking for “a debt payment freeze of two to three years for all African countries as well as low- and middle-income countries,” as a minimum.
Ghana Finance Minister Ken Ofori-Atta said Africa’s demands are “‘a drop in the bucket’ on a global scale—less than 3% of what OECD countries have already spent to safeguard their economies,” writes Climate Home. But redressing the debt crisis is only part of the solution, said Giza Gaspar Martins, climate change director with Angola’s environment ministry, adding that the debt freeze “doesn’t give space to countries to cater for their short-term needs and longer-term development prospects”—a concern that should be higher on the radar in discussions of global debt relief.
Calling the situation “unfair and unfortunate,” Ваrnеtt urged the international community to consider pandemic-related debt as an emergency expenditure that could be refinanced “at very low cost and over a long period of time”. While poorer countries like hers “are not the climate offenders,” she added, they do “bear the burden of the cost.”
In related news, recent analysis published in the journal Science makes “a concrete case” that pandemic recovery can be aligned with emissions reduction.
In an op-ed for Carbon Brief, study authors Marina Andrijevic, research analyst at Climate Analytics, and Joeri Rogelj, a lecturer in climate change and the environment at the Grantham Institute for Climate Change, explain how investing roughly 10% of the more than $12 trillion in pandemic recovery funding in “strong green stimulus measures” for the next five years will “avoid 0.3°C of warming by mid-century—and could help limit it to 1.5°C.”
But, they warn, should the world’s nations fail (or be unable) to seize upon this opportunity, current climate efforts alone will put the world on course for a catastrophic 3°C of warming.
In a striking juxtaposition, both the Climate Home and Carbon Brief reports landed on the same day that the Inter Press Service (IPS) released analysis showing that a “phenomenal rise” in extreme poverty is taking place, alongside a record upswing in the number of global billionaires.
Out of a world population of roughly 7.8 billion, more than 736 million people are living on less than $1.90 per day, placing them below the international poverty line, IPS writes. Meanwhile, the billionaire count has reached a high of 2,189, with a total combined wealth of $10.2 trillion.
The study did find that the increase in the number of billionaires has been accompanied by an increase in philanthropy, IPS writes. But “with some 209 billionaires pledging $7.2 billion in donations,” said Pooja Rangaprasad of the Rome-based Society for International Development, “philanthropy or charity is not a substitute for systemic solutions.”
Echoing policy-makers with both the IMF and the World Bank, she warned that “unless global economic solutions are prioritized to ensure developing countries have the fiscal space to respond to the crisis, the consequences will be devastating, with millions being pushed back into extreme poverty.”
Dereje Alemayehu, executive coordinator of the Global Alliance for Tax Justice, told IPS the growing economic divide owes directly to the fact that tax avoidance is starving public treasuries of the funds countries need to protect and advance the well-being of ordinary citizens.
“Multinationals and the wealthy do not pay their share of taxes, thus depriving countries the public revenue needed to address inequality,” he said.
