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Global South’s Debt Problem
September 8 , 2023
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- The 18th G20 Heads of State and Government Summit will be held in New Delhi.
- The meeting will witness discussion on a wide variety of topics, including climate, green development, digital economy, public infrastructure and many more.
- One of the key issues up for talks will be the persistent and crippling problem of debt among a number of developing countries.
- The external debt is the money borrowed from richer countries, multilateral creditors like the World Bank and IMF, or private lenders such as banks.
- Of these nations, mostly in the global south has gone up by 150% between 2011 and 2023, reaching their highest levels in 25 years.
- Zambia in June clinched a $6.3 billion debt rework deal with the “Paris Club” creditor nations.
- Its other big bilateral lender is China.
- Ghana is aiming to reduce its international debt payments by $10.5 billion over the next three years.
- Pakistan needs upwards of $22 billion to service external debt and pay other bills for fiscal year 2024.
- Kenya’s public debt stands at nearly 70% of GDP.
- Lebanon has been in default since 2020, with no clear resolution in sight.
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