Letter to the Minister about private lenders and overseas debt relief

Rt Hon Andrew Mitchell MP

Minister of State for Development and Africa

 5 May 2023

Dear Andrew, 

I am writing to urge the Government to act on the recommendations of the recent International Development Select Committee (IDC) report and introduce legislation to compel all creditors to participate in debt relief for low-income countries.  

As you will know, the IDC report considers how to tackle the debt crisis facing many low-income countries across the globe. The pandemic and other international developments, such as the war in Ukraine, have plunged already-struggling countries into further debt, preventing them from directing funds to vital public services such as healthcare and education, or to climate action. Furthermore, my constituents have highlighted the plight of countries like Pakistan which has been devastated by floods, and yet this year must pay over $20 billion on debt repayment - all the while speculators are making a profit off the nation’s crisis.  

The Common Framework was established to remedy the debt crisis in the aftermath of the pandemic, but we all know that this framework is failing. Only Chad, Zambia, Ethiopia and Ghana have applied for debt reduction under the Common Framework, and the IDC has found that, to date, not a single one of these four countries have received any reduction; and all Chad has achieved is a rescheduling of its existing level of debt. This response is also discouraging other eligible countries from applying. 

It is clear that the Common Framework is not working. Consequently, we need stronger incentives for debt relief that only legislation can provide. The UK Government is uniquely positioned to take action on the global debt crisis, due to its international position and the role that UK courts play in lending to low-income countries. I therefore urge you to follow the advice of the IDC report and take steps to introduce legislation to compel private lenders to participate in debt relief, before further irrevocable damage is done to the poorest countries of the world.

I look forward to hearing from you. 

Yours sincerely,

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