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JUBILEE 2025: The new global debt crisis and its solutions

Economic shocks triggered by the COVID pandemic and war in Ukraine have pushed dozens of low-income countries into debt distress since 2020. Today, more than 50 countries – or 1 in 4 countries globally – are in debt crisis. This number has more than doubled since 2015, with many more at significant risk. The devastating impacts on people’s lives and livelihoods has seen the past year marked by mass protests and riots across the Global South, from Kenya to Sri Lanka. Existing global debt structures offer no path to recovery. The institutions that govern global debt are overwhelmingly dominated by creditor countries. As a result, they encourage low-income countries to prioritise paying creditors over investing in their own development through spending on health, education, infrastructure, and industrial strategy. This creates a vicious cycle: without investing in development, countries are unable to grow their economies and escape debt. In the absence of clear international rules for responsible lending and borrowing or an effective mechanism for resolving crises, predatory private lenders can lend to debtor countries on onerous terms and refuse to offer adequate relief when countries enter debt crisis. This paper identifies the structural causes of reoccurring debt crises and highlights their impacts on the world’s poorest communities. I […]