Call on G20 to Cancel $1 Trillion in TW Debt Next Week

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[Economics] [Campaigns] [COVID-19] [ULK Issue 70]

Call on G20 to Cancel $1 Trillion in TW Debt Next Week

Recent United Nations estimates of the economic impacts of the coronavirus pandemic show that half a billion people, or 8% of the population, could be pushed into poverty (using World Bank poverty lines of $1.90 - $3.20 per day). The worst hit areas are projected to be South Asia and East Asia. This will be the first time global poverty has increased since 1990 and this could wipe out all the progress made in reducing poverty in that time.

If the UN’s worst-case projection proves true, it will be a huge blow to the image of capitalism as a force of progress. In recent years, capitalists have been using global income statistics to try to disprove Karl Marx’s theories that the masses are continuously impoverished to more extremes under the pressures for profits under capitalism. Of course we have always countered that the bulk of this reduction can be accounted for by China, whose success is built on the radical land reform and unleashing of the productive forces during its socialist period, which ended by 1976. Still, this propaganda point has been hard to counter in a popularly accepted way.

There is nothing like a crisis to lead people to question capitalism’s ability to meet peoples’ needs. Yet in the short-term, we see the interests of the Third World proletariat in some of the proposals coming from bourgeois internationalists looking to limit the depths of the coming crisis. A newly proposed plan from Oxfam calls for $2.5 trillion, “made up of $1 trillion in debt relief, $1 trillion in additional liquidity mobilized through SDRs [Special Drawing Rights - which is like grant money from the IMF] and $500bn in aid to support developing country health systems.” They offer potential impacts of this plan:

“The immediate cancellation of US$1 trillion worth of developing country debt payments in 2020. Cancelling Ghana’s external debt payments in 2020 would enable the government to give a cash grant of $20 dollars a month to each of the country’s 16 million children, disabled and elderly people for a period of six months.”

Such life-saving amounts are a fraction of the benefits Amerikans are already receiving from pandemic-related funding bills. Oxfam has done the math to back up calls already coming from the Vatican for international finance capital to forgive debt to the Third World. In addition to debt relief, it proposes a $1 trillion fund (called SDRs above) of international reserves that can be drawn on by the indebted countries during the pandemic.

The United $tates has passed laws to extend unemployment to self-employed and informal workers, recognizing the lack of safety net for those people. Oxfam points out that is only 18% of the population in rich nations, while for poor nations 90% of the people are informal workers with no safety net. Oxfam’s report cites the United Nations, saying that half of jobs in Africa could be lost in the coming months. But the latest stimulus plan from the United $tates only offered $1.1 billion to address the crisis in poor countries, a mere 0.05 % of the $2.2 trillion plan.

The Oxfam report hints at an international tax on the most profitable companies or wealthiest individuals as another form of wealth redistribution to provide the needed funding. MIM has long stood for a global maximum income for all of the world’s citizens as a similar form of limiting wealth accumulation and hoarding.

Madonna somberly referred to COVID-19 as the “great equalizer” from a luxurious bath in eir mansion. But the Third World proletariat will not be reporting in on video from a rose petal bath during “stay at home” orders. Coming into this crisis, 46 countries were spending on average four times more money on debts than their public health services, and 113 countries had IMF-required austerity plans in place as conditions for those debts. The people of those countries are starting off far behind us in the imperialist countries. Health care is already seriously inadequate, and people were already living on the bare essentials. They have much less of a cushion than us, despite all our bills and persynal debts. Madonna is correct that this crisis does affect everyone, both threatening their health and economic stability, but it is far from equalizing.

Uniting the globe to fight this pandemic must address the unequal needs and access of the oppressed nations of the world. Onerous debt repayments and the economic restructuring requirements that accompany them, is one of the major causes of the destitution faced by the global proletariat, reaching its highest point at 191% of those countries GDPs in 2018. Now is the time to forgive these debts, release control of economic policies, and grant national self-determination to countries that have effectively been neo-colonies of the United $tates, and international finance capital in general, for decades.

Oxfam is calling on the G20 Finance Ministers at their 15 April 2020 meeting and the International Monetary Fund (IMF) and World Bank which are meeting 17-19 April 2020, to take on their proposed plan.

Notes: Oxfam International, 9 April 2020, Dignity Not Destitution: An ‘Economic Rescue Plan for All’ to tackle the Coronavirus crisis and rebuild a more equal world.