Countries worst affected by food crises spend $40 billion on external public debt service – UK must show genuine solidarity

New research published today by Results UK on the eve of the United Nations (UN) Summit of the Future calls on the UK to live up to its responsibilities to the countries most affected by food crises.

Bad Loans, Poor Nutrition: Why debt justice – along with more and better ‘aid’ – is essential to end global malnutrition argues that the UK is allowing vulnerable countries to drown in debt while providing them with insufficient overseas development assistance (ODA or ‘aid’).

The report finds that the 16 countries most affected by food crises paid $40.3 billion on external public debt service last year, up from $25.8 billion in 2021. Furthermore, the governments of these countries are spending an average of 1.9 times the amount on external public debt payments than they are spending on health.

As 90% of foreign currency bonds owed by the poorest countries are governed by English law, the UK is uniquely placed to ensure that loans to the Global South are lawful, transparent and protected from unfair claims from private creditors. But to date the UK has taken minimal steps to make this a reality.

The report also argues that the UK must use its influence at the global level to push for debt restructuring and debt cancellation mechanisms that operate under UN auspices. As the case of Zambia illustrates, the Common Framework established by world’s largest economies is not addressing the debt disaster facing the Global South.

Meanwhile, the amount of UK ODA for nutrition plunged following the UK’s severe cuts to the ODA budget in 2020. Reversing these cuts, and ensuring that asylum seekers and refugees in the UK are supported from non-ODA budgets, would allow the UK to return to its previous (2013-20) levels of global nutrition funding.

The report demonstrates that the state of global nutrition is nothing other than dire, with 2.8 billion people unable to afford a healthy diet. Ironically, extremely cost-effective nutrition interventions are well established. Yet high levels of debt and low levels of ODA mean that these interventions are starved of investment. The International Monetary Fund’s (IMF) flawed debt sustainability framework and imposition of pro-austerity policies on the poorest countries just aggravates the lack of funding for nutrition.

Sunit Bagree, Senior Policy Advocacy Officer at Results UK and author of the report:

“The new Government has a real chance to transform the UK’s relations with the Global South and fulfil its international obligations. Taking action on unjust global debt, including through domestic legislation, would help to break the brutal cycle of debt crises. Reversing ODA cuts, and improving the quality of ODA, would represent an important investment in the future of humanity. By demonstrating leadership in these areas, the UK can incentivise other countries, as well as multilateral institutions, to dedicate adequate resources to ending malnutrition everywhere.”

Cindy Maimbolwa, Programs & Advocacy Officer at CITAMPlus (a Results UK partner):

“Despite Zambia completing the Common Framework process, the country still faces a huge debt burden. This proves that the world needs truly inclusive and effective international processes to tackle debt crises. It is also necessary for the IMF to refrain from imposing austerity on ordinary Zambians. In addition, as Zambia has some of the highest rates of child stunting globally, it still requires high quality ODA that builds partnerships with the Zambian Government and civil society to reach more of the country’s marginalised people.”

ENDS

The full report can be downloaded here https://results.org.uk/publication/bad-loans-poor-nutrition/

Media enquiries: Jessica Roberts, Results UK Campaigns and Communications Officer, [email protected] / +44 (0)7415 289712

Notes 

  • According to the UN, the Summit of the Future will bring ‘world leaders together to forge a new international consensus on how to deliver a better present and safeguard the future’. For more information, see https://www.un.org/en/summit-of-the-future. 
  • The Common Framework was set up by the G20 in 2020. It is meant to coordinate debt relief and restructuring for up to 73 of the world’s poorest countries.
  • Research by Debt Justice shows that 90% of foreign currency bonds owed by countries eligible for the Common Framework are governed by English law. 
  • In November 2020, the UK reduced its ODA budget from 0.7% to 0.5% of Gross National Income. Nutrition financing was particularly badly impacted as a result of this reduction. 
  • According to the Independent Commission for Aid Impact, 27.9% of the UK’s ODA is now spent on supporting refugees and asylum seekers in the UK (known as in-donor refugee costs).
  • Research by the World Bank shows that around 2.8 billion people (35% of the global population) cannot afford a healthy diet.
  • Highly cost-effective nutrition interventions include prenatal multiple micronutrient supplementation, breastfeeding promotion and support, vitamin A supplementation and ready-to-use therapeutic food.
  • Zambia has some of the highest rates of child stunting in the world. For more information, see https://ourworldindata.org/grapher/share-of-children-younger-than-5-who-suffer-from-stunting.   
  • Results UK is a movement of passionate, committed people. Together as staff and grassroots activists, we advocate directly to parliamentarians, the UK Government and other decision-makers with the aim of guiding them towards commitments that reduce poverty and inequality. Along with CITAMPlus, Results UK is a member of ACTION, a partnership of global health advocacy organisations. For more information, see www.results.org.uk. 
  • Sunit Bagree joined Results UK in January 2024. He has worked on global poverty and human rights issues for over twenty years. He is also a Research Associate in International Development at the University of Sussex.