As the New Global Financing Pact Summit (June 22-23 in Paris) draws to a close, Oxfam calls out rich countries for their calamitous failure to redistribute money and power in the interests of the world’s poorest people.
Oxfam analysis (April 2023) found that low-and middle-income countries face a $27 trillion black hole – accumulating at around $3.9 trillion a year to 2030 – when it comes to meeting climate and social spending needs.
“I am deeply disappointed that this Summit has failed to provide a response commensurate with the colossal needs of the countries of the South to cope with climate change and provide their populations with essential services such as healthcare” said Cecile Duflot, Executive Director of Oxfam France.
“While the wealth of the super-rich booms, the lives and livelihoods of the world’s poorest people are battered by crisis after crisis” continued Duflot. “They needed this Summit to deliver trillions of dollars of new debt-free money for low-and middle-income countries. What they got was a rehash of old broken promises and the prospect of more loans that will push the poorest nations further towards debt disaster. This Summit has done nothing for the two billion people – representing one quarter of humanity – who live in countries that cannot afford to take on more debt.”
The COVID-19 pandemic has set back the fight against poverty by a decade, and by 30 years in regions like Sub-Saharan Africa. Poorer countries are also facing the greatest harmful impacts of climate change, despite having done least to cause it. In Ethiopia, Kenya, Somalia and South Sudan alone, one person is likely to die of hunger every 28 seconds, in large part to the region suffering its worst drought in history.
Fati N’zi-Hassane, Oxfam in Africa Director, said: “We cannot continue with a system that protects the extravagance and excesses of rich people and rich countries, at the expense of a decent life for those in poorer countries. We must put an end to a system that fills the pockets of billionaires and big corporations, while hollowing out public budgets in poorer countries, leaving them unable to pay for public services or tackle the impacts of climate change.”
“By ignoring obvious solutions, like canceling debts or effectively raising taxes on the wealthiest people and corporations, rich countries meeting at this Summit have put the greed of the few ahead of the needs of the many. And by failing to make polluters pay, they have rewarded those who are profiting from pushing our planet to climate catastrophe, leaving poor and vulnerable populations to suffer the consequences.”
Fati N’zi-Hassane added: “Canceling the debt of low-income countries, without economic conditionalities, could create urgently-needed fiscal space to invest in tackling poverty and climate impacts. Innocent lives are on the line while creditors struggle to find the political will to break the deadlock on debt.”
Oxfam also criticizes the lack of inclusivity in the process – the Summit was essentially shaped by players from Northern countries and international financial institutions – as well as the significant role given to the private sector. Once again, rich countries are avoiding their responsibility and leaving matters in the hands of the private sector.
Press contacts
Marika Bekier in Paris, France | mbekier@oxfamfrance.org | +33 6 24 34 99 31
Annie Thériault in Lima, Peru | annie.theriault@oxfam.org | +51 936 307 990
Notes to editors
- Oxfam’s analysis (April 2023) of the $27,000 billion (around $3,900 billion a year until 2030) needed by low- and middle-income countries to cope with climate-related loss and damage, adaptation and mitigation measures, as well as their health, education and social protection needs.
- « Two billion people live in countries that cannot afford to take on more debt »: Two billion is the sum of the population of 40 low-income countries that the IMF and World Bank rate either « in debt distress » or « at high risk of debt distress » (which makes them ineligible to get loans from the World Bank and receive grants instead), plus half of the population of 22 low-income countries rated « at moderate risk of debt distress » (which receive half their World Bank support in the form of grants and half as concessional loans), plus the population of 23 middle-income countries of which the sovereign bonds are currently traded at a yield of over 10%, plus the population of eight low or middle-income countries that are shut off international financial markets such that they have neither ratings from the WB/IMF, nor internationally-traded bonds.
- Calculations of mortality figures for Ethiopia, Kenya, Somalia and South Sudan are based on the IPC reports on acute food insecurity published on https://www.ipcinfo.org/, using the crude mortality rates associated with IPC phase 3 in version 3.1 of the IPC technical manual. We subtract 0.22 deaths per 10,000 people affected per day to account for the « normal mortality rate », based on World Bank data.
- Oxfam has calculated that a net wealth tax of up to 5% on the world’s multi-millionaires and billionaires could generate $1.7 trillion annually. See the Survival of the Richest methodology note here.
