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Ethiopian Prime Minister Abiy Urges, Cancel Poor Nations’ Debt To Avoid Humanitarian Disaster

May 5, 2020 (EIRNS)—Ethiopian Prime Minister Abiy Ahmed in a New York Times op-ed on April 30, said the temporary relief of debt repayments offered by the Group of 20 nations to the end of the year is helpful, but to avert a “humanitarian disaster” there must be “debt cancellation.” He notes that “in 2019, sixty-four countries, nearly half of them in Sub-Saharan Africa, spent more on servicing external debt than on health.”

Now with the COVID-19 spreading in the Global South, these countries face the choice, to pay debt or to save lives. For example, “Ethiopia spends twice as much on paying off external debt than on health,” he writes. Abiy argues for global creditors, both “official bilateral and commercial,” to urgently act to “save lives and livelihoods.” The IMF, he reports, puts Ethiopia on its list of countries “at high risk of external debt distress” despite also naming it, prior to the pandemic, as one of the fastest-growing economies in the world. By April 2020, the World Bank says that “Sub-Saharan Africa would face its first region-wide recession in over 25 years” to which Abiy attributes “the recession will be the product of the coronavirus outbreak.”

The Prime Minister then takes aim at the investment banks. “Official bilateral creditors are no longer the principal source of external debt for many developing countries. Private-sector creditors, including investment banks and sovereign funds” hold the purse-strings to their debt. Abiy demands that these creditors “play their part in the effort to rescue African economies from permanent paralysis....” He drives his point home that “it would be morally indefensible if resources freed up from a moratorium in bilateral debt collections were to be used to pay private creditors instead of saving lives.”

Finally, he argues the G20 end-of-year “moratorium” must be extended “until the coronavirus health emergency is over or cancelled altogether,” and all “creditors need to do this unconditionally.” Were this not done, he concludes, “the consequences of neglect will harm all of us.”

On May 1, Prime Minister Abiy issued “A Pledge for Africa” that similar stresses, “The world will not be free of the COVID-19 pandemic until all countries are free of the coronavirus that causes it.” His complete statement appears in the May 4 issue of EIR Daily Alert.

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