The corona crisis is plunging many developing countries into emergency situations. Swiss banks have a responsibility as major creditors of these countries. Together with 10 other Swiss organisations, we are calling on the Swiss government to convene a round table to negotiate the modalities of debt relief.
Joint press release of 4 June 2020
Due to the many negative developments in the global economy, poor countries are threatened with the worst debt crisis since the 1980s: It started before Corona, and is now being ...aggravated. In March, UNCTAD called for the UN World Trade and Development Conference to 2.5 trillion international aid package to combat the health, social and economic crisis in developing countries.
The additional financial resources that multilateral organizations such as the International Monetary Fund (IMF) and the World Bank, but also individual countries such as Switzerland have already spoken of in the context of humanitarian aid and development cooperation, are not sufficient to adequately address the crisis in developing countries.
Creditor and donor countries must therefore now also move in terms of financial and tax policy. In recent months they have put together historically unique aid packages to save their own economies. Firstly, poor countries have hardly been able to benefit from this and secondly, they do not have the economic policy levers to mobilise comparable corona aid themselves. However, debt relief can quickly mobilise additional funds for the affected countries to combat the crisis.
Switzerland has long since stopped granting bilateral loans to state creditors and, moreover, has only very limited influence in the IMF and the World Bank when it comes to shaping their lending regimes. Swiss banks, on the other hand, play an important role as private creditors of states: According to previously unpublished figures from the Swiss National Bank (SNB), the public debt that the 86 poorest countries currently have with forty Swiss banks totals CHF 5.7 billion.
Eleven Swiss development organisations are therefore calling on the Federal Council to convene a round table to negotiate the modalities of urgent debt relief for developing countries by Swiss banks. In addition to the interests of the Confederation, the lending banks and debtor governments, the interests of civil society must also be represented at this round table. The concerns of the sections of the population in the debtor countries most affected by the Corona crisis must be heard directly and substantially in the negotiations.
Furthermore, the signatory organisations demand that the banks involved provide transparency to the public about their loans, their conditions and the modalities of their repayment. This is a matter of public debt, which must be supported by the general public in the countries concerned; there is therefore a high public interest in these data. In the spirit of policy coherence for sustainable development, which is also enshrined in the UN's Agenda 2030 for sustainable development, the Swiss public also has an interest in these data. In some of these countries, both the Swiss Agency for Development and Cooperation (SDC) and the State Secretariat for Economic Affairs (Seco) are involved in projects as part of their international cooperation.
Signed by terre des hommes schweiz, Alliance Sud, Swissaid, Swiss Catholic Lenten Fund, Bread for All, Helvetas, Solidar Suisse, Public Eye, KEESA, Solifonds and Multiwatch
Photo: flickr.com/khrawlings - CC BY-NC 2.0
