19.04.2024

The debt of low-income countries not only threatens to exacerbate international crises but also risks the development prospects of many countries, undermining the implementation of the 2030 Agenda, debt sustainability, and macroeconomic stability.

It is imperative for LINK 2007 to address this crucial challenge by reproposing the issue of debt reconversion of low-income countries, already successfully introduced at the Italian G20 Presidency in 2021, on the occasion of which LINK 2007 organized a webinar chaired by the Deputy Minister for International Cooperation.

On the occasion of the Italian Presidency of the G7 and under the aegis of the Deputy Minister of Foreign Affairs responsible for development cooperation, Hon. Edmondo Cirielli, LINK 2007 proposes, in the framework of Codeway Expo 2024, the event “Debt conversion for sustainable development: Release G7”, in order to deepen the issue of debt, especially in Africa, in view of the G7 appointments, such as the Development Ministerial and especially the G7 Summit.

On 15 March, during the first meeting of the Cabina di Regia for the Mattei Plan, the issue of debt was evoked by LINK 2007 and other participants as an inhibiting or at least risky element for the success of the Mattei Plan, and the President of the Council, sensitive to the issue, called for concrete proposals.

The intent of the event is therefore twofold, political and programmatic: on the one hand to engage public opinion and political forces on the issue, and on the other to submit proposals to the Italian G7 Presidency.

In a very brief summary, the Release G7 proposal envisions flexible full or partial debt conversion for low-income African countries and countries whose indebtedness has been exacerbated by the economic and social consequences of international crises with risk of default. The initiative proposes that the G7 and national and international financial institutions go well beyond the temporary suspension of payments and implement partial or total debt conversion and cancellation, with the debtor country creating a counterpart fund in local currency, aimed at sustainable development – Sdg Fund – nominally equivalent to the value of the net principal reduction.

The indebted country, that is, reduces public spending on debt service in exchange for a firm institutional and political commitment to invest, in its economies, the equivalent amount in local currency, according to an agreed timetable and to co-finance defined investments aimed at creating new jobs and achieving the Agenda 2030 sustainable development goals. This Fund, on a country-by-country basis, could also become the co-financing for programs and projects under the Mattei Plan.

The impact of the proposal is undoubted. Suffice it to consider that 64 countries in the world (34 in sub-Saharan Africa) spend more on paying off public debt than on health care.

To access the event you must register: HERE    

For more information: comunicazione@link2007.org

Documents:

RELEASE G7, ENGLISH PROPOSAL

RELEASE G7, ENGLISH SUMMARY PROPOSAL