The debt burden of countries in the Global South has again been growing for some years now. Climate crisis, war and the economic consequences of the pandemic are compounding the problem. Swiss lenders must play an active part in debt relief processes.
What it is about
The over-indebtedness of many countries in the Global South is a major stumbling block to the funding of new, pro-growth investments. Money that they must devote to servicing their debt for the benefit of the creditors in the North is then unavailable for urgently needed development spending. In Switzerland, banks and commodity traders act as lenders. Considering Switzerland's role as the country of domicile of major private creditors, it is not enough for them merely to make modest contributions towards the debt relief programmes of the IMF (International Monetary Fund) or the World Bank.
There is also a significant lack of transparency in this area: it is not known which banks and commodity traders have provided precisely how much credit or subscribed to bonds, and where. Alliance Sud wants to see greater transparency in this area and an active federal government that encourages private lenders in Switzerland to get involved in substantial debt relief programmes for countries in the South.