Meanwhile, vulture funds (the name given to funds which seek to profit by buying up high risk, high yield debt) in the UK and the US continue to profit from developing countries that are trapped in debt.
Three of the biggest root causes of debt crisis are lack of transparency, exploitative private sector actors, and ineffective, undemocratic global institutions responsible for managing debt.
These roots reach deep into the global financial centres, particularly the City of London, and the IMF and World Bank.
The UK is responsible for regulating much of the lending boom in impoverished countries, with 90% of publicly traded loans to the majority of African governments being given using English law.
Overall, while 20% of African debt is owed to China, 30% is owed to the private sector – mainly owed under UK law but due to lack of transparency we do not know the share of this held by UK-based banks.
The lack of transparency in UK law means there is not enough accountability of lending.
Christian Aid is calling for the UK to step up and meet what it say is its ‘moral responsibility to avert debt crises in developing countries that are often struggling to recover in the wake of humanitarian emergencies’.
The early 2000s saw a major round of debt relief for countries caught in a trap of debt repayments, in response to the Jubilee 2000 campaigns.
Since the western…
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