Low-income countries may be pursuing fossil fuel projects not for national prosperity, but largely to repay mounting debts, new research suggests.
But this is not the case for all low-income countries developing their energy resources, according to a new by anti-debt campaigners Debt Justice and partners. The report suggests that richer countries and private lenders may be forcing heavily indebted countries to rely more greatly on fossil fuels to repay their debt. It shows that several low-income states are continuing to invest in oil and gas projects to make their repayments, mainly for loans from richer nations.
The report shows that debt from global south countries has risen by 150 percent since 2011, with 54 countries facing a debt crisis. This has restricted the amount of money these countries can invest in tackling climate change or developing green energy projects. In 2020, in Suriname, the government was forced to agree to a deal providing creditors with the right to nearly until 2050, after it defaulted on its debt.
Sharda Ganga, the director of the Surinamese civil society group Projekta, stated “As our debt has grown unsustainable, it dominates all policy decisions and impacts the lives of our citizens in every possible way. Earning money as quickly as possible to pay back the creditors is therefore priority number one. It means there is no more room for patience and such pesky things like sustainability or climate justice.
The report also emphasises the World Bank and IMF’s overestimation of the anticipated revenue benefits of fossil fuel projects on their host nations, with growth following oil discoveries having systematically underperformed against IMF predictions. Debt Justice believes that as well as cancelling debt linked to oil and gas projects, the world’s major financial institutions should ensure finance is aligned with a 1.5-degree warming scenario and is not linked to fossil fuel developments.
Belgique Dernières Nouvelles, Belgique Actualités
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