‘Developing country governments are being wrongly advised to use their modest fiscal resources to pay down accumulated debt instead of strengthening pandemic relief and recovery. Thus, debt phobia risks deepening and extending COVID-19 recessions by prioritising buybacks...
‘With ‘collective action’ complications affecting negotiations, and the greater number and variety of heavily indebted countries and creditors, equitable debt buybacks are impossible to negotiate. Worse, prioritising buybacks means rejecting former debt hawk Reinhart’s current pragmatic advice to “First fight the war, then figure out how to pay for it”.
‘The urgent priority is for fiscal resources to strengthen relief, recovery and reform measures. Prioritising debt buybacks, instead of urgently augmenting fiscal resources, may thus contribute to another “lost decade” or worse.’
Read here (IPS News, March 9, 2021)
