Debt Relief for Poor Countries Could Provide Clean Drinking Water to 17 Million People, Study Shows

Reducing debt payments for the world’s poorest countries to more manageable levels could dramatically improve access to education and clean water, potentially allowing 5 million more children to attend school and providing clean drinking water to 17 million people, according to a recent study.

Research conducted by academics at the universities of St Andrews and Leicester highlights the significant benefits of cutting down on these repayments. The study suggests that reducing the debt burden could also save the lives of 60,000 children and mothers annually.

As external debt payments reach their highest levels in 30 years, the findings have energized campaigners who are calling for creditors to offer more favorable terms to low-income nations.

The report analyzed 39 countries where debt payments consume more than 22% of government revenue and a broader group of 88 countries where these payments exceed 15% of government income. The study found that if debt relief were to lower payments for the 39 most burdened countries to 14% of government revenue, the impact would be profound: 16 million people could gain access to basic sanitation, 7 million to clean drinking water, 2 million children could attend school, and over 30,000 children and mothers could avoid life-threatening poverty.

Expanding the scope to the 88 countries analyzed and reducing external debt payments to 5% of government revenue could yield even greater benefits. The study estimates that 33 million people could gain access to basic sanitation, 17 million to clean drinking water, 5 million children could attend school, and more than 60,000 children and mothers could survive the extreme hardships associated with poverty.

Countries with high debt levels included in the analysis were Angola, Kenya, Pakistan, South Sudan, and Tunisia.

The International Monetary Fund (IMF) and the World Bank have been advocating for accelerated debt relief through the Common Framework, a process designed to help highly indebted countries manage their financial burdens. Despite this push, only a few countries have participated so far. The IMF recently issued guidance stating that after debt relief, external debt payments should ideally be well below 14% to 23% of government revenue.

Dr. Bernadette O’Hare from the University of St Andrews emphasized the transformative potential of reducing debt in these nations. “Reducing debt to sustainable levels could lead to huge welfare improvements in heavily indebted countries, many of which are highly vulnerable to climate change and are forced to reallocate resources after extreme climate events,” she noted.

Heidi Chow, executive director of Debt Justice, also urged the government to prevent creditors from using UK courts to pursue debts from poor countries, further stressing the need for more compassionate debt relief measures.

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