Caritas Australia’s Turn Debt Into Hope campaign highlights the devastating effects on development that the global debt crisis has on countries of the Global South.
One important way that indebted countries can pay off their loans is by earning foreign currency through exports. Tariffs are a major barrier to exports to the United States and have a deadening effect on economic activity around the world.
US tariffs have been placed not only on large economies in competition with America, but also on lower income countries. Of these, those with the highest external debt payments are being hit with tariffs of at least 10 percent. This means that countries such as Laos (48 percent), Sri Lanka (44 percent) and Angola (32 percent) are facing much higher levels. The average tariff across all 20 lower-income countries with the highest external debt payments is 18 percent.
As well as hitting exports, the wider global economic impact of the US tariffs may cause the greatest damage to indebted countries of the Global South. Volatile commodity prices can trigger intensified debt problems, and the price of oil, for instance, fell by 12 percent in April. Angola, Senegal, Republic of the Congo, Cameroon and Nigeria all have high external debts and are dependent on oil as a key export. They will feel these debt impacts the most.
To take action and learn more about how you can help address these issues, please register for the launch of Caritas Australia’s Turn Debt Into Hope campaign by clicking on the link below.
