A feminist organization has urged African governments to suspend debt payments and refocus their revenue on financing a comprehensive and gender sensitive Coronavirus (Covid 19) pandemic response strategy.
Recommendations from a study, ‘Who cares for the future: Finance gender responsive public services’, challenges indebted countries to stop loan repayments, resist financial bailout conditions and ditch austerity policies to create greater fiscal space for a comprehensive Covid-19 response.
Key findings of the study, conducted by an international feminist organization Action Aid, shows that International Monetary Fund ‘hegemonic austerity’ conditions contradict aspirations of achieving Sustainable Development Goals (SDGs) and limit a nations’ ability to respond effectively to COVID-19.
Action Aid urges indebted governments, whose public services are chronically underfunded, to turn ‘away from neoliberal orthodoxy in favor of a rights based perspective’, and build inclusive economies that care for both people and planet.
It also called for renegotiation of future loans to sustainable levels, ditching of austerity policies and the lifting of constraints on ‘public sector wage bills, so that more doctors, nurses and care workers can be recruited urgently.’
“Governments should immediately suspend debt payments in order to finance domestic responses to COVID-19 and renegotiate debt servicing for the future so that it does not exceed 12% of national budgets.
“Governments have to spend the money they raise in taxes on a comprehensive response to Covid-19, not paying old debts.
“…actions to address debt, austerity and tax justice will be fundamental to releasing resources for the dramatic scaling up of investments in gender responsive public services.
“Spending on basic services such as education, health, and water and sanitation, may cause rising deficits now, but without those services, the chances of a country growing and developing in the medium or long term are severely compromised,” read part of the report.
Action Aid said indebted countries must pursue gender responsive, expansionary macro-economic policies, counter-cyclical investments to address, a looming debt crisis, austerity and regressive tax regimes.
The study reviewed 56 countries including Zimbabwe, exploring connections between gender responsive public services, unpaid care and domestic work.
“There needs to be more focus on progressive and gender responsive revenue collection, including ending harmful incentives, promoting and enforcing fair corporate tax, as well as taxes on the income, capital, land and property of the wealthy.
“Responding to COVID-19 will require rapid and significant expansion of government revenues and may require even more radical options for tax reform to be considered…
“Key priorities should be to revise tax incentive regimes and corporate taxes, consider property and wealth taxes, strengthen tax systems and promote international cooperation on corporate tax and wider reforms.
“Governments should set ambitious targets for increasing tax to GDP ratios in a progressive way, targeting an increase of 5% in the coming few years and an increase of 10% by 2030.” read part of the report.
Action Aid said the “debt crises of the 1980s and 1990s …forced countries to accept IMF austerity programs that undermined development throughout Africa, Asia-Pacific, and Latin America and the Caribbean, with many countries yet to recover.”
Now there is increasing worry, including from the IMF and international financial institutions that a new debt crisis is imminent, as developing countries debt spending has risen sharply primarily because of austerity policies.
This has widened gap in labor practices with women pushed out to perform over three quarters of unpaid care and domestic work worldwide, the International Labor Organization (ILO) estimates that it would take 209 years to close this gender gap.
“The new debt crisis threatens to take away even more resources that are urgently needed to expand public services.
“In short, we found that, just as in the 1980s and 1990s, the IMF continues to insist that governments overcome or avoid debt crises by adopting policies that constrict their economies, through sharp limits on public spending, limiting fiscal deficits and holding inflation down, usually to about 5%.
“…the amount of revenue governments spend on paying debt has risen sharply in recent years. In 2019 the UK campaigning and policy group Jubilee Debt Campaign (JDC) found external debt payments by developing countries had grown 85% between 2010 and 2018, from 6.6% of government revenue to 12.2%,” said Action Aid.
“Looking at this another way, 16.4 billion hours per day are spent in unpaid care work – the equivalent to 2 billion people working eight hours per day with no remuneration. Were such services to be valued on the basis of an hourly minimum wage, they would amount to at least 9% of global GDP or US$11 trillion.”
