Developing country debt payments increase by 60% in three years
by Jubilee Debt Campaign
An expected rise in US interest rates will increase financial pressures on developing countries already struggling with a 60% jump in their debt repayments since 2014, a leading charity has warned.
The Jubilee Debt Campaign said a study of 126 developing nations showed that they were devoting more than 10% of their revenues on average to paying the interest on money borrowed – the highest level since before the G7 agreement to write off the debts of the world’s poorest nations at Gleneagles, Scotland, in 2005.
Five of the countries on the charity’s list – Angola, Lebanon, Ghana, Chad and Bhutan – were spending more than a third of government revenues on servicing debts.
Developing country debt moved down the international agenda following the Gleneagles agreement in which the G7 industrial countries agreed to write off the debts owed to the International Monetary Fund and the World Bank by the 18 poor countries.
But developing country debt is now once again being closely monitored by the IMF, which says 30 of the 67 poor countries it assesses are in debt distress or at risk of being so.
Lending to developing countries almost doubled between 2008 and 2014 as low interest rates in the west led to a search for higher-yielding investments. A boom in commodity prices meant many poor countries borrowed in anticipation of tax receipts that have not materialised.
The Jubilee Debt Campaign says the boom–bust in commodity prices was only one factor behind rising debt, pointing out that some countries were paying back money owed by former dictators, while others had been struggling with high debts for many years but had not been eligible for help. The campaign said developing countries were also vulnerable to a rise in global interest rates as central banks withdrew the support they have been providing since 2008.
The US Federal Reserve is expected to raise interest rates this week – with the financial markets expecting two or three further upward moves during 2018.
Tim Jones, an economist at the Jubilee Debt Campaign, said: “Debt payments for many countries have risen rapidly as a result of a lending boom and fall in commodity prices. The situation may worsen further as US dollar interest rates rise, and as other central banks reduce monetary stimulus. Debt payments are reducing government budgets when more spending is needed to meet the sustainable development goals.”
External loans to developing country governments rose from $200bn per year in 2008 to $390bn in 2014 and while they have since dropped to $300-350bn per year from 2015-2017 they remained well above levels seen prior to the global financial crisis.
Commodity prices peaked in the middle of 2014 and more than halved over the next 18 months. Despite a recovery from their low in January 2016 they remain more than 40% lower than they were at their peak.
The Jubilee Debt Campaign said the fall in global commodity prices had reduced the income of many governments that are reliant on commodity exports for earnings. In addition, weaker commodity prices led to the exchange rates of developing countries falling against the US dollar, increasing the relative size of debt payments since external debts tend to be owed in dollars.
Angola and Mozambique – two sub-Saharan African countries heavily dependent on commodity exports – had both seen falls of 50% in their exchange rates since 2014.
Jones said there had been a lack of transparency about how debts had been incurred. And he said private lenders should suffer from any restructuring agreements.
“Where there are debt crises, the risk is that the IMF will bail out reckless lenders, and the debt will remain with the country concerned,” Jones said. “Instead, reckless lenders need to be made to bear some of the costs of economic shocks through lower debt payments, allowing governments to maintain spending on essential services.” http://bit.ly/2DGdGIl
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Closing gender gaps in the world of work must remain a top priority
by International Labour Organization (ILO), agencies
Updated ILO figures show persistent inequalities between women and men on access to the labour market, unemployment and conditions at work.
Women are less likely to participate in the labour market than men and are more likely to be unemployed in most parts of the world, says a new study by the International Labour Organization (ILO) released on the eve of International Women’s Day (marked on 8 March.)
According to the World Employment and Social Outlook: Trends for Women 2018 – Global snapshot, the global women’s labour force participation rate – at 48.5 per cent in 2018 – is still 26.5 percentage points below the rate of their male counterparts. In addition, the global unemployment rate of women for 2018 – at 6 per cent – is approximately 0.8 percentage points higher than the rate for men. Altogether, this means that for every ten men in a job, only 6 women are in employment.
“Despite the progress achieved and the commitments made to further improvement, women’s prospects in the world of work are still a long way from being equal to men’s,” said Deborah Greenfield, ILO Deputy Director-General for Policies.
“Whether it is about access to employment, wage inequality or other forms of discrimination, we need to do more to reverse this persistent, unacceptable trend by putting in place policies tailored to women, also taking into account the unequal demands that they face in household and care responsibilities,” she added.
However, the snapshot signals significant disparities, depending on the wealth of countries.
For instance, differences in unemployment rates between women and men in developed countries are relatively small. Women even register lower unemployment rates than men in Eastern Europe and North America.
Conversely, in regions such as the Arab States and Northern Africa, female unemployment rates are still twice as large as men’s, with prevailing social norms continuing to obstruct women’s participation in paid employment.
Another example of these differences is that the gap in employment participation rates between men and women is narrowing in developing and developed countries while it continues to widen in emerging countries.
However, this may be a reflection of the fact that a growing number of young women in these countries have joined formal education, which delays their entry to the labour market.
The snapshot also shows that women face significant gaps in the quality of the employment they are in. For instance, compared to men, women are still more than twice as likely to be contributing family workers. This means that they contribute to a market-oriented family business, but are often subject to vulnerable conditions of employment without written contracts, respect for labour legislation and collective agreements.
And while in emerging countries the female share of contributing family workers has declined over the past decade, in developing countries it remains high, at 42 per cent of female employment in 2018, compared to 20 per cent of male employment, with no signs of an improvement by 2021. As a result, women are still overrepresented in informal employment in developing countries.
These findings also confirm previous ILO research that warned against significant gender gaps in wages and social protection.
Looking at women running businesses, the authors note that globally, four times as many men are working as employers than women in 2018. Such gender gaps are also reflected in management positions, where women continue to face labour market barriers when it comes to accessing management positions.
“Persistent challenges and obstacles for women will reduce the possibility for societies to develop pathways for economic growth with social development. Closing gender gaps in the world of work thus should remain a top priority if we want to achieve gender equality and empower all women and girls by 2030,” concluded Damian Grimshaw, Director of the ILO Research Department. http://bit.ly/2HfGoCf
Ending violence at work: Global ILO treaty. (CARE International)
Today, International Women’s Day, CARE welcomes the support from a majority of governments to establish a global treaty to end violence and harassment at work as made public in a new International Labour Organisation’s (ILO) report.
“The news that the majority of governments favour an ILO Convention means a new global treaty is in sight, perhaps as soon as next year. This is momentous and we need to see more governments and business bodies join them and the trade unions worldwide that want to bring about the best global agreement and national action possible to end violence and harassment at work,” said Glen Tarman, CARE Head of Global Advocacy.
The so-called “yellow report,” ‘Ending violence and harassment in the world of work,’ presents member States’ responses and key conclusions about the scope of a proposed global treaty. It sets the stage for initial discussions by governments, employers and workers’ representatives at the International Labour Conference, the highest decision-making body of the ILO, in May – June 2018 and the hard work therefore lies ahead of, and when, these groups gather in Geneva for this key meeting.
Given the legal gaps in how national laws and current international standards address this issue, a binding ILO Convention would provide a critical guidepost and address the challenges that women and marginalised groups face in accessing the right to work free from violence and harassment.
CARE is calling on governments, business and trade unions worldwide to join forces and adopt a global treaty in the form of an ILO Convention on violence and harassment in the world of work as a first step to building accountability and changing the narrative for women everywhere.
Such a treaty must focus strongly on the gender dimension of violence and cover workers across all sectors while encompassing situations beyond the physical workplace.
“Violence and harassment against women and girls is a global issue. More than one-third of the world''s countries do not have any laws prohibiting sexual harassment at work and millions of working women are vulnerable in the workplace yet there is no international legal standard specifically for protecting women at work from these abuses. It’s time to make workplaces safe for women everywhere,” said Milkah Kihunah, a leader of CARE’s work to promote a life free from violence for all.
CARE is encouraged by the recognition in the ILO yellow report of an inclusive, integrated and gender-responsive approach which tackles underlying causes and risk factors, including gender stereotypes, as essential to ending violence and harassment in the world of work.
CARE also welcomes the recognition by governments that there is a link between domestic violence and the world of work and the ILO Convention should also set out a commitment for measures that can contribute to ending domestic violence.
CARE supports the report’s wider consideration of the world of work beyond the physical workplace as well as the acknowledgment of violence and harassment affecting workers’ psychological, physical and sexual health, dignity, family and social environment.
CARE strongly agrees with the considerations regarding enforcement, monitoring and victim support as well as workers and their representatives taking part in the design, implementation and monitoring of policies.
It is critical that women play a major role in consultations around the ILO Convention’s development and adoption, as well as in its long-term implementation in national law and regulations, and in engagement with implementation, enforcement and remediation authorities and employers. CARE calls for deliberate action by governments, employers, trade unions and civil society to ensure that women can play a strong, meaningful role and that their voices are heard and acted upon. http://bit.ly/2IokvSp
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