Decolonising COVID-19: delaying external debt repayments
Authors: Mishal Khan, Sarah Shanks
Journal: The Lancet Global Health (2020)

In response to the timely editorial by The Lancet Global Health1The Lancet Global HealthDecolonising COVID-19.Lancet Glob Health. 2020; 8: e612Summary Full Text Full Text PDF PubMed Scopus (15) Google Scholar reflecting on the ongoing colonisation of medicine, economics, and politics, we highlight an important mechanism through which the COVID-19 pandemic is allowing external agencies to gain more control over the health-care financing in low-income countries. There is currently unprecedented political momentum for low-income countries to achieve essential reforms by investing 1–2% of their gross domestic product from 2021 to 2023 towards building universal, publicly financed health systems that cover their entire populations.2Yates R Let's emerge from COVID-19 with stronger health systems.www.chathamhouse.org/expert/comment/lets-emerge-covid-19-stronger-health-systemsDate: March 26, 2020Date accessed: April 28, 2020Google Scholar However, external debt repayments that are currently being negotiated are threatening this opportunity to realise universal health coverage (UHC), and will weaken the health systems in many countries. On April 15, 2020, G20 finance ministers announced a debt service suspension initiative (DSSI) in response to the COVID-19 pandemic,3G20 announces deal on suspension of debt payments.jubileedebt.org.uk/press-release/g20-announces-deal-on-suspension-of-debt-paymentsDate: April 14, 2020Date accessed: April 28, 2020Google Scholar which applies to 77 countries that are either part of the World Bank International Development Association programme, or the least developed countries as defined by the UN. Governments in the majority of these countries have already struggled to increase investments in health; 45 countries spent more on external debt payments than on health care in 2019, with percentage of government revenue spent on debt repayment exceeding health-care expenditure by 20–36% in 8 countries (figure).4Sixty-four countries spend more on debt payments than health.jubileedebt.org.uk/press-release/sixty-four-countries-spend-more-on-debt-payments-than-healthDate: April 12, 2020Date accessed: April 28, 2020Google Scholar To free up financial resources to address COVID-19, these countries can apply for the postponement of their principal debt and interest payments from May 1 to Dec 31, 2020. However, their debt will not be cancelled and will become due between 2022 and 2024.5G20G20 finance ministers and central bank governors meeting.g20.org/en/media/Documents/G20_FMCBG_Communiqu%C3%A9_EN%20(2).pdfDate: April 15, 2020Date accessed: April 28, 2020Google Scholar In fact, deferred payments will be adjusted to ensure creditors face no losses at the time of repayment; therefore, countries will have to repay more at the end of the suspension. This means that countries that take up the offer of postponed repayments now—in order to invest in COVID-19 control measures that will ultimately protect all countries—will be penalised through larger debt repayments at a crucial time for investing in health systems. Furthermore, low-income countries that enter into the DSSI will be subject to conditionalities on their budget allocation decisions from external agencies, and there is clear evidence from previous debt relief initiatives that conditionalities impede progress towards UHC.6Stubbs T Kentikelenis A Stuckler D McKee M King L The impact of IMF conditionality on government health expenditure: a cross-national analysis of 16 west African nations.Soc Sci Med. 2017; 174: 220-227Crossref PubMed Scopus (77) Google Scholar There is a strong movement to decolonise global health. We must not let debt repayments become a mechanism through which the COVID-19 crisis strengthens the influence of external forces on low-income countries. We declare no competing interests.