Rising dollar values and slumping commodity prices are putting a squeeze on some of the world's most vulnerable States
Volatility in global markets, the near-collapse of commodity markets, and rising US dollar values are making it harder for the world's poorest countries to make ends meet.
According to a new report from the Jubilee Debt Campaign, these factors will cost low-income countries $61bn (€54bn) during this year.
Countries who are dependent on commodities like oil and metals have suffered through the global commodity rout. Many of these countries are also face debt repayments in US dollars, which have gotten relatively more expensive as the dollar appreciates.
Tim Jones, economist at the Jubilee Debt Campaign commented on the report:
"Many impoverished country governments are being hit by the fall in prices for the commodities they export, and large depreciations of currencies against the dollar."
"This is reducing government revenue, and increasing the relative size of debt payments in foreign currencies. On top of this, less tax is being collected than had been expected," he continued.
The portion of government revenue paid servicing debt has increased from 6.1% to 10.8% over the past three years.
The group is calling for more to be done to help these countries ahead of IMF and World Bank meetings in the coming days:
"In the 1980s commodity prices crashed and the US dollar rose, and the result was 20 years of debt crisis and large increases in poverty. To ensure history is not repeated, urgent global action is needed to cancel debts owed to reckless lenders, tackle tax avoidance and evasion, and change global trade rules to enable countries to diversify out of basic commodities," he said.
The report compared IMF and World Bank projections from 2012 and 2013 with those from 2015.