Crisis in Egypt and Pakistan and debtors around the world
According to Debt Justice, in 2023, 91 countries worldwide will spend an average of 16.3% of their revenues on external debt. This is an increase of almost 150% since 2011 when the figure was 6.6%. Sri Lanka has the most to pay towards external debt this year, equaling 75% of the government’s revenue. This is followed by Laos (65.6%), Dominica (57.8%) and Pakistan (46.7%).
Meanwhile, a study by the international charity ActionAid revealed that 93% of the countries in the Global South suffering the most from a warming planet are also at very high risk of debt. This includes Somalia, Malawi, Mozambique, Ghana and Pakistan. 38 out of 63 countries most vulnerable to climate change are cutting spending on essential public services to handle debt. You can hear about the effects of climate change and Pakistan’s debt in our podcast and discussion on YouTube.
To support the authorities and their compatriots, the Pakistani diaspora sent $2.5 billion to the country in March this year, responding to the cash-strapped government’s call for more hard currency transfers. The money flowed mainly from Pakistanis living in the US, UK and the Middle East. Meanwhile, the economic crisis in Egypt is destroying the traditions there – lavish bachelor parties, multi-day weddings and funerals, on the occasion of which food was generously distributed. Households can increasingly rarely afford to bake the traditional baladi bread, a staple of every Egyptian table. The price of grain has risen by 70% a year, and bread can be obtained from bakeries run and subsidised by the government.
