Vanuatu Owes Millions in Debt as Island Nation Struggles to Recover from Monster Cyclone; Religious Coalition Calls for Debt Relief
Island nation struggles to recover from damaging cyclone, Religious coalition calls for debt relief for Vanuatu
The religious anti-poverty organization Jubilee USA Network is calling on international lenders to grant debt relief to Vanuatu. In mid-March, Cyclone Pam struck the string of small Pacific islands with winds up to 165 miles per hour. The category 5 storm destroyed or damaged nearly every building in the capital city and wiped out crops across the country. The United Nations warns that entire islands are facing imminent starvation and its President says the "monster" storm undid the nation's recent economic development. Vanuatu owes approximately $84 million to international lenders, including nearly $10 million to the World Bank.
"The World Bank and other international lenders can reduce Vanuatu's debt," said Eric LeCompte, Jubilee USA Network's Executive Director. "Vanuatu's people will need every single dollar they can get to rebuild."
Jubilee USA recently led a successful campaign to win debt relief for Ebola-impacted countries. In February, the International Monetary Fund (IMF) announced $100 million in debt relief for Guinea, Liberia and Sierra Leone. The IMF offered debt relief by creating the Catastrophe Containment and Relief Trust (CCR) to offer grant-like financing and debt relief to countries impacted by health crises and natural disasters. Although Vanuatu does not owe money to the IMF, the country cannot access grant financing from the trust because the country narrowly misses the income criteria for CCR relief. Thirty-eight of the world's poorest countries are eligible, but only two small-island nations currently fit the criteria of the special fund. Many small island states are heavily indebted and particularly vulnerable to strong storms.
"Small islands sit at the intersection of climate change, poverty and debt," noted LeCompte. "The World Bank needs to offer debt relief."
Vanuatu struggled with poverty before the storm hit and is ranked 131st out of 187 countries in the United Nations Human Development Index. The storm decimated the island's infrastructure. Aid workers report that desperate residents are drinking sea water and food supplies are running low. The United Nations Children's Fund (UNICEF) says 82,000 children are in need of aid and the country's remote location is making international relief efforts more difficult. UNICEF says those children are located on 22 different islands.
"Vanuatu's recovery is crippled by high debt burdens," said LeCompte who serves on United Nations finance expert groups. "The world can't turn a blind eye to the stark reality on the ground. A sustained recovery must include debt relief."
Jubilee USA Network is an alliance of more than 75 US organizations and 400 faith communities working with 50 Jubilee global partners. Jubilee's mission is to build an economy that serves, protects and promotes the participation of the most vulnerable. Jubilee USA has won critical global financial reforms and more than $130 billion in debt relief to benefit the world's poorest people. www.jubileeusa.org