For the last three decades, countries have borrowed at a record rate, amassing debt at a faster clip than ever. As a result, developing economies’ debt-to-GDP ratios have reached dangerously high levels, and repaying that debt is becoming more expensive—due to global interest rates rising at the fastest pace in four decades. And yet, unlike individuals and businesses that run into trouble, there is no international mechanism that allows nations to declare bankruptcy.
Instead, a growing number of low- and middle-income countries must dedicate significant portions of their resources to paying off these debts, with little left over for investments that can improve lives. This isn’t just unsustainable. It’s also unequal, skewed and unfair, as the people who make these decisions are often far removed from the people who must live with their consequences.
That’s why PIH is tackling the global debt crisis, a topic that our late Co-Founder Dr. Paul Farmer wasn’t afraid to raise. After all, the money needed to deliver sustainable health care isn’t hard to find—it just isn’t being directed where it’s most needed. When poor countries are using every cent they earn to pay off their debts, that money isn’t buying food, education or health care. In fact, it’s leaving them more vulnerable to the next financial crisis. Taking on these issues isn’t just important for the world’s most vulnerable; it’s crucial to America’s global legitimacy. PIH is working to address these problems—and to support a more equitable future for all.