You might not have heard of it before, but the International Development Association (IDA) is one of the most efficient ways we promote sustainable, successful international development. ONE is calling on world leaders to show up for IDA in a big way – so what\u2019s it all about? <\/p>\n\n\n\n
Debt: Small word, big implications. Chances are you\u2019re no stranger to the pressure of debt! According to the US Department of Labor, 77% of American households have some kind of debt. Maybe that\u2019s a home loan, a car payment, student loans, medical bills, credit card debt, or, likely, a mix of several kinds.<\/p>\n\n\n\n
Countries also have debt \u2013 and that\u2019s where ONE comes in. 35 countries are in or at high risk of debt distress, meaning there\u2019s a high likelihood that that country will default. 21 of those countries are in Africa, and if the 13 riskiest of those countries default on their debt, 16 million more people could be pushed into extreme poverty.<\/p>\n\n\n\n
Imagine it\u2019s the early 2010s. You\u2019re the leader of an African country. Your population is rapidly increasing \u2013 a quarter of the world\u2019s population will be African by 2050 \u2013 and you have huge infrastructural needs to accommodate that growth. You\u2019re in luck: Interest rates are super low right now, meaning you can borrow money very cheaply to fund those projects. <\/p>\n\n\n\n
Here\u2019s the problem: Ten years later, some once-in-a-generation shocks are going to totally flip the script.<\/p>\n\n\n\n
Covid-19 disrupted health systems and economies in countries around the world. Just as we started to return to a semblance of normalcy post-pandemic, Russia invaded Ukraine, which thwarted grain exports and sent food prices soaring. As bigger global economies, like ours here in the US, tried to stave off economic crisis at home, interest rates grew higher and higher and those cheap loans we were just talking about? They\u2019re now pretty hard to repay. <\/p>\n\n\n\n
ONE\u2019s research found that, right now, more money is flowing out of developing countries as debt repayments than flows in as aid or investment, forcing leaders to make tough choices about what to prioritize. The result: 40 percent of the world\u2019s population lives in a country that pays more in debt repayments than it does on the health or education of its people.<\/p>\n\n\n\n