Campaigners Raise Alarm Over ‘New Colonialism’ as Debt-Stricken Nations are Forced into Fossil Fuel Investment

By Salifu Faridat

A newly released report has drawn attention to a concerning trend where wealthier countries and private lenders are allegedly trapping heavily indebted nations in a cycle of fossil fuel dependence.

The report, compiled by anti-debt advocates Debt Justice and impacted nations, exposes how debt burdens are compelling struggling countries to continue investing in fossil fuel projects to meet their repayment obligations, often stemming from loans provided by affluent nations and financial institutions.

In response to this dire situation, a coalition of advocates is urgently calling for creditors to forgive all debts owed by countries facing crises, especially those tied to fossil fuel projects.

Tess Woolfenden, a senior policy officer at Debt Justice, highlighted how these substantial debt levels obstruct many global south countries from transitioning away from fossil fuels.

She stressed that these nations find themselves in a bind, forced to exploit fossil fuels to generate revenue for debt repayment. Unfortunately, this strategy often leads to even deeper indebtedness.

The report underscores a startling 150% surge in debt owed by global south countries since 2011. Currently, 54 nations are grappling with debt crises, allocating five times more resources to repayments than addressing urgent climate concerns.

Daniel Ribeiro, a program coordinator for Mozambique’s environmental campaign Justiça Ambiental, shared how his country’s debt doubled due to loans obtained without parliamentary approval in 2013, based on optimistic projections from gas field discoveries.

The subsequent debt crisis forced Mozambique into considering solutions dependent on repaying loans with future gas revenues, perpetuating fossil fuel dependence.

Suriname faced a similar predicament after defaulting on its debt. In 2020, creditors claimed nearly 30% of Suriname’s oil earnings until 2050.

Sharda Ganga, director of the Surinamese civil society group Projekta, expressed disappointment that this agreement contradicted the country’s climate commitments. Ganga likened this scenario to modern colonialism, where creditors wield influence over the nation’s resources.

Leandro Gómez, a campaigner at Argentina’s Environment and Natural Resources Foundation (Farn), noted that his country’s sovereignty has been eroded as it struggles to move away from fossil fuels.

Argentina is forced to subsidize fossil fuel companies, endorse fracking projects, and even cancel renewable energy initiatives to meet debt obligations.

The report also emphasized the urgent need for climate-affected nations to access grants for coping with climate change fallout. Frequently, these countries accumulate more debt to fund post-disaster repairs.

Mae Buenaventura, representing the Asian People’s Movement on Debt and Development, highlighted the interconnectedness of the climate and debt crises, both stemming from a system driven by relentless resource extraction for profit.

She stressed that debt cancellation was the minimum that affluent nations and lenders could do to mitigate this global crisis.