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News :: International
Devastated Nepal Daily Pays $600,000 on Debt
17 May 2015
Nepal underwent another earthquake on May 12 amid recovery from the April 25 quake. It owes billions of dollars of debt to the World Bank, the Asian Development Bank, the International Monetary Fund and foreign lenders. Anti-poverty organization Jubilee USA Network states that debt relief would aid Nepal's recovery efforts.
According to the most recent public World Bank figures, Nepal pays $594,000 a day in debt payments as cited by the religious development organization, Jubilee USA Network. World Bank figures report that Nepal owes $3.8 billion in foreign debt and in 2013 paid $217 million in debt payments, or nearly $600,000 a day. Nepal was already one of the world's poorest countries, ranking 145th out of 187 countries listed on the United Nations Human Development Index, before an April 25th earthquake hit the country killing more than 8,000 people. On Tuesday another earthquake of 7.3 magnitude killed more than 100 additional people in the country.

"It's mind-blowing that one of the poorest countries in the world, struggling with earthquake recovery, pays $600,000 a day on debt," said Eric LeCompte, Executive Director of Jubilee USA. "That's $4 million a week that could be going toward recovery and rebuilding."

As Nepal scrambles to rebuild before the approaching Monsoon Season, it finds itself in debt to the tune of $1.5 billion to the World Bank and another $1.5 billion to the Asian Development Bank. The country also owes $133 million to Japan and $101 million to China.

"The World Bank and Asian Development Bank must immediately cancel these debts," stated LeCompte, who serves on United Nations finance expert groups.

$54 million is owed to the International Monetary Fund (IMF). Nepal is one of 38 countries eligible for relief from the IMF's new Catastrophe Containment and Relief Trust (CCR). The IMF established the CCR during the Ebola epidemic to provide relief to the world's poorest countries after a natural disaster or during a health crisis. The IMF trust canceled $100 million in debt for Ebola-impacted West African countries. For an eligible country to qualify for relief, a natural disaster must impact one-third of the country's population and either destroy 25% of the nation's productive capacity or cause damage equivalent to the size of the country's economy. Nepal is likely to qualify for nearly $23 million from the IMF debt relief trust. Nepal owes the IMF $10 million in 2015 and nearly $13 million in 2016.

"This is exactly the situation the International Monetary Fund's new trust was created to address," noted LeCompte. "The money is there and it's important that Nepal get relief quickly."

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.

This work is in the public domain.
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