The Silencing of Hong Kong

Credit: Anthony Kwan/Getty Images via Gallo Images

By Andrew Firmin
LONDON, Jul 4 2025 – Joshua Wong sits in a maximum-security prison cell, knowing the Hong Kong authorities are determined to silence him forever. On 6 June, police arrived at Stanley Prison bringing fresh charges that could see the high-profile democracy campaigner imprisoned for life. This is the reality of Hong Kong: even when behind bars, activists can be considered too dangerous ever to be freed.

An infamous anniversary is approaching. 30 June will mark five years since the passing of Hong Kong’s draconian national security law. Imposed on the supposedly autonomous territory by the Chinese government, the law made it a crime to call for democracy, leading to numerous jail sentences.

Last year, the Hong Kong authorities gave themselves still more powers to suppress dissent by passing another law, the Safeguarding National Security Ordinance. Already, police have used the new law to arrest over 300 people, including for such trivial offences as wearing T-shirts with protest slogans.

Democracy movement ruthlessly suppressed

The heady days of Hong Kong’s vibrant youth-led democracy movement, which erupted into large-scale protests in 2019, are a distant memory. It’s been so long now that some of those jailed have been freed from prison at the end of their sentences. But the authorities are determined to keep persecuting the most high-profile activists.

Wong’s case exemplifies the authorities’ determination to silence prominent voices. The young activist is the movement’s most famous faces. He’s been repeatedly jailed for protest-related offences going back to 2017, and has now spent over four years in prison either serving sentences or awaiting further trials. He’s now charged with conspiring to collude with foreign forces, for allegedly working with exiled democracy activists to urge international sanctions on China, a crime under the national security law.

Meanwhile, Jimmy Lai’s trial continues. The former media owner used his Apple Daily newspaper to support the democracy movement, until the authorities forced it to close in 2021. Like Wong, Lai has already received several sentences, but his current drawn-out trial is on the more serious charges of colluding with foreign forces and conspiring to publish seditious materials.

Lai, who also holds British citizenship, has been held in solitary confinement since December 2020. He’s 77 years old and in poor health, and his family are concerned that in such conditions he might not withstand the fierce heat of another summer. The authorities clearly intend for him to die in jail.

Tradition of dissent crushed

The Hong Kong of today is unrecognisable from the country once promised. When the UK handed the territory over to China in 1997, it was under a treaty in which the Chinese state committed to maintaining its separate political system for 50 years. This included guarantees to uphold civic freedoms. But China has unilaterally torn up that agreement and is determined to make Hong Kong indistinguishable from the totalitarian mainland.

On top of criminalising thousands of protesters, the authorities have thoroughly suppressed a once vibrant media. Hong Kong now stands at 140 out of 180 countries on Reporters Without Borders’ Press Freedom Index; in 2018, before the current intensive crackdown began, it was in 70th place. Recently, journalists have been subjected to a systematic campaign of anonymous harassment and intimidation. Authorities have started to target journalists and media companies for supposedly random tax audits.

In these conditions, many civil society groups, political parties and media houses have had no choice but to shut down, while international media have been forced to relocate. In April, it was the turn of Hong Kong’s oldest and biggest pro-democracy party, the Democratic Party, to close. Long a moderate voice that was careful not to speak out against China, it had nonetheless recently received warnings from Chinese state officials.

The timing reveals the authorities’ desire for absolute control. The next election for the Legislative Council, Hong Kong’s parliament, is due in December, and in democracies, parties gear up rather than close down ahead of elections. But most Legislative Council seats aren’t directly elected and only pro-China candidates are allowed to stand. With this latest party closure, the authorities are evidently intent on denying even the prospect of token opposition.

In the face of the crackdown, some democracy activists have managed to escape into exile, but there’s no safety there, since China is the world’s number one transnational repressor. In 2023 and 2024, the authorities placed a bounty on the heads of 19 exiled activists, offering rewards for their capture.

Hong Kong authorities have stripped exiles of passports, while police have targeted their families for questioning. May saw a further escalation, when police arrested the father and brother of US-based exile Anna Kwok, one of the 19 with a price on their heads.

Ever-growing control

The Chinese state’s reach now extends to the most trivial aspects of daily life. Pro-China informants report people who fall foul of laws, and there’s seemingly no act of rebellion too small to escape official notice. In June, Hong Kong police warned people not to download a mobile phone game developed in Taiwan on the grounds it was secessionist. Teachers – who must deliver a pro-China curriculum – have been instructed not to attend 4 July events organised by the US consulate, and to discourage students attending. Education minister Christine Choi Yuk-lin recently warned of the dangers of book fairs and other acts of ‘soft resistance’ in schools.

The Chinese state now holds all the cards in Hong Kong. But Hong Kong’s story isn’t just about a small territory’s loss of freedom: it’s a warning to the world about what happens when authoritarianism advances unchecked. As Wong faces the prospect of life imprisonment for the crime of calling for democracy and Lai withers in solitary confinement, the international community must review its commitment to democracy. The very least Hong Kong’s underground and exiled activists deserve is international solidarity and support to ensure their safety against attacks. As their struggle continues, the world shouldn’t look away.

Andrew Firmin is CIVICUS Editor-in-Chief, co-director and writer for CIVICUS Lens and co-author of the State of Civil Society Report.

For interviews or more information, please contact [email protected]

 


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Bitget Wallet Partners with Mastercard and Immersve to Introduce Zero-Fee Crypto Card

SAN SALVADOR, El Salvador, July 04, 2025 (GLOBE NEWSWIRE) — Bitget Wallet has teamed up with payments leader Mastercard and infrastructure provider Immersve to launch a new crypto–linked card that allows users to make payments directly from their digital wallets at the more than 150 million merchants that accept Mastercard globally. The product aims to drive ease of use and efficiency in the crypto card space.

The card will be available through the Bitget Wallet app and supports real–time funding via onchain swaps and deposits. Leveraging Mastercard Digital First technology, users can apply for the card digitally and within minutes add it to their mobile wallets for use at both physical and online merchants.

Powered by Immersve, a Mastercard–licensed issuer, transactions are settled onchain through crypto to fiat conversion while adhering to Mastercard's regulatory framework, including KYC and AML requirements. The card will first be rolled out in the United Kingdom and European Union, with plans to expand to Latin America, Australia, and New Zealand in the coming months.

The launch comes amid continued interest in practical crypto applications and efforts by the payments ecosystem to connect blockchain–enabled solutions to the financial mainstream. Bitget Wallet, which reports over 80 million users globally, is positioning the card as a way to extend self–custodied assets into everyday commerce. The product also includes optional incentives such as transaction–based rewards, yield on idle balances in wallet, and one–time bonuses for completing identity verification.

“Crypto payments should be as seamless and secure as traditional transactions. With this partnership, Bitget Wallet users can now pay with crypto anywhere Mastercard is accepted,” said Jamie Elkaleh, CMO at Bitget Wallet. “We're seeing massive demand for real–world crypto utility, and this collaboration with Mastercard and Immersve provides the infrastructure to make that vision a reality.”

“Digital wallets are quickly becoming as ubiquitous as email addresses. At Mastercard, we're committed to working with innovative companies like Bitget Wallet and Immersve to make crypto transactions simple, secure, and accessible at scale,” said Scott Abrahams executive vice president, Global Partnerships at Mastercard. “This is a critical step in bringing digital assets closer to mainstream utility.”

“Partnering with forward–thinking teams like Mastercard and Bitget Wallet is exactly how we scale real–world crypto use,” said Jerome Faury, CEO of Immersve.We're bridging the gap between Web3 and traditional finance, allowing users to spend crypto as easily as they spend fiat—on a global scale.”

For more information on how Bitget Wallet is enabling seamless crypto payments, visit Bitget Wallet website web3.bitget.com and blog.

About Bitget Wallet
Bitget Wallet is a non–custodial crypto wallet designed to make crypto simple, seamless and secure for everyone. With over 80 million users, it brings together a full suite of crypto services, including swaps, market insights, staking, rewards, a DApp browser, and crypto payment solutions. Supporting 130+ blockchains, 20,000+ DApps, and a million tokens, Bitget Wallet enables seamless multi–chain trading across hundreds of DEXs and cross–chain bridges. Backed by a $300+ million user protection fund, it ensures the highest level of security for users' assets. Its vision is Crypto for Everyone — to make crypto simpler, safer, and part of everyday life for a billion people.

For more information, visit: XTelegramInstagramYouTubeLinkedInTikTokDiscordFacebook

About Immersve
Immersve is a principal member of the Mastercard network. Its issuing–as–a–service platform supports both centralised and decentralised payment experiences. Exchanges, web3 wallets and DeFi protocols can easily integrate with Immersve's APIs and smart contracts to transact anywhere Mastercard is accepted. Immersve is a registered Financial Services Provider. For more information on the APIs go to docs.immersve.com.

Join our waitlist and Discord community for more information: https://discord.gg/HZZJjsBk

About Mastercard www.mastercard.com
Mastercard powers economies and empowers people in 200+ countries and territories worldwide. Together with our customers, we’re building a resilient economy where everyone can prosper. We support a wide range of digital payments choices, making transactions secure, simple, smart and accessible. Our technology and innovation, partnerships and networks combine to deliver a unique set of products and services that help people, businesses and governments realize their greatest potential.

Media Contacts:
Mastercard Communications Contact: [email protected]
Bitget Communications Contact: [email protected]

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/eca20f1d–d156–4594–a96b–dc99ee024060


GLOBENEWSWIRE (Distribution ID 1001116421)

Lessons from South Africa on Monitoring the Impact of Invasive Trees on Water Resources

In catchment areas of the Western Cape Water Supply System, critical for the water supply to Cape Town, invasive trees are responsible for the loss of up to 55 million cubic meters of water per year—equivalent to about two months’ water supply for the city. If not managed, this loss could increase to 100 million cubic meters per year by 2045.

The International Union for Conservation of Nature (IUCN) estimates that the minimum economic cost of biological invasions globally from 1970 to 2017 is USD 1.2 trillion. Credit: Jorge Luis Baños/IPS

By Richard Bugan
CAPE TOWN, South Africa, Jul 4 2025 – Concerns about the impacts of invasive species is not new; it dates to the 19th century. The term was popularized in Charles Elton’s 1958 book “The Ecology of Invasions by Animals and Plants”. However, the concept gained significant attention in the 1990s and early 2000s as academic interest surged. This led to an increase in publications by invasion biologists.

Today, the impact of invasive species has increased significantly, with regions with fragile ecosystems being more vulnerable than others. Globally, the scale of the problem is staggering. The International Union for Conservation of Nature (IUCN) estimates that the minimum economic cost of biological invasions globally from 1970 to 2017 is USD 1.2 trillion. This figure accounts for expenses related to the prevention, reduction, or mitigation of damages caused by these species.

In Africa, a continent expected to be severely affected by climate change, the challenges posed by invasive species are expected to worsen. Among the most pressing is the spread of invasive plants, which not only endanger native biodiversity but also impact the economy, water security, food security and livelihoods.

One such example can be found in South Africa’s Cape Floristic Region, which is known for its remarkable plant diversity, where 70% of plant species are unique to this area.

In catchment areas of the Western Cape Water Supply System, critical for the water supply to Cape Town, invasive trees are responsible for the loss of up to 55 million cubic meters of water per year—equivalent to about two months’ water supply for the city. If not managed, this loss could increase to 100 million cubic meters per year by 2045.

It is evident that the Earth is approaching a tipping point in terms of biodiversity loss, and there is no time to waste. Many scientists, including myself, are deeply concerned about the impact of these water-consuming invasive trees.

Richard Bugan

As the Science, Monitoring, Evaluation, and Learning Manager for The Nature Conservancy (TNC) in South Africa, I lead a team dedicated to using sound science to monitor and evaluate the progress of the Greater Cape Town Water Fund, which was launched in 2018 by TNC and its partners as South Africa’s first Water Fund.

Our work includes tracking the hectares cleared in pursuit of our 2026 target of 59,300 hectares cleared, along with assessing the associated water benefits and biodiversity impacts (for both freshwater ecosystems and the recovery of native fynbos).

As of February 2025, the Water Fund has cleared 33,000 hectares (56% of the target) and completed follow-up clearing efforts across 31,000 hectares to prevent regrowth of invasive species and maintain the cleared areas. This effort has reclaimed approximately 34 million cubic meters of water per year to the benefit of both people and the environment.

TNC is committed to accurately quantifying the impact of invasive trees on water resources in South Africa. This is achieved through the application of hydrological models and infield monitoring activities. During October 2019 – February 2020, six catchments around Theewaterskloof Dam, were instrumented with streamflow and rainfall monitoring equipment. The results of this hydrological monitoring represent a unique opportunity to provide measured evidence of the water benefits achieved through the clearing of invasive trees.

But we are learning that our monitoring activities can hit a snag due to potential equipment failures, storms, and wildfires, which pose risks to their success. To address these challenges, we upgraded the paired catchment monitoring stations in December 2024 through the support of Microsoft. A new telemetry system was installed, linking each piece of equipment via radio frequency and the mobile network. This enhancement significantly reduced the risk of data loss, improved accuracy, and supported the long-term resilience of the monitoring.

After almost six years of monitoring, we are frequently asked whether clearing invasive trees is increasing streamflow. Preliminary results suggest that reference (fynbos dominated) catchments exhibit, on average, a 34% increase in annual streamflow volumes compared to invaded catchments. This represents a significant amount of water, benefiting both people and nature in this beautiful region. We are excited about these incontrovertible findings as they provide concrete evidence of the benefits derived from the removal of invasive trees.

Restoring biodiversity to its original state may take a long time. However, I am just as excited about this moment. The fact that we can contribute every day to a matter of international importance is a gradual step to success.

The author is the Science, Monitoring, Evaluation and Learning Manager (TNC South Africa)

The Rise of Islamophobia in New York’s Mayoral Elections– with the Statue of Liberty in a Burqa

By Thalif Deen
UNITED NATIONS, Jul 4 2025 – The prospect of New Yorkers electing their first Muslim Mayor, come November, has ignited a rash of paranoid statements by right-wing US politicians, including Islamophobia– the irrational fear and hatred against Islam and Muslims.

Last week, a Republican politician caricatured America’s iconic Statue of Liberty wearing a burqa– an outer garment worn by some Muslim women that covers the entire body and face. But that internet meme, spreading across social media, was deleted after protests.

And another right-winger falsely warned that Zohran Mamdani, who last month won the Democratic Mayoral primary, may introduce the Islamic sharia law into the statute books of New York city’s five boroughs—with adulterers stoned to death in public.

If that punishment becomes a reality, one cynic jokingly predicted, New York may run out of stones—as once recounted about the fallout from Sharia law in a sandy Middle Eastern desert kingdom.

Meanwhile, President Trump, not surprisingly, jumped into the fray dismissing Mamdani as “a Communist lunatic.” That remark was a grim reminder of the spread of “McCarthyism” in the US in the early 1950s: a campaign against alleged Communists in the US government and other institutions.

Led by Senator Joseph McCarthy, the campaign, which falsely accused scores of politicians and Hollywood celebrities as “Communists”, was labeled the “search for reds under every bed”.

The 33-year-old Mamdani, a Democratic socialist and a social media star, is currently a member of the New York State Assembly from the 36th district, based in the New York city borough of Queens.

At the primary elections last month, he defeated Andrew Cuomo, the thrice-elected Governor of New York state. Mamdani’s father is a professor at the prestigious Ivy League Columbia University and his mother the celebrity award-winning movie producer Mira Nair.

Mamdani was born in Kampala, Uganda and his middle name Kwame was a tribute to Kwame Nkrumah, a political theorist and revolutionary, who served as Prime Minister of the Gold Coast (later Ghana) and President, from 1957 until 1966.

Mamdani migrated to New York City when he was seven years old and graduated from the Bronx High School of Science and later earning a bachelor’s degree in Africana studies from Bowdoin College.

Dr James E. Jennings, President, Conscience International, told IPS: “If New York is really a global city, having a Muslim mayor should be a welcome development. A quarter of the world’s population and almost 10% of New York’s citizens are Muslims. Where else but in the Big Apple could the United States better demonstrate our founding principles of liberty and justice for all? he asked.

First, the horror of September 11 fascinated the world, then New York’s most disreputable playboy took charge in Washington with global repercussions. Perhaps now an exemplary US citizen like Mamdani, who happens to be a Muslim, could lead our current politics in a more rational and moral way. His election might help repair frayed ties with the world’s 50 Muslim-majority countries and lead US politics out of its current anti-immigrant jingoism, said Dr Jennings.

Prejudice against Muslims, he pointed out, is hopelessly entangled with the politics of the Middle East. A clear voice like Mamdani’s is needed to speak out for justice and repudiate the “attack first” mentality of the Netanyahu-Trump cabal that keeps the US involved in unnecessary wars and fuels the Military-Industrial Complex (MIC).

“Those in New York’s Jewish community who deplore the Likud Party’s abandonment of Israel’s founding principles and repudiate the genocide in Gaza have apparently already decided to vote for the progressive candidate”, said Dr Jennings.

Ian G. Williams, President Foreign Press Association (FPA), told IPS Mamdani’s biggest electoral asset is that when asked, he answers questions directly and factually without looking over his shoulders to see what the funders and PACs think. (Political action committees and super PACs play significant roles in federal election campaigns by raising and spending money to influence elections.)

“No hedging, no pandering no Clintonesque squirming about what the meaning of “is” is. Voters will respect the courage even if they are not totally onside with the message”, said Williams former speechwriter for Neil Kinnock, whose speeches derailed Joe Biden’s 1988 Presidential run when he was caught out in unacknowledged plagiarism.

The turning point was when he fielded the “gotcha” question and redirected it against the other candidates paralyzed by fear of AIPAC (the American Israel Public Affairs Committee, a pro-Israel lobbying group in the United States.).

When asked about going to Israel, in effect, he challenged them to explain WHY a mayor of a city with so many problems would take time off to visit an Eastern mediterranean state committing war crimes. In many ways this was more effective than chanting on a stage at Glastonbury.

It is less than a lifetime ago that JF Kennedy’s candidacy was dubious because he was a Catholic. The bigots who evoked Zohran’s Muslim background while applauding applied dogma from Opus Dei in SCOTUS are irrelevant, declared Williams, a former President of the UN Correspondents’ Association (UNCA).

Dr Ramzy Baroud, a journalist and Editor of The Palestine Chronicle, told IPS the attacks on Mamdani, a principled man with a solid following among people who are seeking value-based politics, are a strange amalgamation of all the tropes of the past: those that accompanied the McCarthyism era, those pertaining to any criticisms of Israel, and those that preceded and intensified after the September 11, 2001, attacks.

“This hodgepodge of accusations, he said, lacks a central theme, though the real, often unstated fear is that Mamdani is a danger to the ruling classes, frankly on both sides. They are simultaneously accusing him of being a communist, an Islamist, a crazy person, and an antisemite, among a long list of ridiculous accusations”.

This reflects not only the overriding racism and foolishness that continues to control political discourse in the U.S., but also a degree of desperation, said Dr Baroud.

“The fallout of this madness is that they are repeating the same lines that many Americans are fed up with and no longer accept or tolerate. In other words, the attacks on Mamdani could very much be the reason behind his potential victory in the New York Mayoral race, which in turn will further elevate and make more meaningful the overall political discourse”.

The current level of so-called political debate is arguably the most debased in history, and it seems to be getting worse with time, where the president of what is supposed to be one of the greatest democracies in the world is making physical threats to arrest and deport popular politicians for disagreeing with him. This will bode very badly for the future in the country, thus highlighting the need for Mamdani-like politicians, declared Dr Baroud.

Norman Solomon, executive director, Institute for Public Accuracy and national director, RootsAction, told IPS a gradual trend of lessening racism and increasing anti-racism in the United States, especially among younger Americans, has been a major factor in making possible Mamdani’s primary victory.

Likewise, overall, a reduction of ethnocentrism and increasing affirmation of multiculturalism in urban areas – contrary to the very real racism and xenophobia led by Donald Trump – have opened the door to electoral progress by progressives who are not white and do not fall into the category of Judeo-Christian heritage.

This is all to the good for the health of the society, and all to the good for the prospects of victory for genuinely compassionate and forward-looking political leaders like Zohran Mamdani.

But the big backlash against Mamdani’s victory and what it represents has just begun, he warned. “This is a longstanding kind of reactionary bigotry that has always been a motor force for cruelty and systemic injustice in this country”.

Mamdani’s win is a highly encouraging event that could foreshadow great progress for social justice and against Islamophobia in the United States.

Yet the hostility that this progress has provoked tells us that powerful attitudes and forces for bigotry are surging to roll back essential progress, declared Solomon, author, “War Made Invisible: How America Hides the Human Toll of Its Military Machine”

IPS UN Bureau Report

 


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Starlight Retail Joins Google Cloud Partner Advantage Program to Deliver Advanced Cloud and AI Solutions in Pakistan

LAHORE, Pakistan, July 03, 2025 (GLOBE NEWSWIRE) — Starlight Retail, a global technology solutions provider, announced today that it has joined the Google Cloud Partner Advantage program as a Partner level partner for the Service engagement model. This collaboration gives Google Cloud customers in Pakistan and across the region access to Starlight Retail’s comprehensive suite of technology services and solutions, designed to accelerate digital transformation and drive business growth.

As businesses in Pakistan increasingly look to modernize their operations, the demand for scalable, secure, and intelligent cloud solutions has grown significantly. This collaboration positions Starlight Retail to meet this demand by combining its deep expertise in custom application development and managed services with the robust, global infrastructure of Google Cloud.

As a Google Cloud partner, Starlight Retail will offer customers specialized services that leverage the scale, security, and innovation of Google Cloud’s infrastructure. This includes custom SaaS application development on Google Cloud, deployment of advanced cybersecurity measures using Google Cloud’s security portfolio, and the creation of intelligent business solutions with Google Cloud’s AI and machine learning capabilities. By working with Starlight Retail, organizations can unlock new efficiencies and capabilities, enabling them to compete more effectively in a digital–first economy.

Key features of the offering include:

  • Custom SaaS and Application Development: Building and deploying scalable, secure, and high–performance applications on Google Cloud to meet unique business requirements.
  • Advanced Cybersecurity Services: Implementing robust security postures for cloud environments, leveraging Google Cloud’s native security tools to protect critical data and infrastructure.
  • AI and Data Analytics Implementation: Helping clients unlock insights from their data and build intelligent applications using Google Cloud’s BigQuery, Looker, and Vertex AI platforms.
  • Managed Cloud Services: Providing end–to–end management of Google Cloud environments to optimize cost, performance, and reliability, allowing clients to focus on their core business.

“Joining the Google Cloud Partner Advantage program is a pivotal step in our mission to empower businesses through technology,” said Mammon Baloch, CEO of Starlight Retail. “Our presence in Pakistan is focused on helping local enterprises compete on a global scale. This collaboration allows us to combine our expertise in tailored solution delivery with the world–class infrastructure of Google Cloud so that we can provide our clients with the tools they need to innovate faster, operate more securely, and unlock new opportunities for growth.”

To learn more about how Starlight Retail can help your business leverage Google Cloud, visit or schedule a consultation today.

Starlight Retail Inc., established in 2021, is a Los Angeles, California–based global technology company. With a presence in eight countries, including Pakistan, Starlight Retail specializes in Software as a Service (SaaS), tech automation, and advanced digital solutions. The company is dedicated to transforming the tech industry through a focus on innovation, excellence, and customer satisfaction. Starlight Retail partners with prominent technology providers to offer a diverse range of solutions that enable businesses to improve efficiency, strengthen security, and foster growth in the digital age.

Media Contact:

Shehroze Abbas Shah
+92 304 1400273
[email protected]


GLOBENEWSWIRE (Distribution ID 9489352)

FfD4 at Sevilla Plants the Seeds of Debtor Unity

Pedro Sánchez, Ursula Von der Leyen, António Guterres, from left to right, at the 4th International Conference on Financing for Development. Credit: Dati Bendo/European Union

By Michael Galant
NEW YORK, Jul 4 2025 – UN Member States adopted the ‘Compromiso de Sevilla’ at the Fourth Financing for Development Forum (FfD4) which concluded July 3– the culmination of months of contentious negotiations that pitted wealthy nations against the developing world in competing visions for reform of the global economic architecture.

The wide-ranging outcome document will be met with both fanfare — from the host countries and UN officials keen to portray the process as a success — and criticism — from civil society groups lamenting the watering down of material commitments into so many toothless words. But buried in its 38 pages is a single paragraph that quietly plants the seed for a more transformative agenda:

We will establish a platform for borrower countries with support from existing institutions, and a UN entity serving as its secretariat. The platform may be used to discuss technical issues, share information and experiences in addressing debt challenges, increase access to technical assistance and capacity building in debt management, coordinate approaches, and strengthen borrower countries’ voices in the global debt architecture.

Uniting borrowing countries has long been a dream of those concerned with the imbalance of power in the global financial system. Creditors are organized into collectives like the Paris Club, they argue; so too should debtors work together to build collective negotiating power, underwritten by the threat of a coordinated default.

With two thirds of low-income and a quarter of middle-income countries in or near debt distress, a common negotiating front could not only obtain better terms of restructuring during times of crisis, but also bolster demands for lasting reforms of a failing system that keeps countries trapped in a vicious cycle of debt and underdevelopment.

This is easier said than done.

Developing countries, and the economic elites that typically govern them, are dependent on international finance, and reluctant to do anything that might spook financial markets. Simultaneously overcoming these fears in multiple countries, each with their own contexts and interests, is a tall order.

The FFD document thus conspicuously avoids the language of a “debtors’ club” or any threat of collective negotiation or default, leading instead with more neutral modes of cooperation like information-sharing and capacity-building. But even tentative steps toward cooperation can have a meaningful impact. Indeed, they have before.

In June 1984, eleven Latin American countries met in Cartagena, Colombia to coordinate their responses to the debt crisis that had by then roiled the region for two years. The resulting Cartagena Consensus was clear that it was not a “debtors’ club,” but a forum for collaboration. The group would meet five times in the years that would follow, developing common positions on the source of the crisis and the terms of its resolution.

The Cartagena Consensus is often held up as a cautionary tale for debtors considering coordination. The Group never became a fully realized “debtors’ club” capable of collective negotiation, and petered out before the crisis was resolved as creditors peeled away desperate debtors with sweetheart deals.

But even the tacit threat that a club could be in formation bore fruit. Principles developed collectively shaped early deals, the concessions from which bolstered the positions of subsequent negotiators, and less confrontational governments benefitted from gains won by the more radical.

As scholar Diana Tussie wrote at the time: “a significant improvement in the cost of the negotiated credit was achieved, spreads were reduced, rescheduling fees were drastically reduced, the cost of the loan was reduced, and the amortization period increased significantly.”

Rhetorically, the Consensus helped recast the crisis as a political one, rooted in global financial inequities and exogenous factors like rising interest rates in advanced economies, rather than a purely technocratic or moralistic question of responsible spending.

Today’s multilateral commitment to form a borrowers’ platform has advantages that Cartagena did not. While the developing world is facing a generalized debt crisis, it is not in the acute situation that beset the Cartagena Consensus, and so has an opportunity to gradually build its infrastructure under less desperate conditions.

The borrowers’ platform is to operate with UN support and a wider range of global participants. And the emergence of major new bilateral creditors, though not without its own challenges, may strengthen debtors’ negotiating hands.

Of course, the global debt challenge cannot be reduced to a zero-sum restructuring negotiation. Substantive reforms are needed to address the many faults in the debt system, from ongoing legislative efforts to combat creditor holdouts in Albany, to the establishment of a permanent multilateral sovereign debt workout mechanism — a top priority of debt relief advocates.

Yet these efforts have repeatedly been blocked by the intransigence of creditors. Movement toward reform will only be strengthened by the coordination of the countries that stand to benefit most.

A promise to establish a borrowers’ platform is far from a fully realized debtors’ club, and farther still from a panacea to the Global South’s ongoing debt crisis. But in a document short on transformative ambition, it is a concrete step toward the rebalancing of unequal power relations — and a sign that debtor countries will not submit themselves to creditor inaction forever.

Michael Galant is Senior Research and Outreach Associate at the Center for Economic and Policy Research (cepr.net) in Washington, DC.

IPS UN Bureau

 


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