Wealthy Group of Seven nations owe low- and middle-income countries $13.3 trillion in unpaid development aid and climate funding, according to an Oxfam International analysis published Wednesday, two days before the start of the 49th annual G7 Summit.
Despite failing to meet their own obligations, G7 countries and their rich bankers are demanding that developing nations pay a combined $507 billion in debt repayments through 2028, Oxfam noted, thereby imposing devastating austerity on the Global South. The large sums of money currently allocated to debt repayments—collectively totaling about $232 million per day—could instead be spent on healthcare, education, climate action, and more.
"Wealthy G7 countries like to cast themselves as saviors but what they are is operating a deadly double standard—they play by one set of rules while their former colonies are forced to play by another," Oxfam International's interim executive director, Amitabh Behar, lamented. "It's do as I say, not as I do."
"It's the rich world that owes the Global South," said Behar. "The aid they promised decades ago but never gave. The huge costs from climate damage caused by their reckless burning of fossil fuels. The immense wealth built on colonialism and slavery."
"The G7 must pay its due. This isn't about benevolence or charity—it's a moral obligation."
Recent peer-reviewed research detailing how the prioritization of capitalist class interests has reproduced inequality between nations over time found that the Global North has "drained" more than $152 trillion from the Global South since 1960, and climate justice advocates stress that this plunder is reflected in rich countries' outsized share of historic and present greenhouse gas pollution.
According to Oxfam's new analysis, planet-heating emissions attributed to the G7 inflicted $8.7 trillion in climate change-related loss and damage on developing countries between 1979 and 2019—a figure that has since increased and will continue to grow.
At the United Nations COP27 climate conference last year, delegates agreed to establish a loss and damage fund after failing to commit to phasing out the fossil fuels causing so much harm. It remains to be seen how the new fund will operate, but Oxfam on Wednesday condemned G7 members for continuing to push for public investment in fracked gas and oil development despite vowing to wind down climate-wrecking dirty energy production at a faster rate.
Previous efforts to facilitate climate aid from the Global North to the Global South have fallen far short of what's needed due to the stinginess of wealthy countries, especially the United States.
In 2009, developed nations agreed at COP15 to allocate $100 billion in green finance per year to the developing world by 2020 and every year after through 2025, at which point a new goal would be established. However, only $83.3 billion was mobilized in the first year, and governments are not expected to hit their annual target, which has been denounced as woefully inadequate, until this year.
Based on Oxfam's calculations, the G7 is $72 billion behind on the pledge to help impoverished countries ramp up clean energy and respond to increasingly frequent and intense extreme weather.
Oxfam's $13.3 trillion estimate is based on a combination of the $8.7 trillion in uncompensated climate destruction caused by the G7 since 1979 and its $72 billion climate finance shortfall, plus nearly $4.5 trillion in unfulfilled development funding.
In 1970, rich nations including the G7 agreed to spend 0.7% of their gross national income (GNI) on Official Development Assistance (ODA). As of last year, however, they had provided just 0.27%. For their part, G7 members contributed a total of $2.8 trillion in ODA from 1970 to 2022, leaving a cumulative gap of $4.49 trillion between what they promised and what they've delivered.
"This money could have been transformational," said Behar. "It could have paid for children to go to school, hospitals, and lifesaving medicines, improving access to water, better roads, agriculture and food security, and so much more. The G7 must pay its due. This isn't about benevolence or charity—it's a moral obligation."
The upcoming G7 meeting, held this year in Japan, gives members of the powerful club a perfect opportunity to make good on their unmet commitments to uplift the poor, Oxfam said.
"G7 leaders are meeting at a moment where billions of workers face real-term pay cuts and impossible rises in the prices of basics like food," Oxfam pointed out. "Global hunger has risen for a fifth consecutive year, while extreme wealth and extreme poverty have increased simultaneously for the first time in 25 years."
"Two hundred fifty-eight million people across 58 countries are currently experiencing acute hunger, up 34% over the last year," the organization continued. "In East Africa alone, drought and conflict have left a record 36 million people facing extreme hunger, nearly equivalent to the population of Canada. Oxfam estimates that up to two people are likely dying from hunger every minute in Ethiopia, Kenya Somalia, and South Sudan."
Meanwhile, "the fortunes of the world's 260 food billionaires have increased by $381 billion since 2020," Oxfam noted. "Synthetic fertilizer corporations increased their profits by ten times on average in 2022. According to the IMF, the 48 countries most affected by the global food crisis face an additional $9 billion in import bills in 2022 and 2023."
"The G7 is home to 1,123 billionaires with a combined wealth of $6.5 trillion," said Oxfam. "Their wealth has grown in real terms by 45% over the past ten years. A wealth tax on the G7's millionaires starting at just 2%, and 5% on billionaires, could generate $900 billion a year. This is money that could be used to help ordinary people in G7 countries and in the Global South who are facing rising prices and falling wages."
Oxfam called on G7 governments to take the following steps immediately:
- Cancel debts of low- and middle-income countries that need it;
- Return to the 0.7% of GNI aid target, pay off aid arrears, and meet their commitment to provide $100 billion annually to help poorer countries cope with climate change;
- Bring in new taxes on rich individuals and corporations; and
- Expedite the reallocation of at least $100 billion of the existing Special Drawing Rights (SDR) issuance to low- and middle-income countries and commit to at least two new $650 billion issuances by 2030.
"Each and every day, the Global South pays hundreds of millions of dollars to the G7 and their rich bankers. This has to stop," Behar said. "It's time to call the G7's hypocrisy for what it is: an attempt to dodge responsibility and maintain the neo-colonial status quo."
The need for debt relief and redistribution is only poised to grow.
"At least an additional $27.4 trillion is needed between now and 2030 to fill financing gaps in health, education, social protection, and tackling climate change in low- and middle-income countries," Oxfam estimates. "That equates to an annual financing gap of $3.9 trillion."