{"id":99669,"date":"2026-05-06T00:00:37","date_gmt":"2026-05-06T00:00:37","guid":{"rendered":"https:\/\/www.europesays.com\/iran\/99669\/"},"modified":"2026-05-06T00:00:37","modified_gmt":"2026-05-06T00:00:37","slug":"what-has-iran-got-to-do-with-the-debt-crisis","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/iran\/99669\/","title":{"rendered":"What has Iran got to do with\u00a0the\u00a0debt\u00a0crisis?\u00a0"},"content":{"rendered":"

The illegal attacks by the US and Israel\u00a0on Iran and Lebanon have caused massive destruction, claimed thousands of\u00a0lives\u00a0and put countless more at risk.\u00a0And the closure of the\u00a0Strait of Hormuz is having devastating economic\u00a0impacts\u00a0across the world.\u00a0This is being\u00a0felt\u00a0especially in countries\u00a0already suffering from high debt payments.\u00a0Even if the Strait reopens, these impacts will continue to be felt for many months and years to come.<\/p>\n

A sudden fall in oil supply\u00a0means\u00a0a reduction in oil consumption. Many countries, particularly in Asia,\u00a0have taken\u00a0drastic steps to reduce oil use.\u00a0Pakistan\u00a0closed schools<\/a>\u00a0in March and asked people to work from home.\u00a0Sri Lanka\u00a0declared every Wednesday a public holiday<\/a>\u00a0to conserve fuel.\u00a0<\/p>\n

Globally, everyone is\u00a0impacted\u00a0as our economic system is built on\u00a0price\u00a0being used to reduce consumption when supply falls. Because oil\u00a0remains\u00a0a necessity for many, the price must rise a lot to reduce consumption, and those on the lowest incomes are\u00a0hit\u00a0the hardest.<\/p>\n

\"\"<\/p>\n

Some governments try to cushion the impact, reducing taxes or increasing subsidies. It\u00a0is costing Zambia $200 million<\/a>\u00a0to suspend duty on petrol and diesel imports for three months. This is the equivalent of 15% of\u00a0Zambia\u2019s\u00a0annual health spending and will be paid for by Zambia taking on more debt.\u00a0<\/p>\n

Even more devastating than the fall in oil supply could be the impact on food. Gas is a key input to the production of chemical fertilisers, with around 10% of global fertiliser supply coming from the Persian Gulf. Countries in Asia and East Africa<\/a> are heavily dependent on fertiliser from the region, while gas price increases push up the cost of fertiliser everywhere. Less available and more expensive fertiliser will mean less available and more expensive food.<\/p>\n

This energy and food crisis comes after\u00a0a succession\u00a0of such shocks in recent years.\u00a0These have helped push lower-income country\u00a0external\u00a0debt payments\u00a0to\u00a0the highest level since\u00a01990<\/a>.\u00a0\u00a0<\/p>\n

Paying external debt\u00a0and\u00a0importing\u00a0fuel,\u00a0fertiliser\u00a0and food\u00a0requires\u00a0countries to\u00a0earn money from the rest of the world.\u00a0A country can only buy something from the rest of the world, or pay debts to them, if they\u00a0sell something in return.\u00a0But countries have a limited\u00a0amount\u00a0of things they can sell.\u00a0<\/p>\n

This means that as debt payments increase, and the cost of energy,\u00a0fertiliser\u00a0and food\u00a0rises,\u00a0there is less money\u00a0to pay for other necessities as well, such\u00a0as medicines.\u00a0The deadly combination of a shortage of necessities at the same time as high debts\u00a0could cause large-scale suffering and turmoil. More debt may\u00a0be\u00a0taken on\u00a0to cushion the blow, which will ensure that the costs are felt now and in the future.\u00a0<\/p>\n

And that debt comes at\u00a0an increasingly high\u00a0price.\u00a0\u00a0<\/p>\n

Global interest rates have risen,\u00a0as speculators expect\u00a0central\u00a0banks\u00a0to raise rates\u00a0in an attempt to\u00a0limit future inflation.\u00a0Some lower-income\u00a0country\u00a0debt has floating interest rates, which means the\u00a0amount paid in interest increases\u00a0immediately.\u00a0All debt borrowed since the attacks on Iran began will have higher interest rates than\u00a0previous\u00a0borrowing.\u00a0<\/p>\n

The current crisis is being exacerbated by the impacts of the climate emergency, higher interest rates following Russia\u2019s invasion of Ukraine and the Covid pandemic.<\/p>\n

The need for debt cancellation\u00a0is greater and more urgent than ever.<\/p>\n

Read more: Statement by global civil society\u00a0organisations\u00a0\u201cStop the war, support impacted countries and cancel the debt<\/a>\u201d\u00a0\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"The illegal attacks by the US and Israel\u00a0on Iran and Lebanon have caused massive destruction, claimed thousands of\u00a0lives\u00a0and…\n","protected":false},"author":2,"featured_media":99670,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[34848,31481,3509,34],"class_list":{"0":"post-99669","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-iran","8":"tag-debt-crisis","9":"tag-homepage","10":"tag-interest-rates","11":"tag-iran"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@iran\/116524693783362236","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/99669","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/comments?post=99669"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/99669\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media\/99670"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media?parent=99669"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/categories?post=99669"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/tags?post=99669"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}