ActionAid says wealthy nations owe Bangladesh $5.8 trillion for climate damage

The report outlines Bangladesh’s external debt, while significant, pales in comparison to the amount it is owed for climate damages

A new report from ActionAid International has revealed that Bangladesh, already grappling with a foreign debt crisis of $78 billion, is owed an astounding $5.8 trillion in climate compensation by wealthy, polluting nations.

The organisation released the special report titled “Who Owes Who" during the African Union summit in Addis Ababa, the capital of Ethiopia, in the second week of February.

The report outlines that Bangladesh’s external debt, while significant, pales in comparison to the amount it is owed for climate damages.

Using emissions data from 1992 -- 2010 US dollars equivalent -- the report estimates that Bangladesh is entitled to $5.8 trillion in compensation for the environmental toll caused by the world's wealthiest nations.

A more expansive estimate, considering emissions since 1960, raises this figure to $7.9 trillion.

The report underscores the escalating crisis surrounding Bangladesh's foreign debt, urging the immediate alleviation of this financial burden. It also calls for a broader conversation on “global economic justice”.

Drawing from the 2004 accounts, the report raises alarms over Bangladesh's foreign debt repayment obligations.

The debt crisis in Bangladesh is stark, with 16.9 percent of national revenue directed toward repaying external loans, according to the report’s analysis of 2004 data.

In contrast, a mere 3.08 percent of the country’s budget is spent on health, and 11.73 percent on education.

These financial pressures, the report suggests, are depriving Bangladesh of vital public services, including critical health, education, and climate programmes, as it struggles to meet the demands of both foreign creditors and the effects of climate change.

In contrast, rich countries have failed to pay Bangladesh $5.8 trillion in climate debt as climate compensation. The report highlights that this is hampering the country's overall development.

ActionAid highlights the broader issue of debt in low-income countries, noting that, as of 2024, 54 countries face similar debt traps.

These nations collectively paid $138 billion to wealthier countries in exchange for sacrificing their development prospects.

At the same time, the total compensation owed by richer nations to low- and middle-income countries for climate damage stands at $107 trillion—nearly 70 times greater than the foreign debt of these nations.

The survey presents data from more than 70 countries.

Farah Kabir, country director of ActionAid Bangladesh, criticised the failure of wealthy nations to meet their climate commitments.

"The report highlights the failure of rich countries to fulfil their climate compensation commitments. It paints a picture of the foreign debt trap of low and lower-middle income countries,” she said.

She called for a global reckoning, urging Bangladesh to break free from its colonial-era debt structure and for the international community to push for a new United Nations framework on debt relief.

Kabir also emphasised the disproportionate toll climate change is taking on women and girls in Bangladesh, who are particularly vulnerable to its impacts.