Catholic agencies urge G20 nations to provide debt relief amid pandemic

Catholic agencies urge G20 nations to provide debt relief amid pandemic

The Vatican News Agency in and article written by Lisa Zengarini reports that a host of Catholic organizations renew calls for rich nations to cancel debt and offer financial support for developing nations as they struggle with massive debt loads during the Covid-19 pandemic.
 

Catholic social justice organisations have renewed their call for debt cancellation and financial support to poorest countries in the light of the current Covid-19 crisis.  In a statement published ahead of the G-20 Finance Ministers and Central Bank Governors meeting, which took place Friday in a virtual format, the international Catholic network for development and solidarity (CIDSE) urged the world’s leading economies to respond to the crisis with global cooperation and solidarity.

They highlighted Pope Francis’ words that “it cannot be expected that the debts which have been contracted should be paid at the price of unbearable sacrifices.”

Breaking point

CIDSE notes that “as well as the tragic loss of life, Covid-19 has stretched healthcare systems in many poor countries beyond breaking point, left millions of people without jobs and livelihoods, and decimated economies.”  

According to the Catholic network, the crisis has exacerbated existing inequalities “whereby more powerful countries can use their position and power to secure access to vaccines and support their own economic recovery.” It has also “compounded the challenges for many countries that were struggling with the impacts of climate change.”

The organizations pointed out that “the immediate priority for all countries is to save lives and support livelihoods, and debt cancellation is the quickest way to finance this.” They added that, in the long-term, “permanent debt restructuring and new finance is needed to rebuild societies and economies that put the needs of the poorest and most vulnerable people first, care for our common home, and tackle the climate crisis.”

“We need to act in global solidarity as one human family, moving from a myopic focus of what is politically, financially and technically feasible, to concentrate on what is necessary to save lives and protect our planet for current and future generations,” they say.

Seeking permanent solution

CIDSE therefore urges immediate action from the G-20, namely to “support a new and significant issuance of $3 trillion Special Drawing Rights (SDRs) by the IMF, that will enable all countries to respond to the current Covid crisis and support a just, sustainable recovery” and “to extend the debt moratorium through the DSSI (Debt Service Suspension Initiative) for longer (at least 4 years) and to more countries, including those climate vulnerable countries who were already struggling to respond to added pressures of climate change.”

The Catholic network also asks that private creditors – who are currently continuing to take debt payments from countries which are struggling to respond to the needs of their citizens – should be “compelled to participate in all debt restructuring and debt relief.”

Finally, CIDSE calls for “a permanent debt workout mechanism to deliver timely, comprehensive, and fair debt restructuring to all countries with a high and unsustainable debt burden, without conditionality.”