Catholic Agencies in Europe, North America Call for Debt Cancellation, Financial Support

The G20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, Japan, India, Indonesia, Italy, Mexico, Russia, South Africa, Saudi Arabia, South Korea, Turkey, the United Kingdom, the United States, and the European Union.

In making their case for debt cancellation and financial support to “poorest countries” amid COVID-19 challenges, CIDSE officials recall Pope Francis' appeal for the same consideration at the start of the COVID-19 pandemic last year.

“It cannot be expected that the debts which have been contracted should be paid at the price of unbearable sacrifices,” the Holy Father said in February 2020, and added, “In such cases it is necessary to find – as in fact is partly happening – ways to lighten, defer or even cancel the debt, compatible with the fundamental right of peoples to subsistence and progress.”

The officials of the 18-member international Catholic alliance say that today, “the words of the Holy Father are as relevant as they were then.”

Officials of the 45-year-old Belgium-based alliance of Catholic agencies are the latest to join the global call for debt relief for poor countries amid COVID-19 challenges.

In July 2020, the Holy See through its Permanent Observer to the United Nations in Geneva, Archbishop Ivan Jurkovič, urged countries to help relieve the “crippling external debt burdens” of developing countries struggling in the coronavirus pandemic.

“There is no doubt that the current COVID-19 crisis will more severely affect the lives and livelihoods of those in the developing world,” Archbishop Jurkovič told the UN trade and development board July 2.

Two months later, the leadership of All Africa Conference of Churches (AACC), an ecumenical fellowship with a presence in more than 40 African nations urged its members to put their governments to task in addressing the growing debt crisis in their respective countries, which they said has plunged African nations in a new form of slavery and taken away their sovereignty.

On their part, Catholic Church leaders in Africa joined more than 140 other Christian groups’ representatives from across the world who were calling on the International Monetary Fund (IMF) and the World Bank to cancel developing nations’ debts amid COVID-19 challenges.

Meanwhile, last November, the leadership of the Jesuit Centre for Theological Reflection (JCTR) encouraged the push for debt relief after Zambia’s external creditors denied the appeal by the Edgar Lungu-government for the suspension of the re-payments of the Eurobonds for six months.

In their February 23 one-page statement, CIDSE officials note that besides the loss of lives, the COVID-19 pandemic has also affected various aspects of people in poor countries.

“COVID-19 has stretched healthcare systems in many poor countries beyond breaking point, left millions of people without jobs and livelihoods, and decimated economies,” they note in their statement ahead of the planned meeting of G20 Finance Ministers scheduled to take place in Italy.

CIDSE leadership further says that the pandemic “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.”

COVID-19 pandemic “has compounded the challenges for many countries that were struggling with the impacts of climate change,” CIDSE officials add.

Amid these challenges, officials of the international alliance of Catholic development agencies working together for global justice call on G20 Finance Ministers “to respond to the urgency of the current crisis with global cooperation, solidarity and leadership that is needed.”

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

They want the G20 Finance Ministers to “support a new and significant issuance of $3 trillion Special Drawing Rights (SDRs) by the International Monetary Fund (IMF), that will enable all countries to respond to the current COVID crisis and support a just, sustainable recovery.”

They also want the G20 Finance Ministers “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.”

That some private creditors continue taking debt payments from countries struggling to respond to the needs of their citizens is a concern that CIDSE leadership wants the G20 Finance Ministers to address, so that the private creditors are compelled “to participate in all debt restructuring and debt relief.”

CIDSE officials also want the G20 Finance Ministers to “support 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.”

Established in 1976, CIDSE is a family of 18 Catholic social justice organizations from Europe and North America who strive to attain transformational change to end poverty and inequalities, challenge systemic injustice, inequity, destruction of nature and promote just and environmentally sustainable alternatives.