Debt Relief Needed to Help Poor Countries Amid a Pandemic
Supporters of debt relief for the world’s poorest countries call on international policymakers to cancel debt payments and expand debt relief for developing countries to strengthen health care and protect vulnerable people and workers during the coronavirus pandemic.
The request from more than 100 organizations, including more than two dozen Catholic religious congregations, came in a letter to the International Monetary Fund, representatives of 20 industrial and emerging economies, or G-20 countries, and President Donald Trump .
It comes before the opening today of the World Health Assembly, the decision-making body of the World Health Organization. The global pandemic response will be the main topic of the meeting, which has been rescheduled to take place online.
Assembly decisions are likely to affect upcoming G-20 and Group of Seven meetings this summer.
Eric LeCompte, executive director of Jubilee USA, an alliance of faith-based development and advocacy groups that drafted the letter, said action on debt cancellation would allow poor countries to devote more resources to responding to the letter. the pandemic.
The G-20 countries have agreed to suspend payments of debt owed to them by 76 of the world’s poorest countries. The agreement covers payments until 2020.
Canceling debt and suspending payments was one of four policies that advocates said were necessary to prevent a severe financial crisis from overwhelming the global economy, LeCompte said.
Other issues raised in the letter include:
– Identify additional revenues that countries can exploit to respond to the economic and health impacts of the pandemic.
– Improve debt restructuring and implement moratoriums on the payment of the debt of countries affected by the coronavirus.
– Support all countries as they emerge from the crisis “with more resilience by promoting policies and agreements to increase protections for vulnerable people, instill greater transparency of the public budget, implement the financial crisis and market protections, promote responsible lending and borrowing, and fight corruption and tax evasion. “
LeCompte said such measures would promote a global economic recovery and “protect us all from the financial crisis.”
He added that he believed these actions would prevent future financial crises that could be caused by another pandemic, economic upheaval or massive food shortage.
“If we don’t have a process in place, we are setting ourselves up for failure again,” he said.
Pope Francis in his traditional paschal message “urbi et orbi” (to the city and to the world) called for the cancellation, or at least a reduction, of the external debt of the poorest nations of the world.
The Pope has also set up a Covid-19 Response Commission within the Dicastery for Integral Human Development to examine the challenges the world faces in tackling the pandemic and what it will inevitably face as a result of this one.
Among its tasks, the commission examines the debt of the world’s poorest countries, joining the plea of Pope Francis and a wide variety of leaders to call for debt relief, either through suspension of payments or through outright debt cancellation.