Join Pope Francis’ call for debt relief
10 August 2020
Through his Easter Urbi et Orbi message of hope, Pope Francis called for the whole world to be united in the face of the global coronavirus pandemic. Urging us all to reject indifference, he called for the reduction, if not the relief, of the debt that is "burdening the balance sheet of the poorest nations."
The spread of coronavirus to countries with poor health systems will be devastating. By cancelling debt payments, this money can be diverted to the health systems and infrastructure that is desperately needed.
Out of love for our global family, CAFOD has launched a petition asking the government to ensure that the most vulnerable and marginalised people are the priority in the UK’s international efforts as well as at home. This includes working together with other world leaders to cancel all debt payments by developing countries due in 2020 as the first step towards a global debt moratorium.
As Pope Francis reminds us, together we can speak out against a ‘globalisation of indifference’. We can use our voices to call for a fair and just political response.
"May these, the most vulnerable of our brothers and sisters living in the cities and peripheries of every part of the world, not be abandoned."
There has already been some progress towards this goal. In April, the G20 group of the world’s largest economies announced that over 70 countries could stop making debt payments over the next eight months to the countries they owe. This would save around $12 billion.
This is a welcome step to help countries prepare for the devastation the coronavirus threatens to cause in the world's poorest communities, and the UK played a positive role in these negotiations. However, debts must be cancelled - not just suspended - to avoid simply postponing an economic crisis to next year.
In July, G20 leaders failed to make substantial progress and postponed decisions on areas such as debt relief or additional funding which would have given developing countries a financial lifeline at a time when many developing countries have been hit hard by the pandemic and the economic crisis that follows.
"The lack of further progress on debt relief by the G20 is a kick in the teeth for those developing countries who are struggling to respond to the health and economic crises they face.
"The failure by G20 leaders to fully cancel the crippling debts owed to them and to secure agreement to cancel or suspend multilateral and private debt will put people’s lives and livelihoods at risk. It will undermine efforts towards any economic recovery - never mind a green recovery."
Graham Gordon, Head of Policy at CAFOD
The G20 will meet again in the autumn, and the UK can still use its influence at the World Bank and the International Monetary Fund (IMF) to push them to use their considerable resources to cancel debt payments that all poorer countries owe them. We also need global cooperation on longer-term cancellation of overall debt, led by the UN, to prevent a widespread debt crisis in the global south in the near future.
Diverting funding to healthcare
It is also important that any cancellation includes the debt owed by developing countries to private banks and hedge funds. If it doesn’t, there is a risk that suspended debt payments to other countries just go to paying off debts to them instead of being used to fund healthcare.
A large chunk of the debt to these private entities is owed under UK law. The UK can use its influence by, for example, enacting emergency legislation to ensure that poorer countries are not sued for stopping debt payments in UK courts.
CAFOD's coronavirus response
At this time of crisis, your support has never been more needed. Find out about how our passionate local experts are helping the poorest of our sisters and brothers survive through unjust debt, and how we are reaching out globally with practical help to those affected by coronavirus.
Pope Francis calls us to act: "May the risen Jesus grant hope to all the poor, to those living on the peripheries, to refugees and the homeless. May these, the most vulnerable of our brothers and sisters living in the cities and peripheries of every part of the world, not be abandoned."