Debt relief campaign seeks to help impoverished countries struggling with COVID-19 pandemic avert financial ruin
As the dire economic consequences of COVID-19 have emerged, religious and secular institutions, including the Holy See, have advanced a worldwide campaign to provide debt relief for impoverished countries struggling to fight the pandemic. Their goal is to avert financial ruin for low- and middle-income countries during the crisis, and to help mitigate a global financial crisis, which experts say could be the worst since the Great Depression.
The campaign has secured temporary debt relief for many countries. But the fight is far from over.
This new campaign is inspired by previous debt relief campaigns that have become legendary for their success in gaining global momentum. The most famous of these was the Jubilee 2000 campaign.
In that campaign, global leaders, including Pope John Paul II, used the biblical concept of “jubilee” debt cancellation on special anniversaries to garner support for mass debt cancellation for impoverished countries at the turn of the millennium. The campaign was eventually able to ensure $100 billion of debt cancellation for 35 of the world’s poorest countries, allowing them to invest the money they would have paid to major organizations, such as the World Bank and International Monetary Fund, in development and anti-poverty efforts.
Subsequent debt relief campaigns were initiated for Haiti after the 2008 global financial crisis and again after Haiti’s devastating earthquake in 2010, as well as for several African nations fighting the Ebola outbreak in 2014. For these crises, the IMF created the Catastrophic Containment and Relief Trust, a fund that can cover debt payments for countries experiencing a crisis for a certain number of months. The fund relies on contributions from wealthier countries.
Following pressure from the new Jubilee campaign and other international actors, the IMF activated the use of the trust for 25 of the world’s poorest countries, canceling debts for six months. Likewise, the G20, the group of the world’s 20 largest economies, suspended debt payments to the end of the year for 73 primarily low-income countries.
Jubilee USA Network, the U.S. branch of the international Jubilee movement, representing over 700 religious organizations, has called this short-term debt cancellation a “positive step,” but argues that much more needs to be done to expand access to financial relief for these and other countries whose economies will be devastated by the financial crisis and left unable to recover in the long term.
Eric LeCompte, director of Jubilee USA Network, said, “All of the countries [chosen to receive debt relief] could benefit from more than a six-month debt cancellation. As the poorest countries in the world, they really need full cancellation [of their debts].”
On Easter Sunday, Pope Francis reiterated his support for the debt relief campaign, saying, “May all nations be put in a position to meet the greatest needs of the moment through the reduction, if not the forgiveness, of the debt burdening the balance sheets of the poorest nations.”
Faith in Action:
• Learn about U.S. Jubilee debt relief campaign: https://www.jubileeusa.org/
• Read Pope Francis’ words in support of the campaign: https://bit.ly/PopeDebtRelief
• Sign the petition to the IMF to cancel debts for low- and middle-income countries so those countries will have more money to invest in their response to the coronavirus pandemic. https://maryknollogc.org/alerts/urgent-tell-imf-stop-global-coronavirus-economic-crash
The Maryknoll Office for Global Concerns, based in Washington, D.C., is a resource for Maryknoll on matters of peace, social justice and integrity of creation, and brings Maryknoll’s mission experience into U.S. policy discussions. Phone (202) 832-1780, visit www.maryknollogc.org or email firstname.lastname@example.org.
To read more columns by MOGC, go to “World Watch.”
Featured Image: People receive food distributed through a Haitian government program in Port-au-Prince, Haiti, in April 2020 amid the COVID-19 pandemic. (CNS/Jeanty Junior Augustin, Reuters)