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Catholic organizations seek debt relief to face pandemic crisis

The global Catholic network for development and solidarity urges leading nations to face Covid-19 with cooperation

UCA News reporter

UCA News reporter

Updated: March 01, 2021 10:24 AM GMT
Catholic organizations seek debt relief to face pandemic crisis

Families in Ethiopia's Tigray region receive foodstuffs from Catholic aid agencies. (Photo: vaticannews

Catholic social justice organizations have again sought debt cancellation and financial support for underdeveloped nations to face the Covid-19 crisis.

The global Catholic network for development and solidarity, also known as CIDSE, urged the leading nations to face the health crisis with cooperation and solidarity.

In a statement ahead of the virtual G-20 Finance Ministers and Central Bank Governors meeting, 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.”

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The pandemic “has stretched healthcare systems in many poor countries beyond breaking point, left millions of people without jobs and livelihoods, and decimated economies,” Vatican News reported on Feb. 27, quoting the statement.

The crisis has exacerbated inequalities where powerful countries secure “access to vaccines and support their own economic recovery,” and their actions “compounded the challenges for many countries that were struggling with the impacts of climate change.”

Debt cancellation "is the quickest way to finance this,” the statement added.

“Permanent debt restructuring and new finance are 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.” 

CIDSE urged the G-20 nations to “support a new and significant issuance of US$3 trillion Special Drawing Rights (SDRs) by the IMF” to help all nations face the health crisis.

They also wanted “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.”

Private creditors, who still get debt payments from the poor countries, should be “compelled to participate in all debt restructuring and debt relief,” it said.

CIDSE called for “a permanent debt workout mechanism” to put in place a fair debt restructuring “with a high and unsustainable debt burden, without conditionality” for the benefit of all nations.

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