26/06 • GLOBAL DEBT

The report, produced by the Pontifical Academy of Social Sciences and commissioned by Pope Francis, draws on biblical themes of justice, mercy, and the “Jubilee” tradition. This is a time when debts were forgiven and communities were given a fresh start.

The report warns that without major changes, global debt will continue to trap millions in poverty and instability.

Since the COVID 19 pandemic, the cost of borrowing money has risen dramatically. Many countries are now spending more on debt repayments than they are on healthcare, education, or food. Some are using nearly half of their income just to pay back creditors, leaving little for their people.

The report highlight some sobering and illuminating facts:

• Over 50 countries are either already in debt crisis or very close to it.
  
  
• Many low-income countries now spend 2–3 times more on debt payments than on healthcare or education.
  
  
• Private investors and banks hold much of this debt, but are not required to help when countries can’t pay.
  
  
• Rising interest rates in wealthy nations are making repayment harder for poorer ones, especially where local currencies have lost value.
  
  
• Many of the countries with the worst debt burdens are also the ones hit hardest by climate change, yet they are being asked to pay more instead of being supported.

The report calls this a “scandal”, asserting that this is a system that puts money above people. It argues that debt is not just a financial issue, but a moral one. People are going without food, education, and safety so that wealthy institutions can be repaid.

But there is hope. The report calls for a new, fairer way of dealing with debt; one based on compassion, justice, and shared responsibility.

It proposes:

• A global system that allows for debt to be reduced or cancelled when it becomes unpayable.

• Rules for all lenders, including private ones, so they must act responsibly.

• Greater transparency so everyone knows where money is going and who benefits.

• Making sure that countries can invest in their people and their futures, not just meet repayment deadlines.

Follow this link to read the report in full.