Debt cancellation is the “most immediate way to release the finance required to prevent millions of our sisters and brothers being needlessly pushed into poverty by the pandemic,” the Christian leaders say.
In making their case, the global Christian leaders refer to previous acknowledgement by the institutions’ leadership of the devastation the pandemic is causing across the world, particularly IMF officials who recognized that “many countries now face multiple crises – a health crisis, a financial crisis, and a collapse in commodity prices.”
They also recall the warning by World Bank leadership that the pandemic “threatens to push over 100 million people into extreme poverty and is exacerbating inequality throughout the world.”
The representatives of Christian leaders acknowledge the various steps IMF and World Bank officials have undertaken to respond to the crisis, including IMF leadership’s decision to cover debt payments owed over a six-month period for 28 countries as well as the availability of new emergency finance from the two bodies worth $88 billion.
While the initiatives are welcome, they are “insufficient and do not respond to the urgency and magnitude of the crisis,” the Christian leaders say in their October 12 letter, which has also been signed by the Coordinator, Economy Taskforce of the Vatican Commission for COVID-19, Sr. Alessandra Smerilli.
“Without the cancellation of debts, there remains a grave risk that developing countries will not have the money so desperately and urgently needed to halt the spread of the virus, to treat people suffering from the virus and to mitigate and recover from the economic and social destruction threatened by the virus,” they say.
The Christian leaders also note that the two global institutions “hold significant reserves in US dollars and in gold, which are held for such a time as this” and remind the leadership of the two financial entities that it is “essential that these reserves are used to relieve the burden of debts for countries in precarious need.”
“The role of the IMF and World Bank is central to tackling this crisis in a way that prioritizes the needs of the most vulnerable people, learns from the past and seeks to heal and rebuild our world,” the representatives of Christian groups say.
They add that their collective call for debt cancellation echoes similar calls by other Christian leaders such as Pope Francis who has called for “the cancellation of the debt of the most vulnerable countries, in recognition of the severe impacts of the medical, social and economic crises they face as a result of COVID-19.”
“As you meet this week, we continue to pray for you and remain committed to ongoing cooperation,” the Christian leaders tell the IMF and World Bank officials.