The blog of the Alphonsian Academy
In his speech on June 5 to the participants in the meeting “Debt Crisis in the Global South,” promoted by the Pontifical Academy of Sciences, taking advantage of the occasion of the Holy Year of 2025 that is about to begin, Pope Francis addressed the issue of the new great debt crisis that affects especially the countries of the South of the world and that, as always, generates misery and anguish, depriving millions of people of the possibility of a dignified future. Referring to the biblical tradition of debt forgiveness in the Jubilee Year (cf. Dt 15 and Lev 25) and to what St. John Paul II recalled on the occasion of the Great Jubilee of 2000 regarding foreign debt, which “is not only of an economic nature, but involves fundamental ethical principles and must find space in international law”, Pope Francis urges us to take advantage of the upcoming Jubilee as an opportunity for gestures of good will, to forgive debts or at least reduce them for the common good, inviting us not to forget “that we are only custodians and administrators, and not owners” of the goods in our possession.
Aware of the complexity of the situation, Francis also calls for the development of “a new international financial architecture that is bold and creative […] a multinational mechanism, based on solidarity and harmony among peoples, that takes into account the global significance of the problem and its economic, financial and social implications”. Therefore, “any financing would not be sufficient, but one that implies a shared responsibility between those who receive it and those who grant it. The benefit that this can bring to a society depends on its conditions, on how it is used and on the areas in which the debt crises that may arise are resolved”.
With this statement the Pope implicitly recalls two aspects that have never been adequately addressed in the long history of debt in developing countries: the effectiveness and sustainability of debt amnesties and financing granted to date by International Financial Institutions (in particular the World Bank and the International Monetary Fund) and the responsibility in managing the financing received by the governments of debtor countries, both of which can be traced back to the issue of the moral conduct of the various people responsible for managing the debt.
Regarding the first aspect, many economists, starting with Susan George, considered one of the most important scholars worldwide on the issue of hunger in the Third World and foreign debt, agree that the interventions that followed one another over time to resolve the debt crisis, which first broke out in 1982 with the declaration of insolvency of Mexico, were inadequate because they were based on incorrect assessments. In fact, it was believed that we were in the midst of a liquidity crisis and not of insolvency, which led to the preparation of those “structural adjustment plans” that, in fact, were not the solution to the debt problem, revealing themselves instead to be a way to carry out structural reforms of the debtor countries that favored a new form of colonialism of a financial nature.
As for the second aspect, it is certain that a good part of the loans received ended up in the private accounts (in Switzerland or other countries in the North of the world) of governments and politicians of those countries that received the loan, many of which were governed by real dictatorships. Furthermore, a good part of the loans were used to buy weapons and to pay the army in order to guarantee power. Added to this is that part of the loans received was used for useless constructions, which served more to provide work to companies in the North than to create development in the South, so much so that once the work was completed, many of these constructions and plants were never operational.
These situations have recently provoked major protests by young people in Kenya and Nigeria, supported by the respective Bishops of Kenya and Nigeria, who contest a situation common to most, if not all, states on the African continent, among other things already denounced in 2019 by the appeal of the Bishops of Kenya to join forces against corruption. The youth movements, of what is called “Generation Z,” detached from tribal aggregations and traditional politicians, protest against the austerity policies of their governments imposed by the “structural adjustment programs” of the International Monetary Fund, demanding greater democratic participation, more justice and social equity, fewer taxes and more work. They denounce the corruption that squanders billions and deprives them of the future, well aware that African states do not need money, but to use well the immense natural resources at their disposal and not to waste their most precious capital consisting of a largely young population.
In light of the complex and, for many, dramatic debt situation of many countries, the words of Leo XIII come to mind in 1901 when, in Graves de communi , dealing with the “social question,” he recalled: «Some think that the so-called social question is only of an economic nature; on the contrary, it is certainly mainly moral and religious, and therefore it must be resolved according to moral and religious laws». A consideration that will echo many times in the social Magisterium of the Church. Thus, Pius XI when, in the aftermath of the “great financial crisis” of 1929, «after a careful examination of the modern economy to discover the root of the present social unease», indicates as a way out «the Christian reform of morals» ( Quadragesimo anno 15). The Second Vatican Council when it recalls that «without the Creator the creature disappears» ( Gaudium et spes 36); Paul VI who reiterates: «Without a doubt, man can organize the earth without God, but “without God he can ultimately only organize it against man”» ( Populorum progressio 2); John Paul II, Benedict XVI, up to the current Pontiff who, inviting us to «rethink the question of human power, its meaning and its limits» ( Laudato si’ 28), again underlines that «a human being who claims to replace God becomes the greatest danger to himself» ( Laudato si’ 73).
Source: https://www.ilmantellodellagiustizia.it/2024/il-debito-dei-paesi-poveri-non-solo-questione-di-soldi
