Caritas calls on the G7 to cancel the debt of poor countries
The Group of Seven Rich Nations of the World kicked off their three-day summit in the small village of Carbis Bay in Cornwall, UK. Global recovery from the pandemic is a priority.
By Robin Gomes
It is impossible to “rebuild better” without canceling the debt of poor countries and reinvesting these funds in the response and revival of Covid-19 and to fight the climate crisis. This is the appeal that Caritas International is making to the Group of Seven Rich Nations of the World, or G7, which began a 3-day meeting on Friday in the small village of Carbis Bay in Cornwall, UK.
Britain, Canada, France, Germany, Italy, Japan and the United States, which make up the G7, are the world’s richest major democracies, close allies and major trading partners which represent about half of the world economy. The European Union, Australia, South Africa, South Korea and India are invited to the meeting.
“Covid-19 has put the endemic social injustices in the world today under the microscope. The only way to rebuild the future must be to eliminate such injustices, ”says Aloysius John, secretary general of Caritas Internationalis, the global confederation of some 165 national Catholic humanitarian and development agencies. “The G7 countries,” he said, “must lead the way in the response and recovery from Covid-19 to support those most affected by the pandemic and support a fair and green recovery. “And the first step is to make sure all debt payments are canceled, including to private creditors.” It’s the fastest way to get funding where it’s needed most, ”says Aloysius John in his appeal.
Africa’s debt problem
He points out that through its grassroots presence in some 200 countries and territories around the world, the Caritas Confederation constantly witnesses the dramatic consequences of debt on the populations of developing countries. Zambia, for example, uses 45 percent of its annual national budget to service its massive debt. “How can a country rebuild itself with such a burden? Aloysius John asks. “And how can she respond to Covid if the few resources available cannot be used to strengthen the national health system – including providers from faith-based organizations – that would store and distribute the vaccines?” “
SRD for the southern hemisphere
African governments alone are expected to pay $ 23.4 billion in debt repayments to private creditors in 2021, more than three times the cost of purchasing vaccines for the entire continent.
In this regard, Caritas draws attention to the use of Special Drawing Rights (SDRs), the reserve asset that the International Monetary Fund (IMF) makes available to member countries. It indicates that the issuance of new SDRs “would provide funding directly to the governments of the countries of the South to respond to the current crises”. “The new SDRs available to advanced economies should be used to provide grants to address global challenges such as strengthening health systems, accessing vaccines and investing in a just and green recovery. The G7 should also take the climate crisis seriously, pledging to end fossil fuel subsidies.