NEW YORK – As world finance leaders meet this week in Washington, D.C., African bishops are calling for a “viable” plan for the continent to emerge from the current economic and health crisis with “resilience,” and for decisions that promote an economically just society.
“As we work for recovery, we are not doing so in order to return to an unequal and unsustainable model of economic and social life, where a tiny minority of the world’s population owns half of its wealth as millions live below the poverty line,” said an April 20 statement from the Justice, Peace and Development Commission of the Symposium of Episcopal Conferences of Africa and Madagascar (SECAM).
“We need to develop social and economic systems that support distribution of wealth and guide humans to be inclusive of all people and eliminate economic inequality from society.”
The statement was directed to participants in the 2022 Spring Meetings of the World Bank Group and International Monetary Fund. World finance leaders convene at the meetings this week to discuss solutions to the global economic and health crises that were exacerbated by the COVID-19 pandemic over the past two-plus years, and now by the war in Ukraine.
The World Bank and IMF meetings, and the SECAM statement, coincide with the publication of the IMF’s World Economic Outlook Report and 2022 Global Financial Stability Report. Both reports give a grim outlook on the current state and immediate future of the global economy.
The World Economic Outlook Report in particular, states that the “economic damage from the (Russia/Ukraine) conflict will contribute to a significant slowdown in the global growth in 2022.” It states that global economic growth is projected to slow from 6.1 percent in 2021 to 3.6 percent in 2022 and 2023. It also states that inflation is expected to remain elevated longer than originally thought. For 2022, the report projects inflation to be at 5.7 percent in advanced economies and 8.7 percent in emerging markets and developing economies.
Emerging markets and developing economies will bear the brunt of the forecasted challenges. However, Eric LeCompte, executive director for Jubilee USA Network, told Crux that the reports are actually “really bad news for all of the countries of the world.”
LeCompte notes that food prices are already too high, countries are losing revenue, developing nations are still in the throes of the health and economic crises of the pandemic, and now, with the war in Ukraine, food, fuel and fertilizer “for to many countries is just becoming out of reach.”
“The reality is that we’re dealing with a global crisis that is intertwined between countries, so problems that are happening in southern and developing economies are going to drastically impact northern wealthy economies,” LeCompte said, noting, for example, that the debt crisis in the developing world contributes to high inflation in the developed world, and a failure to meet global vaccination targets will create more economic shocks that will impact wealthy countries.
Jubilee USA Network is a coalition of religious, development and advocacy groups that focuses on policies to help end poverty worldwide. It regularly works with the Vatican and the U.S. Bishops’ Conference in advocating for changes to global economic and climate policy.
Today’s SECAM statement is signed by Bishop Sithembele Sipuka of Mthatha, the first vice president of SECAM and the commission chair. Debt relief and COVID-19 and climate change aid for African countries are at the core of what the conference is calling for.
The statement notes 40 million Africans have fallen into extreme poverty during the pandemic. It’s also the least vaccinated region of the world. About 20 percent of the African population has received at least one dose of the vaccine, according to the Oxford University Our World in Data project.
To alleviate some of the economic hardship, SECAM calls for global finance leaders to create another emergency reserve fund allocation, known as Special Drawing Rights (SDR). The first SDR allocation created $650 billion for COVID-19 pandemic response and recovery aid for countries worldwide. However, African countries only received $33 billion of it.
“We ask that wealthy countries, which received more than $400 billion in that allocation, rechannel a significant portion of their SDRs to African countries to support local efforts for vaccine purchase and climate change adaptation,” the statement said. “While the G20 commitment to rechanneling $100 billion is a good start, we believe they can do more,” noting that in a second allocation Africa should get at least “triple” the amount it received last time.
The African bishops also call for African countries to get debt relief, and a “new international financial architecture that prevents future debt crises.”
LeCompte said that the world finance leaders are discussing a number of possible solutions this week to try and alleviate the current economic crises, though he cautions they may not be moving fast enough. He said some of the most important actions would be: Getting development banks more capital to invest in developing countries, dealing with the global debt crisis by creating a global bankruptcy process, strengthening global health care hubs and infrastructure, and diversifying and creating local supply chains for food, fertilizer, and fuel.
LeCompte added that the U.S. government has been a leader in advocating for solutions to help developing countries through the COVID-19 pandemic, and it’s “incumbent” for them “to continue to push other G20 governments” to support those actions.
In the meantime, LeCompte said the U.S. economy will continue to suffer.
“Unfortunately, because the crisis is persisting in developing countries and around the world, we’re going to see more supply shocks and economic shocks in the United States,” LeCompte said. “We’re going to not only see inflation and food prices skyrocket, chaotic fuel prices, but we’re going to continue to deal with supply shocks across the United States.”
Follow John Lavenburg on Twitter: @johnlavenburg
