Pope Francis says international debt can't be paid at 'price of unbearable sacrifices'

Pope Francis says international debt can’t be paid at ‘price of unbearable sacrifices’

Pope Francis says international debt can’t be paid at ‘price of unbearable sacrifices’

Pope Francis caresses a baby during his weekly general audience in the Pope Paul VI hall at the Vatican, Wednesday, Feb. 5, 2020. (Credit: AP Photo/Andrew Medichini.)

Speaking at a summit in Rome of some of the world’s most powerful financial officials, Pope Francis said the fact that five million children under five will die this year due to extreme poverty is something that should motivate the world to act.

ROME – Speaking at a summit in Rome with some of the world’s most powerful financial officials, Pope Francis said the fact that five million children under five will die this year due to extreme poverty is something that should motivate the world to act.

He also alluded to the situation in his home country of Argentina, which is facing a renegotiation of debt with the International Monetary Fund that could save the country from a default.

“These are solvable problems, there is no lack of resources,” Francis said on Thursday. “There is no determinism that condemns us to universal inequality. Let me repeat: We are not doomed to universal inequality.”

Knowing this, Francis said, can lead to creativity in finding and generating responses to the suffering of so many innocent people, as it is, in fact “avoidable.”

“In not a few situations, we are facing a lack of will and decision to change things and mainly, the priorities,” he said.

The pope was speaking to participants of a Feb. 5 Vatican conference titled “New forms of solidarity: Towards fraternal inclusion, integration and innovation,” organized by the Pontifical Academy of Social Sciences, headed by Argentine Archbishop Marcelo Sanchez Sorondo.

Francis began his prepared remarks, delivered in Spanish, by saying that the world is rich, yet the number of poor people continues to increase. This year’s worldwide income, he noted, will be almost $12,000 per capita, yet “hundreds of millions of people are still mired in extreme poverty and lack food, housing, medical care, schools, electricity, drinkable water and sanitation services.”

“It is estimated that approximately five million children under 5 years of age will die this year from poverty,” he said. “Another 260 million will not get an education due to lack of resources, wars and migration.”

This situation of extreme poverty, he said, has led to millions of people being victims of human trafficking and new forms of slavery, such as forced labor, prostitution and organ trafficking: “They have no rights and guarantees; they can’t even enjoy friendship or family.”

Francis also noted that if the world’s 50 wealthiest people decided to do so, they could save the lives of millions of people each year.

“If there is extreme poverty in the midst of wealth (also extreme) it is because we have allowed the gap to widen to become the largest in history,” Francis said. “Those fifty people by themselves could finance the medical care and education of every poor child in the world, be it through taxes, philanthropic initiatives, or both. Those fifty people could save millions of lives every year.”

Francis said that this “globalization of indifference,” which his predecessor Pope St. John Paul II defined as “structures of sin,” finds a conducive atmosphere to grow when the common good is reduced to certain sectors and when economy and finances become an end in themselves.

“It is the idolatry of money, greed and speculation,” he said.

Francis then went on to name what he saw as “structures of sin,” such as “repeated tax cuts for wealthy people, justified many times in the name of investment and development; tax havens for private and corporate profits, and the possibility of corruption by some of the largest companies in the world, often in harmony with the ruling political sector.”

“Every year hundreds of billions of dollars, which should be paid in taxes to finance medical care and education, accumulate in tax haven accounts preventing thus the possibility of decent and sustained development of all social actors,” Francis said.

“Poor people in heavily indebted countries bear overwhelming tax burdens and cuts in social services, as their governments pay debts contracted insensitively and unsustainably,” he said. “In fact, the public debt incurred, in a few cases to boost and encourage the economic and productive development of a country, can become a factor that damages the social fabric.”

Even though he never mentioned his home country by name, the pope’s remarks were widely viewed as a wink to Argentina’s finance minister Martin Guzman, who was seated next to the pope, together with the head of the International Monetary Fund, Kristalina Georgieva and several Nobel laureates.

“It cannot be expected that the debts which have been contracted should be paid at the price of unbearable sacrifices. In such cases it is necessary to find — as in fact is partly happening — ways to lighten, defer or even cancel the debt, compatible with the fundamental right of peoples to subsistence and progress,” Francis said, quoting John Paul.

That quote was later tweeted from the official Twitter account of Argentina’s finance ministry.

“It is not right to demand or expect payment when the effect would be the imposition of political choices leading to hunger and despair for entire peoples,” Francis said, continuing to quote his predecessor.

“The moral demands of St. John Paul II in 1991 are surprisingly current today,” Francis said.

On the eve of the Vatican summit, the head of the IMF and Guzman had dinner together, in what was the first official meeting between the two officials since Guzman took office late last year.

Guzman, appointed by newly inaugurated Peronist President Alberto Fernandez, needs to restructure $100 billion in sovereign debt with the country’s creditors – $44 billion of it with the IMF – amid a steep recession and more than 50 percent inflation.

In his speech, Francis also recalled the Sustainable Development Goals unanimously approved by all nations in 2015, urging all peoples to “help developing countries achieve long-term debt sustainability through coordinated policies aimed at promoting debt financing, debt relief and debt restructuring, as appropriate, and address the external debt problem of heavily indebted poor countries to reduce debt distress.”

Addressing those gathered as the “financial leaders and economic specialists of the world,” Francis called on them to work together in eliminating the injustices of the current global economy.

In her remarks, Georgieva seemed to back the pope while making no promises about debt relief.

She said that the new priorities for the global economy can be summarized with a quote from the Argentine pontiff: “The first task is to put the economy at the service of people.”

“This is a beautiful description of the world we want,” she said. “And it is the world we need if we are to meet the challenges of the 21st century.”

Georgieva called on the international community to fight climate change, curb tax avoidance and address inequality.

She closed by saying, “We can be hard at the IMF, but we have a soft heart. This is no longer your grandmother’s IMF.”

Follow Inés San Martín on Twitter: @inesanma


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