The Pontifical Academy of Social Sciences and Columbia University Join Forces to Address Global Debt Crisis
A groundbreaking collaboration between the Pontifical Academy of Social Sciences (PASS) and Columbia University’s Initiative for Policy Dialogue (IPD) has resulted in the formation of a commission dedicated to proposing innovative reforms and solutions for sustainable economic, social, and environmental growth.
In a joint statement, PASS and IPD highlighted the profound impact of the COVID-19 pandemic and the conflict in Ukraine on the global economy. They also pointed out that the monetary policies of developed nations, characterized by high interest rates, have exacerbated the debt crisis in many developing countries.
The newly established Commission of Experts, scheduled to convene in 2025 and led by Professor Joseph E. Stiglitz, aims to tackle the escalating challenges of sovereign debt and development, particularly affecting countries in the Global South. The commission, comprised of experts from academia, civil society, and religious communities, will produce a special Jubilee Report outlining recommendations for sustainable solutions.
A Renewed Call for Debt Relief
The upcoming Jubilee of 2025 presents an opportunity to reignite the movement for debt relief, building on the legacy of the Jubilee of 2000 which saw significant debt cancellations for vulnerable countries. However, the lack of comprehensive reforms in the global financial system has perpetuated the debt crisis, hindering investments in crucial areas such as education, healthcare, and climate adaptation.
Pope Francis has identified debt relief as a central priority for the Jubilee of 2025, emphasizing the urgent need for global reforms. During a conference on sovereign debt in June 2024, co-organized by PASS and IPD, the Pope advocated for an international mechanism for debt restructuring and ethical standards in negotiations. The Catholic Church continues to be a beacon of justice and equity in addressing the challenges of global debt.
The Impact of Unsustainable Debt
Data from the World Bank reveals that developing countries spent a staggering $1.4 trillion on debt servicing in 2023, equivalent to nearly 4% of their gross national income. According to the United Nations Conference on Trade and Development (UNCTAD), 54 countries allocate over 10% of their fiscal revenues to debt interest payments.
- 3.3 billion people reside in countries where debt servicing surpasses healthcare spending.
- 2.1 billion people live in countries where debt servicing exceeds education expenditure.
Low- and middle-income countries are grappling with unprecedented debt levels, impeding investments in critical infrastructure, clean energy, and climate resilience. The Commission of Experts is poised to propose reforms that alleviate the burden on poorer nations and foster sustainable development worldwide.
