Building on the significant work done by the Catholic community in the United States in recent years to support debt relief for poor countries, we now have a critical opportunity to do more to help the world’s poorest people.
The United States Government is set to propose canceling 100 percent of the debt that many of the world’s poorest countries owe to the World Bank and other international financing institutions. This proposal is expected to be made at a meeting of the finance ministers of the world’s richest countries at the beginning of October. The prospect of major new debt relief for poor countries is most welcome news.
However, the proposal may allow international creditors to recover their losses by reducing financial assistance to poor countries. This would amount to a “zero-sum game” for the poor countries because debt cancellation would result in no increase in their financial resources for poverty reduction. To assure that debt cancellation results in a real financial benefit to poor countries, the creditor losses should be financed entirely through new resources from the rich countries or international sources
Please contact the White House and the U.S. Treasury Secretary during the week of September 20-24 to express your support for new debt relief for poor countries and to urge that the proposed 100 percent debt cancellation increases funds available to poor countries for critical investments in education, health and poverty reduction.
TAKE ACTION NOW! Call President Bush and Treasury Secretary John Snow and urge them to:
- Support major new debt relief for heavily-indebted poor countries at the G-7 finance ministers meeting in October.
- Ensure that the proposed 100% cancellation of debt to international financial institutions is not financed by a reduction in assistance to poor countries, but instead is financed entirely by new resources from the rich countries or international sources.
- Make sure that the funds made available by debt cancellation go towards tackling poverty eradication.
Comment Line: 202-456-1111
Fax - 202-456-2461
To contact Secretary Snow:
This is the phone number for the Office of the Undersecretary for International Affairs. Please ask to leave a message with the receptionist.
You may also visit the CRS website, www.catholicrelief.org/actioncenter.cfm
Background on the Issue of Debt Relief
Increasingly, global economic leaders are recognizing an important connection between international debt and poverty. Many poor nations have huge debts that they cannot sustain and that drain much-needed resources. This has happened because of mistakes or mismanagement by debtor governments, initiatives by creditors that may not have been sound, or changes in global economic circumstances beyond any one country’s control. Now, poor countries are using scarce financial resources to make debt payments, often at the expense of funding for health care, education, housing, and other basic needs. This makes progress on reducing poverty and increasing development in these countries difficult, if not impossible. It also means that many of the world’s poorest people are suffering enormously and are unable to obtain services to meet their basic needs.
In recent years, creditor governments and institutions have begun to forgive these debts. They realize that the entire global economy will be better off if poor nations are offered a fresh start to pursue true economic development without onerous debt burdens. Since 1996, the primary program for international debt relief has been the Heavily Indebted Poor Country Initiative (HIPC) which the Catholic community in the United States supported. While the HIPC program offered some hope in tackling onerous debt, and there are continuing efforts to improve and expand the program, more needs to be done. The new proposal to cancel 100% of the debt of many of the world’s poorest countries to international financial institutions is an important opportunity for greater debt relief.
Catholic Teaching and the Role of the Catholic Community
A fundamental principle of Catholic social teaching is our obligation to care for the least among us. The principle of solidarity, also a key element of Catholic social teaching, reminds us that we are one human family, that we are our brothers’ and sisters’ keepers whether they live across the street or across the globe. In recent years, the leaders of the church have applied these and other themes from Catholic teaching to the issue of debt relief. While we begin with the presumption that when countries, like individuals, contract a loan they have an obligation to repay it, we believe this presumption may be overridden in certain circumstance, for example, when a country cannot repay its debt without critical reductions in spending for health, education, food, housing, and other basic needs, and when debt has become a serious obstacle to development.
Because the debt burdens carried by poor countries affect the well-being of the world’s poorest people and represent an often overwhelming obstacle to development, the Catholic Church has been a strong proponent of debt relief. Pope John Paul II has called on all the countries of the world to “reduce substantially, if not cancel outright, the international debt which seriously threatens the future of many nations.” In A Jubilee Call for Debt Forgiveness, the bishops of the United States joined the Holy Father in calling for debt relief, explaining that the “external debt of the poorest countries is crushing the lives and dignity of vulnerable children, women, and men.”
Since the late 1990’s the U.S. Catholic community, in cooperation with Catholic and non-Catholic groups around the world, has played a significant role in the important progress that has already been made on international debt relief. Without the work of the Catholic Church at the parish, diocesan, national, and international levels, the HIPC Initiative would not exist as it does today. Now is a critical time for us to continue this important effort.
For more information: Go to www.usccb.org/sdwp or www.catholicrelief.org or contact:
Tina Rodousakis, Legislative Network Specialist, CRS, 1-800-235-2772 x 7462; email@example.com
Gerry Flood, USCCB, 202 541 3167, firstname.lastname@example.org; Fr. Andrew Small, Policy Advisor, International Economic Development, USCCB, 202-541-3153; email@example.com.
Kathy Selvaggio, Economic Justice Issues Advisor, CRS, 1-800-235-2772 x 7449; firstname.lastname@example.org
Joan Rosenhauer, Special Projects Coordinator, USCCB/SDWP, 202-541-3381; email@example.com.