Caritas and religious leaders address debt-relief appeal to G20

By Lisa Zengarini

124 faith leaders around the globe have marked the  Jubilee year by issuing a pressing appeal to the Group of 20 richest countries (G20) to address the global debt crisis which is crippling efforts to tackle poverty and action on climate.

Directed to the G20 finance ministers who  met this week in Johannesburg, South Africa, ahead of the G20 annual Summit in November, the appeal underscores the disproportionate burden of debt repayments on developing countries, which diverts resources from critical areas such as healthcare, education, and climate resilience.

The devastating  impact of the current  debt crisis on poorer nations

“As faith leaders, we are deeply troubled at the impact this current debt crisis is having on the lives of the poorest and most vulnerable across the world,” reads the letter, remarking that today the need for action is even greater than in 2000 when, when the first global debt campaign was launched on the occasion of the Great Jubilee of that year. “3.3 billion people – nearly half the global population – now live in countries that spend more on debt payments than on health, education, or life-saving climate measures”, they write.

Caritas Internationalis has spearheaded the initiative in response to Pope Francis’ broader call for justice in global financial systems, particularly in the context of the Jubilee of Hope.

The first signatory of the letter, Cardinal Stephen Brislin, the Archbishop of Cape Town, represents not only the Catholic Bishops' Conference of South Africa (SACBC) but also the country holding the rotating presidency of the G20 this year lending further weight to the message.

Shifting dynamics of international debt

Far from being just a moral plea,  the letter offers an insight into the shifting dynamics of international debt, highlighting  how, in recent years, private financial institutions—rather than governments or multilateral bodies—have become dominant creditors.

This trend, identified in a recent report of UNCTAD, the UN agency for trade and development, has led to more complex and prolonged debt negotiations, as private creditors impose significantly higher interest rates and resist restructuring efforts.

The consequences of such financial mechanisms are devastating: millions of people suffer from hunger, inadequate public services, deteriorating infrastructure, and intensified climate disasters due to their countries’ constrained fiscal space.

Private creditors must participate in debt relief efforts

To counter this crisis, the signatories propose four concrete policy actions for the G20. First,  they call for a robust debt cancellation framework that genuinely reduces debt burdens rather than merely offering temporary relief under outdated measures like the Common Framework set up by the G20 in 2020 to restructure debts for low-income countries hit by the economic shock of the COVID 19 pandemic.

Then, the letter urges legal reforms to ensure that private creditors, who now hold the largest share of poor countries’ debt, are compelled to participate in debt relief efforts instead of exploiting their leverage to demand unsustainable repayments.

Third, the appeal advocates for the restructuring of international financial institutions to make them more inclusive of indebted nations and more attuned to social and environmental imperatives.

Support for the establishment of a UN Debt Convention

Finally, the letter supports the establishment of a UN Debt Convention that would enforce responsible lending and borrowing practices, create transparent regulations, and introduce a global debt registry to enhance accountability.

The signatories emphasize that enacting these changes would not only address the current crisis but also foster a fairer and more sustainable global financial system.  “As faith leaders,” they conclude, “we urge you to be Pilgrims of Hope acting with courage, solidarity and compassion in this Jubilee year.”

First African presidency of G20

South Africa’s G20 presidency, which marks the first time that an African country presides over the international forum under the theme of “Solidarity, Equality, Sustainability”, has said it will prioritize disaster resilience, debt sustainability, just energy transition, and critical minerals for inclusive growth.

The United States, however didn’t take part in the ministerial meeting in Johannesburg, taking a stance against a new land appropriation law signed in January by South African President Cyril Ramaphosa and South Africa dragging Israel to the International Court of Justice over its ruthless war on Gaza.

The 19 states within the G20, apart from the international members EU and African Union, represent 85% of global GDP, 75% of international trade, and two-thirds of the world’s population.