New Vatican report calls for global economic reforms

By: Michael Sean Winters 

"The Pontifical Academy of Social Sciences, marking the Jubilee of Hope, issued a report on debt and development in the world and the need for a sustainable, people-centered global economy June 20. The report is the work of a commission Pope Francis established in which the pontifical academy worked with Columbia University's Initiative for Policy Dialogue. Just as in 2000, the promotion of debt forgiveness for impoverished nations is a theme of this year's Jubilee.

The effort was led by renowned economist Joseph Stiglitz and Martin Guzman, a former economy minister in Argentina. "Their deep thinking on this issue created all that we know needs to be done to build an economy that serves all of us," said Eric LeCompte, executive director of Jubilee USA Network, in an interview from Rome. LeCompte also commended the leadership of the Pontifical Academy of Social Science's president, Dominican Sr. Helen Alford, and chancellor, Cardinal Peter Turkson. 

In our country, where religion tends to be privatized, people may wonder why the Catholic Church is involved in drafting and publishing a report that gets into the economic weeds. "It was Pope Francis who reminded us while the devil is in the details, our Heavenly Father and the Holy Spirit are the ones who are the greater powers in the details," LeCompte told me. "It was the prayer of Jesus, the Our Father, that called for our debts to be forgiven." 

The report states that "excesses of debt have afflicted so many countries, with debt and development crises occurring so often" the problem is systemic. "Accordingly, it should come as no surprise that so shortly after the previous initiatives for debt relief for low-income countries, the world is once again confronting debt and development crises."

For developing countries, when there are "global financing booms, money floods in; in busts, it flows out even more quickly." For developed, wealthy countries, the reverse is the case: "In times of crisis, capital flows toward them. In a storm, safe financial 'havens' become all the more attractive."

The report also notes that there is a "chronic underinvestment in innovation, human capital, and infrastructure." This makes developing economies especially susceptible to economic swings: The international financial "dynamics have eroded state capacity and weakened the ability of policymakers to even conceive of development strategies that could enable structural transformation and sustained economic self-determination.""