Leaders Urge Debt Relief for Developing Countries
African Religious Groups Call on G7 to Address Poverty
In a concluding statement of the G7 Summit in the Bavarian Alps, the group addressed the global economy, the COVID crisis, the Ukraine war, climate, debt and vaccines. Presidents and prime ministers of the G7 highlighted the urgency to improve debt relief frameworks and address debt vulnerabilities.
"Debt relief is critical as developing countries struggle with the pandemic and food shortages due to the Ukraine war," said Eric LeCompte, Executive Director of Jubilee USA Network. “The G7 noted the importance for China and the private sector to participate in debt relief processes so developing countries can withstand current crises."
Up to 73 of the world’s poorest countries can seek debt relief through a G20 process. To date, Chad, Ethiopia and Zambia applied for the debt relief framework.
"The G20 debt relief process needs to be implemented more quickly," stated LeCompte. "We need the process expanded to cover other countries in need like Sri Lanka."
In May, the New York State Assembly began consideration of a bill that requires private creditors, which hold the majority of developing country debt, to join in relief deals. The legislation would apply to the more than 50% of the world's private debt contracts because they are issued under New York law.
“Legislation adopted by G7 countries can ensure the private sector and commercial banks participate in debt relief,” added LeCompte.
In a statement addressed to G7 leaders, the Justice, Peace and Development Commission of the Catholic Symposium of Episcopal Conferences of Africa and Madagascar (SECAM) warned about the deteriorating debt situation on the continent.
“Worsening global conditions and rising interest rates will push more African countries to make impossible choices between saving lives and jobs or paying creditors,” stated Bishop Sithembele Siphuka, First Vice-President of SECAM and Commission Chair.
The G7 launched an infrastructure plan that plans to tackle developing countries taking on too much debt. Pledging $600 billion in developing country infrastructure by 2027, the terms and quality of projects under the Global Partnership for Infrastructure and Investment seek to keep debt levels in check.
"The G7 plan to invest in countries from Angola to the Ivory Coast means less debt and positive economic returns for developed and developing countries,” shared LeCompte. "The G7's investment in sustainable infrastructure is good news for developing countries."
Leaders focused on the global food crisis pledging an additional $4.5 billion to protect the vulnerable from hunger and malnutrition. The war in Ukraine worsened food shortages and more than 193 million people face hunger.
On climate, the G7 announced the creation of a “Climate Club." The club or group of countries would focus on actions to meet climate goals. The G7 renewed pledges to deliver $100 billion in annual funds to address climate change through 2025.
"The Ukraine war, pandemic and climate crisis are a triple threat that developing countries don't have the resources to combat,” expressed LeCompte.
Read the full G7 communiqué here
. Read the African Catholic Bishops' statement to G7 leaders here.
Read Jubilee USA's press release on the New York Taxpayer and International Debt Crises Protection Act here.
Read Jubilee USA's press release on the G7 finance ministers meeting here.