POPE FRANCIS URGES WORLD LEADERS TO ANNUL DEBT OF POORER NATIONS

Thu 02 January 2025:

Pope Francis on Wednesday urged world leaders to annul the debt of poorer countries, the official Vatican news agency reported.

Speaking after his traditional New Years’ Day Angelus, the pontiff said: “I encourage leaders of nations with Christian traditions to set an example by canceling or significantly reducing the debts of the poorest countries.”

No country or people should be crushed by debt, he added.

Also touching upon the ongoing wars and conflicts across the world, he said: “Let us pray for an end to all fighting and for a decisive focus on peace and reconciliation. My thoughts go to war-torn Ukraine, Gaza, Israel, Myanmar, (North) Kivu, and so many other people in conflict.”

“Brothers and sisters, war destroys. It always destroys! War is always a defeat. Always. I express my heartfelt appreciation to all those striving for peace,” he added.

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The debt of poorer countries is a complex issue often rooted in historical, economic, and systemic factors. Many low-income nations borrowed heavily during the 20th century to fund infrastructure, education, and healthcare. However, challenges such as mismanagement, corruption, and external shocks—like commodity price drops or natural disasters—made repayment difficult.

Interest on these loans compounds the problem, often forcing governments to spend more on debt servicing than on essential public services. Additionally, unfavorable terms from lenders, whether international institutions, wealthy nations, or private creditors, can exacerbate the debt burden.

In recent years, debt levels have surged due to the COVID-19 pandemic and rising global interest rates. While initiatives like the Heavily Indebted Poor Countries (HIPC) program and the G20’s Debt Service Suspension Initiative (DSSI) have offered some relief, they are often criticized for being temporary or insufficient.

The cycle of debt hinders economic development, perpetuates poverty, and reduces sovereignty, as countries must often meet strict conditions to access further loans or aid. A sustainable solution involves fairer lending practices, debt forgiveness, and reforms to global financial systems.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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