WASHINGTON (CNS) — Two leading proponents of debt relief for developing countries urged the White House to lead the call for a moratorium on debt payments for poor nations so they can devote funds to fight the COVID-19 pandemic.
The request came in an April 8 letter from Bishop David J. Malloy of Rockford, Illinois, chairman of the U.S. Conference of Catholic Bishops’ Committee on International Justice and Peace, and Eric LeCompte, executive director of Jubilee USA Network, an alliance of faith-based development and advocacy groups.
The letter said a moratorium would aid the 76 poorest countries while safeguarding U.S. economic interests.
“The leadership of the U.S. government is vital to ensuring that our world will emerge from this pandemic with greater resilience and a renewed understanding of the greater interconnectedness of humanity,” the letter said.
A decision to suspend debt payments would allow for a better way to assess debt sustainability and vulnerabilities and, if necessary, open a process to restructure debt, the letter added.
The request comes as the Group of 20 finance ministers and central bankers from the European Union and industrial and emerging market nations were preparing to discuss the issue during meetings of the International Monetary Fund and World Bank starting April 14.
G-20 finance officials have long expressed concern about the high level of debt of developing nations and emerging market economies.
“Suspending debt payments, with no interest, can immediately allow countries to access funds to bolster their health systems and support needed stimulus packages in the developing world, allowing these countries to provide for their own health safety and security,” the letter said.
Bishop Malloy and LeCompte also wrote that the financial crisis that has emerged as the pandemic grows threatens U.S. imports and exports to developing countries.
“Providing a suspension of debt payments and debt relief will help safeguard our common interests of returning the U.S. economy to prosperity and growth,” they said.