International Debt is Choking World Economic Outlook

November 5, 2014

“Among our tasks as witnesses to the love of Christ is that of giving a voice to the cry of the poor.” – Pope Francis

Residents of Taclaban await evacuation to Manila after Typhoon Haiyan in the Philippines, November 15, 2013.

Residents of Taclaban await evacuation to Manila after Typhoon Haiyan in the Philippines, November 15, 2013.

The International Monetary Fund (IMF) released its World Economic Outlook (WEO) on October 7. The report warns the world economy may not return to levels of growth seen prior to the 2008 crisis. It downgrades global economic growth to 3.3%, which is 0.4% lower than the April WEO. The global growth projected for 2015 was lowered again to 3.8%. To remedy the bleak economic forecast, the IMF calls for an increase in public infrastructure, structural reforms, and continual support of monitory policy.

According to the IMF World Economic Report, the already grim WEO will continue to slow due to high levels of international debt. It is clear that in order to grow economies, create jobs and end poverty, debt restructuring is needed immediately.

Together with our faith partners in the 75-member alliance Jubilee USA Network, Columbans work to build an economy that serves, protects and promotes participation of the most vulnerable communities. Eric LeCompte, Executive Director of Jubilee USA Network, commented “The IMF is right that we need more public investment. When poor countries are spending five times as much on debt as they are getting in aid, investment and growth suffer.”

He went on to say “The IMF continues to highlight that the root cause of inequality and uneven growth is global debt. We’ve seen the IMF suggest aspects of a global bankruptcy process to deter threats. If we are going to deal with the root causes of debt-driven global inequality, we need to adopt a global bankruptcy process. We can create more jobs, but the root causes of financial crisis will only be addressed when unsustainable debts are resolved and developing countries can collect taxes.

Columbans in the Philippines have seen first-hand the injustice of an economy in debt bondage. We have spoken out in the past about the need to restructure the Philippines debt as they recover from the damage caused by Typhoon Haiyan in November 2013. As we approach the first anniversary of Typhoon Haiyan on November 11, we repeat this call for debt relief for the Philippines.

We call for immediate debt restructuring for the Philippines in order to meet the disaster recovery needs of the 11 million people affected by Typhoon Haiyan. Please join us by sending a letter to the President of the World Bank to free the Philippines from this debt bondage.