The U.S. Conference of Catholic Bishops and an alliance of faith groups have urged President Donald Trump to champion a moratorium on debt payments for poor countries hit by the coronavirus pandemic that has triggered a global recession.
In a letter sent to the U.S. president on Wednesday, the groups said U.S. leadership was needed to both to help the 76 poorest countries in the world combat the pandemic and safeguard U.S. economic interests.
A move by rich countries, the Group of 20 major economies, the International Monetary Fund and the World Bank to suspend debt payments for those countries would allow them to bolster their health systems and provide for their own health safety, the groups wrote in a letter dated Wednesday.
The novel coronavirus that emerged in China in December has raced around the globe, infecting 1.41 million people and killing 87,700, according to a Reuters tally.
The IMF and World Bank, backed by the World Health Organization, have called on China, the United States and other bilateral creditors to temporarily suspend debt payments by the poorest countries so they could use the money to halt the spread of the disease and mitigate its financial impact.
G20 finance ministers and central bankers are due to consider the issue when they meet online next week during the Spring Meetings of the IMF and World Bank.
The letter from the Catholic bishops and Jubilee USA Network, a non-profit alliance of religious, development and advocacy groups, comes amid growing concern about the high level of debt of developing countries and emerging market economies.
“The current financial crisis threatens U.S. imports and exports from and to the developing world,” the bishops and Jubilee USA wrote. “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.”
The groups said the debt payment moratorium should both be interest-free, and expose all debts, including private and predatory loans.
Such a decision could help better assess debt sustainability and vulnerabilities, and, if warranted, trigger a process to restructure debt, the groups told the U.S. president.
Lending by Western countries and multilateral institutions slowed after a major round of debt restructuring in 1996, but the Chinese government, banks and companies have dramatically expanded their lending to developing countries since then.