BU Experts Served on Vatican Commission Urging Global Debt Relief
A Vatican-appointed commission that includes three BU scholars has recommended that rich nations give relief to debt-laden poor ones in 2025, declared a Jubilee Year by the Catholic Church. Photo via Unsplash/Victor Malyushev
BU Experts Served on Vatican Commission Urging Global Debt Relief
Debt-strapped developing nations need help, says Jubilee Year report, backed by Pope Leo XIV
Developing countries, staggering under $29 trillion of debt, might understandably long for their creditors to grant Deuteronomy’s jubilee: “At the end of every seven-year period, you shall have a relaxation of debts,” says the fifth book of the Old Testament and the Hebrew Bible. And now a Vatican-backed commission that includes three Boston University academics is urging a modern take on the jubilee.
The Catholic Church is marking 2025 as a Jubilee Year, “a time for forgiveness and renewal in our relationship with God.” As part of that, a Jubilee Commission appointed by the late Pope Francis has issued a debt-relief report. The commission—30 global experts chaired by Joseph Stiglitz, a Nobel laureate economist, and former Argentine economic minister Martín Guzmán—called on developed nations to put money behind Francis’ long-standing call for global debt relief.
“It has been an honor to serve alongside Nobel Prize winners and former high-level officials,” says Kevin Gallagher, a BU Frederick S. Pardee School of Global Studies professor of global development policy and director of the University’s Global Development Policy Center (GDP). He was joined on the commission by Marina Zucker-Marques, a GDP senior academic researcher, and Marilou Uy, a nonresident senior fellow at the center.
The commission’s report cites United Nations figures that 54 developing countries currently spend at least 10 percent of their tax revenue on debt interest payments. That interest burden has doubled on average as a share of tax revenue since 2014, the report adds. As a grim example, the report points to Africa, “the only region where public debt has been growing faster than [gross domestic product] since 2013. Approximately 57 percent of the continent’s population—751 million people, including nearly 288 million living in extreme poverty—reside in countries that spend more on servicing external debt than on education or healthcare.”
Among its recommendations, the Jubilee Commission report calls for extending debt relief granted during the pandemic; ending public bailouts of private lenders, to short-circuit reckless loans; short-term “bridge” loans to nations in debt crisis; and a new bankruptcy process for those countries, similar to ones shielding private debt-strapped companies. The report is supported by Pope Leo XIV, according to the Catholic News Agency.
The Brink caught up with Gallagher as he was en route to the UN in New York to help present the report.
Q&A
With Kevin Gallagher
The Brink: How were you recruited to the commission?
Gallagher: I think I was chosen because BU’s GDP Center has emerged as one of the leading sources of evidence-based research on the global debt predicament for developing countries.
The Brink: What is the thinking behind the report’s recommendations?
Gallagher: In a nutshell, the core ideas are that an increasing number of developing countries need debt relief and a series of reforms are needed at the national and global level to make sure that this doesn’t have to happen every 25 years. The reason why the Vatican convened this commission is that it is a Jubilee Year, which happens every 25 years. Jubilee years are for forgiveness. In 2000, the Vatican played the core role, through its global reach and the ear it gets with global leaders, in forgiving the debt of much of Africa. For reasons largely external to Africa and developing countries, they are back in this predicament again.
The Brink: How will developing nations cope with debt if there isn’t forgiveness by the developed world?
Gallagher: Instead of defaulting on their debt, countries are defaulting on their development prospects. Already, 3.3 billion people are living in a country that spends more on external debt payments than on education or health. The more the world fails to act, the more countries will sacrifice their future to pay international creditors. This puts a drag on global growth and is a moral tragedy.
The Brink: What are the odds that lenders—particularly the United States, in our current political climate—will adopt your recommendations?
Gallagher: Global debt relief has been on the global agenda since COVID, and there has been some important, incremental action. In the current moment, the multilateral system is in crisis, as the major powers turn inward and against each other—the developing world is falling from the radar.
That said, there has been some movement. This year alone, some Middle Eastern countries forgave Syria’s debt so that country could have a chance at building back after its regime change. Just last week, the European Union announced a debt relief initiative for Africa. And China has been providing modest debt relief as well.
This lack of progress is what spurred the Vatican to set up the commission in the first place. They have realized that the problem is not being properly addressed by policymakers and analysts and that it takes a groundswell of people, on moral grounds. In the last Jubilee, the pope and the pop stars [then Pope John Paul II and musicians Bono and Bob Geldof] did what policymakers and economists would not, and put so much pressure on leaders that they had no choice but to act. At the last Jubilee, faith-based organizations in places seen as highly conservative were at the forefront. The Vatican, based on our report, is looking to mount a campaign to do that again.
This interview was edited for length and clarity.
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