The World Bank released data in June for 72 low-income countries’ debt statistics, including a breakdown of specific lenders.
This data revealed that China has surpassed the World Bank as the largest creditor to sub-Saharan Africa’s low-income countries. Analysis by the China Africa Research Initiative showed that China has lent $64 billion in Africa as of 2018.
Cardinal Muang Bo, Archbishop of Yangon, Myanmar, called on China to write off the debts of other countries to help cover the cost of healthcare during the pandemic in April. Cardinal Luis Antonio Tagle, prefect of the Vatican Congregation for the Evangelization of Peoples, also appealed to rich countries to forgive the debts of poor countries, which are struggling to fund a coronavirus response.
In a virtual summit between Chinese and African leaders in June, China offered to cancel interest-free loans, which account for less than 5% of African countries’ debt to China, according to the Council on Foreign Relations.
At the UN Conference on Trade and Development meeting, Archbishop Jurkovič said that it was “of utmost importance” that the international community take coordinated action “to deliver speedy and substantive debt relief to crisis-stricken developing countries who need it now more than ever, either because they already struggle under unsustainable debt burdens or because they are too poor to tackle the impact of the COVID-19 crisis.”
“Moving towards a more inclusive and sustainable world is not merely a matter of making markets work better,” he said. “It requires a more exacting and focussed agenda that addresses the systemic constraints on resource mobilization and technological diffusion, that mitigates growing asymmetries in market power arising from the lop-sided rules of a hyper-globalized world, and that corrects existing deficits in global economic governance and guarantees the policy space needed to match local challenges with international goals.”
Jurkovič said that roots of the crisis were not only economic, but had a moral dimension, adding there was a need for an “ethic of solidarity” that recognized “the primacy of being over having.”
“Over the last decade, we have learned that excessive liberalization and deregulation, allowing for markets and firms to regulate themselves, privileges short-term gains over long-term commitments. Of great concern is the ever-decreasing economic allocation to the health sector and the abuse and predation of the natural environment on which not just economic life, but all human life, ultimately depends,” he said.
The archbishop quoted Pope Francis’ Easter Urbi et Orbi message in which the pope called on all nations to “meet the greatest needs of the moment through the reduction, if not the forgiveness, of the debt burdening the balance sheets of the poorest nations.”