The United Nations’ Economic Commission for Latin America and the Caribbean (ECLAC) is making a case for the International Monetary Fund (IMF) and the World Bank to give debt relief to countries in the region at an international financing conference presently going on in Ethiopia.
The Conference of Churches in Grenada and the Caribbean Debt Network have jointly issued the following statement:
As Christian churches we support the biblical teaching that debts should sometimes not have to be paid. This was recognised in the Jewish ‘jubilee year;’ a time when debts were cancelled and slaves freed, in order for inequalities in society not to perpetuate. Jesus endorses this jubilee year and the need for debts to be cancelled in many of his teachings.
Many people in Small Island Developing States are currently suffering under the burden of debt. Unsustainable government debts have arisen following the removal of EU trade preferences for exports such as bananas and sugar, the impact of natural disasters including hurricanes and typhoons, and the fallout from the global financial crisis in 2008.
These factors outside the control of Small Island Developing States have huge impacts because small islands by their nature are heavily dependent on imports and exports, and disasters can affect the whole of an island’s economy. The debt burden of small island states prevents investment, takes resources away from vital services, and weighs economies down.
Measures are needed to make small islands less dependent on imports, including the funding of renewable energy and production of crops for local use. Greater accountability of governments and companies is needed to ensure fair taxes are paid, and resources from tax and any future borrowing are well spent. Compensation is needed in the form of grants to protect small islands from the damaging impacts of climate change.
But we also believe the current debt of many Small Island Developing States is unpayable. We call for the creation of a process to cancel the unsustainable debts of Small Island Developing States. Such a process should include all creditors and be guided by assessments independent of all creditors and debtors as to what sustainable levels of debt are for each island nation.
Where debts are above this unsustainable level, creditors should share in cancelling the debts to reduce them to a sustainable level.
The impact of the payments of unsustainable debts on the lives of the people of Small Island Developing States must be central to any debt cancellation process. Their voices must be heard and responded to.
The current debt crisis in many Small Island Developing States is unjust. Fair and comprehensive debt cancellation is needed urgently, for the sake of justice, equality and hope.
Fr. Sean Doggett
Conference of Churches in Grenada
Caribbean Debt Network