Global Debt Crisis Spurs Vatican-backed Expert Panel for Economic Justice

On February 21, 2025, in a significant move to address the growing sovereign debt and development crises in the Global South, the Pontifical Academy of Social Sciences (PASS) and Columbia University's Initiative for Policy Dialogue (IPD) announced the formation of a high-level Commission of Experts. Chaired by Nobel Laureate Joseph E. Stiglitz, the panel aims to propose comprehensive economic reforms for a more sustainable and just global financial system. The initiative aligns with the Vatican’s vision for economic justice, advocating for equitable solutions to global financial challenges.

The Commission’s upcoming Jubilee Report—set for release later this year—will present a roadmap for debt restructuring and sustainable development, allowing nations to invest in essential public services like healthcare, education, and climate resilience.

Key Facts About Debt Crises

Following the 2008 financial crisis, private capital managers looking for high yields outside the US provided high-interest rate, short-term maturity financing to developing nations. Due to the short maturities and high interest rates, this financing generally did not foster stable development and instead led to mounting debts for many governments across the Global South. The scale of the current debt crisis is alarming:

1. The World Bank finds that in 2023, developing countries spent a record US$1.4 trillion just to service their debt, amounting to nearly 4 percent of their gross national income.
2. Data from UNCTAD shows that more than 54 countries spend more than 10% of their tax revenues on interest payments on their debt.
3. 3.3 billion people live in countries that spend more on debt service than on health, and 2.1 billion people live in countries that spend more on debt service than on education.
4. The Covid-19 pandemic and the war in Ukraine were massive shocks to the global economy. The resulting monetary policy adopted by more developed nations, including high interest rates, worsened debt distress in many developing nations.
5. According to World Bank data, low- and middle-income countries now face significantly higher overall debt levels compared to the decade before the pandemic, with debt servicing placing an increasingly heavy strain on their economies and limited resources.
6. Debt burdens are impeding many low- and middle-income nations from securing investments for critical infrastructure, clean energy, and climate adaptation.

The Role of Pontifical Academy of Social Sciences

The Jubilee Commission is an initiative led by the Pontifical Academy of Social Sciences (PASS). The Pontifical Academy of Social Sciences was established by Pope John Paul II on January 1, 1994, to promote the study and advancement of social sciences, including economics, sociology, law, and political science. Its goal is to provide the Church with insights for developing social doctrine and to reflect on its application in contemporary society.

Eminent Experts on Board

The commission comprises globally renowned 33 policy experts and economists, each bringing a wealth of experience in tackling economic disparities and debt challenges. Among the distinguished members are:

• Joseph E. Stiglitz (Chair): Nobel Prize-winning economist and former Chief Economist of the World Bank, Stiglitz has been a vocal advocate for progressive economic policies and debt justice.
• Jayati Ghosh: A leading development economist, Ghosh has extensively researched global inequality, labour markets, and economic sovereignty in the Global South.
• Jeffrey Sachs: A prominent sustainable development expert, Sachs has advised governments worldwide on poverty reduction, economic stability, and climate adaptation strategies.
• Mariana Mazzucato: Known for her work on state-led innovation, Mazzucato has influenced economic policies emphasizing public investment and equitable growth.

This initiative signals the need for a critical shift in global economic discourse, emphasising structural reforms that prioritise long-term sustainability over short-term financial gains. The Commission’s findings are expected to shape future policy frameworks, advocating for a financial system that balances economic growth with social justice.