Landmark report by prominent economists and religious leaders puts forward blueprint to tackle the global debt crisis in the jubilee year
Representational image. Photo: Collected
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Representational image. Photo: Collected
Developing countries like Bangladesh are rapidly sinking into dangerous levels of external debt, severely undermining their ability to invest in vital sectors like education, healthcare, and climate resilience, according to a landmark report released on Saturday (21 June) by a Vatican-backed Jubilee Commission.
Published from Vatican City as part of the Jubilee Year 2025 initiative, the report outlines a comprehensive roadmap to tackle the growing global debt and development crises. It also puts forward a bold set of policy reforms, particularly targeting the International Monetary Fund (IMF)’s lending programs, reads a press release.
The commission, comprised of over 30 leading international experts, is co-chaired by Nobel Prize-winning economist Joseph Stiglitz and former Argentine Finance Minister Martín Guzmán. It was originally formed at the request of the late Pope Francis and is now continuing its mission under the leadership of Pope Leo.
According to the report, 54 countries spent more than 10% of their total tax revenue on debt interest payments in 2023 alone. Since 2015, debt burdens in developing countries have increased by more than 50%. The report warns that this spiraling debt is now choking off critical investments in basic services and long-term resilience.
“Increasing debt is squeezing out spending on health, education, and climate adaptation,” the commission warns. “Political will and global cooperation are urgently needed to reverse course.”
Professor Suborna Barua of the University of Dhaka’s Department of International Business described the situation in Bangladesh as especially concerning. “In recent years, Bangladesh’s national debt has risen to more than 50–60% of its per capita income. Foreign debt in the climate sector alone stands at 13%,” he noted. “A major share of our foreign currency reserves is now being used to service debt, putting pressure on the economy and forcing cuts in essential sectors.”
Joseph Stiglitz said, “Today, more than 54 countries are spending over 10% of their tax revenues just to service interest payments on their debt. Current debt policies in many developing countries are prioritizing financial markets over people, undermining essential development and risking a lost decade, or worse. This is a crisis the world cannot afford to ignore.”
Martín Guzmán said, “More than 3.3 billion people live in countries where more is spent on debt repayment than on health. Another 2.1 billion live in countries where debt servicing exceeds education spending. These nations may not be defaulting on their debt, but they are defaulting on development. Debt is crowding out investment in essential public services.”
To confront the crisis, the report offers seven core recommendations:
- End net negative financial flows – Multilateral development banks must ensure debt-stressed countries receive more in financing than they pay out.
- No bailouts for irresponsible lenders – Institutions like the IMF should stop using public funds to rescue private or bilateral creditors.
- Meaningful debt restructuring – Unsustainable debts should be reduced in principal, not just through payment delays or interest rate changes.
- Long-term financial breathing room – Loan maturities should be extended to at least 20 years to enable governments to focus on development.
- Reform the IMF – Lending must be insulated from political interference and promote equitable burden-sharing.
- Expand support to middle-income countries – Debt relief should not be limited to the poorest nations; vulnerable middle-income countries must also be included.
- Ensure full transparency and accountability – Sovereign loans should require parliamentary approval, and private creditors must publicly disclose their positions in restructuring talks.
