Category Archives: Official Development Assistance

Vatican’s Jubilee commission urges systemic change as it launches new debt relief report

A Vatican-backed report authored by more than 30 prominent economists calls for urgent action and systemic reforms to address the global debt and development crises of our times.

The group, convened by the late Pope Francis for this Jubilee year, provides recommendations on debt relief and economic policy.

What follows is (mostly) from a news releases today by Jubilee USA and the Initiative for Policy Dialogue at Columbia University:
“This report is a blueprint to solve the current global debt crisis, prevent future economic crises and create an economy that radically reduces poverty,” said Eric LeCompte, executive director of the Jubilee USA Network and a Vatican advisor who is at the Pontifical Academy of Social Sciences (PASS) for the report launch. 

“While debt relief and a just economy are at the center of Catholic teaching, this is the first report convened by a Pope that focuses on technical recommendations to achieve an economy that serves everyone,” he added.
Nobel Prize-winning economist Joseph Stiglitz and former Argentine Minister of the Economy, Martín Guzmán, led the work of the expert group.

The report “seeks to contribute to a comprehensive rethinking of the global rules governing finance, taxation, trade, and the sharing of knowledge,” said PASS. “At its heart lies a clear and urgent goal: to help build a global economy that serves people, especially the most vulnerable, and truly leaves no one behind.”
Pope Francis reiterated the interfaith calls of Pope Benedict and Pope John Paul II on debt relief and economics, making these issues the focus of the Christian holy year of Jubilee 2025. Pope Leo XIV continues the efforts of his predecessors. 

Twenty-five years ago in Jubilee 2000, over $100 billion in international debt was cancelled, but a lack of structural reform, combined with recent world events, resulted in systemic vulnerabilities that are now undermining hard-won gains. 

The time for new Jubilee action is now.

Recommendations include:

  • Improve debt restructuring: Change multilateral institution policies and legislation in key jurisdictions so that creditors and debtor governments are newly incentivized to agree to more timely and sustainable debt restructurings.
  • End bailouts to private creditors: Multilateral institutions including the International Monetary Fund should change their policies and practices to support sustainable recoveries, not de facto bailouts of private creditors or crippling austerity.
  • Strengthen domestic policies: Developing countries should more extensively use capital account regulations to discourage destabilizing flows and create a more stable environment for long-term investments and should invest in structural transformation.
  • Enhance transparency: All should support financial policies that are transparent and have broad societal support.
  • Reimagine global finance: All should support a comprehensive change in global financing models to drive financing for sustainable development, including lending that supports long-term growth.

The report’s findings will be discussed at the 4th International Conference on Financing for Development in Seville, Spain, June 30-July 3 and other global gatherings where the global debt and development crises will be high on the agenda.
“Developing countries spent a record $1.4 trillion paying debt in 2023 and too many countries spend more on paying debt than they do on the urgent needs of their people,” said LeCompte who also serves on United Nations debt expert groups. “In African and low-income countries, debt payments are two-thirds higher than their combined spending on health, education and social services.”
According to the World Bank, more than 800 million people live in extreme poverty, over 100 million more than previously believed. The report calls for a range of reforms as a debt and poverty crisis that has been growing in the face of the pandemic, wars, cost-of-living and interest rate hikes rose to prominence in the agenda of global leaders in multiple forums. Proposals include greater transparency, reforms to the International Monetary Fund, changes to laws in New York and the United Kingdom which govern private sector debt, improving debt contracts and an international bankruptcy system akin to the national bankruptcy courts that exist in most countries.
“This report can move the G7, G20, IMF and United Nations to make short-term decisions to address the current crisis and lay a foundation to prevent future crises,” stated LeCompte.
“The experts who wrote this report are a critical part of the global Jubilee movement, which includes advocates in pews, development groups, conservatives, liberals and people of every faith,” shared LeCompte. 

Read or download the report here or here.

Read Pope Francis’ Jubilee 2025 debt focus speech here.

Empathy: a basic element of human decency

by Jim Hodgson

Back in the late 1990s, I travelled frequently by bus over the mountains between my home in Cuernavaca and my job in Mexico City. Even when the traffic was bad, the trip usually took less than two hours. The bus company almost always showed a film.

When not working or looking at the views, including the Popocatepetl volcano, I watched the movies. I can’t guess how many movies I saw without ever seeing how they ended. My friends and I joked about organizing a Pullman de Morelos film festival, renting or borrowing some of the movies, and just watching the last half hour of all of them to see how they ended.

Among those movies was a favourite of mine, Smilla’s Sense of Snow (Bille August, 1997). The shocking death of a small boy in Copenhagen opened a tale of conflict between corporate greed and the Inuit people of Greenland. But I never saw how it ended. 

Years went by and then, in a used bookstore in Strathroy, Ontario, I found the novel by Peter Høeg on which the film was based. It’s an excellent book with a satisfying ending. 

Among parts that have stayed with me was this:

“…[W]e read Karl Marx’s Das Kapital. It was a book I grew quite fond of. For its trembling, feminine empathy and its potent indignation. I know of no other book with such a strong belief in how much you can accomplish if you simply have the will to change.” *

Hmm. Empathy as a feminine virtue? Let’s see. Google offers this definition: “the ability to understand and share the feelings of another.” 

To me, it’s a basic element of human decency. A measure of empathy is vital in action to transform the plight of those made miserable by any who abuse their power. To empathize doesn’t mean you have to agree with someone: just recognise their different circumstances. Maybe some of us would rather say solidarity.

“In a time when empathy is increasingly treated as a vice, we must not turn our backs on the world’s most impoverished,” wrote Andy Harrington after a recent visit to South Sudan. Harrington is the executive director of the Canadian Foodgrains Bank (CFGB), a Winnipeg-based NGO that enables food aid to reach people in need and communities to move toward food sovereignty. He said people are already dying because of Trump’s cuts to USAID, adding that Canadian support is more essential than ever. (Eight people in South Sudan, including five children, died as they tried to walk for three hours to seek treatment for cholera after U.S. cuts forced local health services to close, Save the Children said April 9.)

Elon Musk said recently that empathy is killing Western civilization. But it seems the far-right has been attacking empathy for a long time now. And it does so with some masculine archetypes.

“MAGA influencers have begun to talk of the tariffs as a way to make the United States ‘manly’ again, by bringing old-time manufacturing and mining back,” asserts historian Heather Cox Richardson in her Substack post on April 8. In these first three months of the disastrous Trump regime in the United States, she has found her way into my daily reading as she sets current events in historical context. She adds: 

In a larger sense, Trump’s undermining of the global economy reflects forty years of Republican emphasis on the myth that a true American man is an individual who operates outside the community, needs nothing from the government, and asserts his will by dominating others.

Associated with the American cowboy, that myth became central to the culture of Reagan’s America as a way for Republican politicians to convince voters to support the destruction of federal government programs that benefited them. Over time, those embracing that individualist vision came to dismiss all government policies that promoted social cooperation, whether at home or abroad, replacing that cooperation with the idea that strong men should dominate society, ordering it as they thought best.

The Trump administration has taken that idea to an extreme, gutting the U.S. government and centering power in the president, while also pulling the U.S. out of the web of international organizations that have stabilized the globe since World War II. …

Now Trump is demonstrating his power over the global economy, rejecting the conviction of past American leaders that true power and prosperity rest in cooperation.

In less than 100 days, the Trump regime has dismantled that “liberal consensus” that at least regulated corporate excess, provided very basic social welfare, and promoted infrastructure. (This is not to ignore some of the United States’ greatest failures. Among them: slavery and Indigenous genocide, of course. But also not providing universal health care and maintaining racial segregated schools by underfunding the public education systems.)

* Peter Høeg, Smilla’s Sense of Snow, Toronto: McClelland-Bantam, 1997, pp.144-45.

Tomorrow: Karl Marx in the Rose Garden

Dismantling USAID: Yes, No, Maybe?

In late 1980, more than a year after the triumph of the Sandinista Revolution, the administration of President Jimmy Carter was still funding infrastructure in Nicaragua through USAID. By November 1984, with President Ronald Reagan’s “Contra War” well underway, your future bloguista was amused by this left-over sign at a road rebuilt near Matagalpa.

by Jim Hodgson

Back on launch day of Trump 2.0, the president issued an executive order that suspended international aid programs for 90 days, including those of the U.S. Agency for International Development (USAID).

The move came with a lot of over-the-top rhetoric and outright lies: that USAID spent “$100 million on condoms to Hamas” and that it “bankrolled” the Politico digital news company. “It’s been run by a bunch of radical lunatics. And we’re getting them out,” Trump told reporters on the evening of Feb. 2.

There are, of course, dozens of issues about which to criticize the Trump regime. But this is a blog that sets out to unwrap development issues, so let’s get into it.

Congress established USAID in 1961 to bring together programs that were administering foreign aid. Focusing on long-term social and economic development, USAID disbursed about $72 billion in 2023, less than 1% of the U.S. annual budget. It is one of the largest aid agencies in the world. 

You’ll remember, of course, that the United Nations target for spending on Official Development Assistance is 0.7 per cent of gross domestic product. Only five countries meet or exceed that goal: Norway, Luxembourg, Sweden, Germany and Denmark. In 2023, Canada contributed 0.37 per cent of GDP; the United States contributed just 0.24 per cent, seventh lowest among 31 OECD countries. 

Trump’s order, carried out by his government efficiency hatchet-man, Elon Musk, chopped humanitarian programs around the world: famine relief in war zones; programs to stall malaria in 22 African nations; vaccinations in vulnerable areas; and access to medications by people living with HIV and AIDS. Several U.S. government websites also removed resources on HIV. (That also happened when Trump first took office in 2017).

Newsweek reported Feb. 6 that just months before Musk shut down USAID, the agency was investigating its relationship with Musk’s Starlink satellite company.

In days since the order, enough voices were raised in alarm to get funding for HIV and other essential medicines restored—though it wasn’t clear if that included preventative drugs like PrEP. For more than 20 years, PEPFAR (the President’s Emergency Plan for AIDS Relief) worked within and alongside the Global Fund to Fight AIDS, TB and Malaria and the Joint United Nations Program on HIV/AIDS (UNAIDS).

Also, a federal judge on Feb. 7 temporarily blocked the administration from placing 2,200 USAID employees on paid leave, siding with workers who argued Trump and Musk lack the authority to immediately dismantle an agency created by congressional legislation.

The Trump regime blames “migrants” for much of what supposedly ails the United States, but in this time of unparalleled worldwide migration of people, the USAID cuts hit the United Nations High Commissioner for Refugees and the International Organization for Migration (IOM)—two agencies that are critical in managing and measuring the flows of people.

No one should argue against humanitarian aid, although Musk and Republican members of congress who see empathy as a character flaw will do so. In a world still suffering from massive inequality, such aid is urgently needed. The U.S. Christian magazine Sojourners offered a strong defence of the humanitarian work of USAID.

What happens after the 90-day review? My guess is that some functions will be folded into the State Department and thus more susceptible to narrow political goals, like subversion of other countries’ governments. I feel badly for beneficiaries of the humanitarian programs and for many well-intentioned employees; not so much for the vast array of U.S.-based independent contractors who get rich from the misery of others.

Sheinbaum: “It’s better they close it”
As noted above, USAID was created in 1961—just two years after the triumph of the Cuban Revolution. There was no artifice: USAID was to counter the influence of Soviet Union. In recent years, USAID has been at the heart of U.S. challenges to the growing influence of China, which has a successful “Belt and Road” foreign aid program of its own.
My venerable Mac laptop computer tells me that I have 226 files that mention USAID. Almost all of the documents are about the ways that USAID is used as an instrument of U.S. foreign policy, especially its work alongside other U.S. institutions that promote—or subvert—democracy in other countries: the National Endowment for Democracy (NED), the International Republican Institute, the National Democratic Institute for International Affairs and even the Central Intelligence Agency.

USAID even had an Office of Transition Initiatives (OTI) that gained infamy in 2014 over its covert “Cuban Twitter” (ZunZuneo) social media program that was aimed at overthrowing the Cuban government was revealed by Associated Press. 

Sheinbaum (left): USAID must be transparent; in Mexico, it has funded the opposition. Right: USAID still in the headlines Feb. 8.

In her morning news conference on Feb. 4, Mexican President Claudia Sheinbaum, breaking away from the dispute over tariffs, lashed out at the overt political activity of USAID. “This agency has funded research projects and groups opposed to the government. That’s the case with Mexico.”
She mentioned an organization that she called, “Mexicans for Corruption.” (She was only half-joking: it’s Mexicans against Corruption. The group actively opposed her predecessor Andrés Manuel López Obrador’s effort to reform the judicial system, and it had support from USAID.) 
“And how is it that they get involved in politics, those agencies that are about aid. In that sense, if the United States wants to help with development, it should be transparent,” she continued.  “The truth is that there are so many things USAID does that in truth it is better they close it.”
In a similar vein, Colombian President Gustavo Petro said some U.S. help is not welcome and has to go. “Hundreds of immigration officials who guard our borders were paid by the United States. This aid is poison,” he said during a Feb. 3 cabinet meeting. “That should never be allowed. We are going to pay with our money.” In 2024, the agency paid nearly $385 million to Colombia.

Haïti chérie

Which brings me to Haiti, a country whose heartbreak I know well. For more than 45 years, it has been particularly afflicted by HIV and AIDS. The ongoing political crisis, worsened by uncontrolled activity by criminal gangs, continues to hamper relief efforts including support to people living with HIV and AIDS. 

Repeated U.S. interventions have made things worse. From 2011, with the presidencies of Michel Martellyand Jovenel Moïse and then the unelected leadership of Prime Minister Ariel Henry through early 2024, the United States and the local elites had the leaders they wanted: men close to the business sector who had close ties in the United States.

That fruitless model was finally shoved aside last June 11 with the installation of a transitional council (CPT). It’s wobbly but hope persists that it can finally organize new elections that produce leaders that Haitians want. A truth commission and an electoral council have been named.

In the meantime, the problem of gang violence is being addressed (though ineffectively) with the addition of the Multinational Security Support Mission (known as MMAS), led by police from Kenya and bolstered with police from El Salvador and Guatemala. Despite UN backing and many promises, it is underfunded and understaffed.

Feb. 4: U.S. aid to the security mission is frozen. Feb. 6: aid is renewed

A new blow came Feb. 4 when the UN announced that the shutdown of USAID meant funds for the MMAS were frozen. But two days later, U.S. Secretary of State Marco Rubio announced that MMAS would be protected despite the USAID cut, adding to speculation that Rubio, Musk and Trump are not all operating from the same playbook.

In the wake of the axing of USAID, the best piece that I have read about its activities in Haiti is by a long-time observer, Jake Johnston of the Center for Economic Policy and Research (CEPR). At the end of a Feb. 4 essay about the agency’s work in Haiti, he writes:

The term “aid” encompasses many different things: humanitarian assistance and development programming, contracts and grants, support to local organizations and multimillion dollar contracts to DC-area firms. 

There are many parts of the US foreign aid industry that can and should be stopped or significantly reformed. But that doesn’t mean that shutting down USAID, or making its assistance even more overtly political by placing it under the umbrella of the State Department, is going to be a good thing, either in the short or long term. 

The reality is that, where foreign assistance is least effective, it is largely because it is designed to promote US interests rather than address the needs of those ostensibly on the receiving end. The changes announced by the Trump administration are not likely to truly disrupt US soft power abroad. If anything, it will make political interventionism an even more explicit aim of US foreign assistance.