One of the paradoxes of the world today is that the nations least responsible for greenhouse gas emis-sions are the ones suffering the most devastating consequences of climate change. While the global North continues to prosper, the global South is mired in a quagmire of debt and environmental crisis. The Climate Vulnerable Forum estimates that these countries are losing 20% of their GDP annually due to climate impacts, while the International Monetary Fund and the World Bank predict that over 60% of developing countries are at risk of debt crises. This situation needs to be addressed urgently, as the resources needed to adapt to the climate crisis are being diverted to repay loans, which have often been granted on unfair terms. In response to this emergency, in 2020 the G20 adopted the Common Framework for Debt Treatments. On paper at least, this measure was supposed to provide the poorest countries with debt restructuring options. But its implementation so far has been slow and ineffective. The main problem is that the Common Framework requires compliance by both public and private
creditors, but while nation states can be persuaded to renegotiate, private investors see no reason to re-duce their returns. The result has been a long process that has left emerging economies at a standstill, unable to access the finance they need to invest in development and climate resilience.
Bolder and faster solutions are clearly needed: what is at stake is not just economic recovery, but the very possibility of building a sustainable future for large sections of the population.
The case of Zambia is emblematic. It was the first African country to default in the wake of the pandemic.
The government had to negotiate a restructuring with the Paris Club, the IMF and private investors as its public debt exceeded 120% of GDP in 2021. The deal included a reduction in the debt burden and new, more sustainable repayment terms. But the creditors imposed cuts in public spending, resulting in reduced funding for health and education. As a result, despite the apparent stabilisation of the macro-economy, citizens are caught in the grips of a severe social crisis. Hospitals face persistent drug short-ages, the education system is underfunded and infrastructure projects have stalled. This shows that debt restructuring, if not accompanied by a social and productive investment plan, risks remaining a stopgap measure that doesn’t solve the structural problems of fragile economies.
Faced with this scenario, civil society is raising its voice and calling for a change of paradigm. The ‘Cambiare la rotta’ (Change Course) campaign, promoted by Catholic organisations, calls on interna-tional institutions to take action to ensure fair and sustainable debt management. The main proposal is clear: it is not enough to renegotiate payments: the debt burden must be significantly reduced so that countries can invest in their own development. In his message for the World Day of Peace in 2025, Pope Francis resolutely stated: “I encourage leaders of nations with Christian traditions to set an exam-ple by cancelling or significantly reducing the debt of the poorest countries.”
But these are not the only contradictions. The West accuses China of imposing on African countries a development model based on infrastructure investment at the cost of indebtedness. Yet the United States, Europe and Italy have adopted similar approaches. The European Union has launched Global Gateway, a €300 billion plan to finance infrastructure in partner countries. Although billed as a sustain-able alternative to China’s Belt and Road Initiative, in many cases it follows the same pattern, disburs-ing funds without a clear strategy to avoid becoming an unsustainable burden on the recipient econo-mies. Similarly, with its involvement in projects in Africa and the Middle East, Italy is consolidating its economic presence in emerging markets, in many cases without guaranteeing fair financial conditions for the recipient countries. If the West criticises Beijing for the so-called debt trap, why does it con-tinue to follow the same approach? And if the ultimate goal is equitable development, why don’t major international investors adopt a mechanism that guarantees economic and social sustainability? These questions remain unanswered while countries continue to pay the price of a system that perpetuates im-balances and dependencies instead of providing opportunities.
The debt crisis and the climate crisis are not separate emergencies, but two sides of the same coin.
Addressing these issues requires a collective commitment, recognising that the economic and environ-mental stability of the planet depends on decisions taken together. Debt restructuring and investment in sustainable development is not only a matter of acting justly towards the most vulnerable nations, but a necessity for the entire human family. The future of our planet is our shared responsibility, and redress-ing these inequalities is not a matter of charity, it concerns the survival of our global community.
(*) Missio Foundation
