The great strides over the past two decades to overcome global poverty have been reversed by the covid19 pandemic. The World Bank estimates that the number in extreme poverty will grow by 119 to 124 million by the end of this year.
Hence, the importance of a recent letter by Pope Francis to a meeting of the World Bank and International Monetary Fund (IMF) setting out guiding moral principles for an economic recovery.
The IMF was established in 1945 to reconstruct the international financial system and today plays a role in management of balance of payments difficulties some countries experience and managing financial crises. The World Bank was established in 1944 to help develop low and middle income countries. Both were part of the Bretton Woods Agreement, at the end of World War II, for multilateral cooperation and to foster growth among the participating countries.
Pope Francis told the IMF and World Bank meeting that a model of recovery must not “be content to a return to an unequal and unsustainable model of economic and social life, where a tiny minority of the world’s population owns half of its wealth.”
He said that if there is one thing the pandemic has reminded us, it is that “once again that no one is saved alone. If we are to come out of this situation as a better, more humane and solidary world, new and creative forms of social, political and economic participation must be devised, sensitive to the voice of the poor and committed to including them in the building of our common future.”
He makes three key points:
First, a new global plan is needed and renewed or new institutions will be needed.
To this end, he said that while developed countries are focused on their own recovery plans,
“…there remains an urgent need for a global plan that can create new or regenerate existing institutions, particularly those of global governance, and help to build a new network of international relations for advancing the integral human development of all peoples. This necessarily means giving poorer and less developed nations an effective share in decision-making and facilitating access to the international market.
A spirit of global solidarity also demands at the least a significant reduction in the debt burden of the poorest nations, which has been exacerbated by the pandemic. Relieving the burden of debt of so many countries and communities today, is a profoundly human gesture that can help people to develop, to have access to vaccines, health, education and jobs.”
Second, he said that it is time to recognise that markets need governing, given how financial markets are used for speculation, and that the principle of solidarity was important in new governing arrangements.
He said it must be acknowledged that
“…markets – particularly the financial ones – do not govern themselves. Markets need to be underpinned by laws and regulations that ensure they work for the common good, guaranteeing that finance – rather than being merely speculative or financing itself – works for the societal goals so much needed in the context of the present global healthcare emergency. In this regard, we especially need a justly financed vaccine solidarity, for we cannot allow the law of the marketplace to take precedence over the law of love and the health of all. Here, I reiterate my call to government leaders, businesses and international organizations to work together in providing vaccines for all, especially for the most vulnerable and needy: (cf. Urbi et Orbi Message, Christmas Day 2020).
Third, central to development plans was a need to ensure the universal common good.
“…central to a just and integrated development is a profound appreciation of the essential objective and end of all economic life, namely the universal common good. It follows that public money may never be disjoined from the public good, and financial markets should be underpinned by laws and regulations aimed at ensuring that they truly work for the common good. A commitment to economic, financial and social solidarity thus entails much more than engaging in sporadic acts of generosity. “It means thinking and acting in terms of community. It means that the lives of all are prior to the appropriation of goods by a few. It also means combatting the structural causes of poverty, inequality, the lack of work, land and housing, the denial of social and labour rights… Solidarity, understood in its most profound meaning, is a way of making history” (Fratelli Tutti, 116).