A major new report, commissioned by the late Pope Francis and spearheaded by Nobel-winning economist Joseph Stiglitz, has called for a sweeping “HIPC II” initiative—a renewed debt-relief effort—to help developing countries struggling under crushing financial burdens. Released today ahead of the upcoming United Nations Financing for Development Conference in Seville, Spain, the Vatican-backed Jubilee report warns that escalating debt servicing is undermining vital public expenditures and exacerbating extremes of poverty and social fragmentation.
The panel, drawing comparisons with the original Heavily Indebted Poor Countries program of the early 2000s, says many nations, especially across Africa, now allocate more funds to external debt payments than to essential education and healthcare systems. In sub-Saharan Africa alone, the report notes that approximately 57 percent of the population—nearly 751 million people, including 288 million living in extreme poverty—reside in countries where debt-service obligations outstrip investment in human development. The consequence is grim: rising rates of malnutrition, curtailed opportunities, weakened public institutions and a mounting threat of social unrest.
Stiglitz, who chaired the expert panel, described the current environment as a “perfect storm.” He emphasized that pandemic-induced borrowing, compounded by soaring global interest rates and tighter monetary conditions, has drastically limited fiscal space for low-income countries. With little remaining flexibility and global economic headwinds intensifying, many governments—while avoiding defaults—have been forced into a false choice between servicing debts or sustaining core services.
The report zeroes in on a critical shift in debt dynamics over the past two decades: whereas early HIPC-era loans were predominantly owed to public institutions, today a growing share is held by private creditors and emerging lenders, including Chinese banks. This fragmentation makes coordinated debt forgiveness more complicated. To tackle this challenge, the authors propose a suite of legal instruments: enforceable international standards compelling private creditors to share in debt relief, as well as a “no bailout clause” to prevent multilateral rescue funds—like those from the IMF—from being diverted toward repaying private investors for developing countries.
Reuters coverage underscores that structural reforms are also recommended, such as establishing high-level jurisdictional safeguards in key financial centers like London and New York to ensure equitable creditor participation. Mariana Mazzucato, a member of the Vatican commission, warns that the current financial framework perpetuates boom-and-bust cycles. She advocates for sustained public investment strategies to escape a development trajectory undermined by speculative debt.
The timing of the report dovetails with the Catholic Church’s designation of 2025 as a “jubilee year,” recalling the original Jubilee 2000 campaign that led to over US$100 billion in cancellations under the first HIPC initiative. The Vatican plans to present the findings to Pope Francis’s successor, Pope Leo XIV, today, amplifying calls for global action.
At the United Nations summit in Seville, governments will debate elements of the report’s recommendations. Draft documents already include commitments to intergovernmental processes intended to close existing gaps in sovereign debt architecture. Nonetheless, these placeholders fall short of the more ambitious framework sought by African countries, which have demanded sweeping, multilateral mechanisms capable of preventing and resolving crises equitably.
Amid mounting pressure, campaigners—including more than 80 UK charities and prominent leaders—are urging the Prime Minister and finance ministers of OECD countries to endorse legal reforms that would bind private lenders to the debt relief process. Some experts caution that without immediate, bold intervention, emerging economies may grapple with an entire “lost generation” unable to sustain post-pandemic progress .
Taken together, the report is a clarion call: without decisive, coordinated debt relief, developing countries may be forced to continue sacrificing education, health and climate resilience at the altar of creditor returns—perpetuating cycles of inequality, fragility and frustration that threaten global stability.
