Christian groups appeal to IMF to do more for poor nations as global economy falters

The World Bank and International Monetary Fund met in Washington this week, and street closures around town have not been the only bad news. In its biannual World Economic Outlook , released to coincide with its spring conference (April 13-April 18), the I.M.F. issued downward revisions on global economic growth and an upward revision on inflation. Its researchers report that while the world economy had weathered the tariff turmoil and miscellaneous threats to trade generated by the Trump administration surprisingly well, the war in the Middle East will have an impact world markets cannot escape. The I.M.F. now projects that worldwide growth in 2026 will decline from the 3.3 percent predicted in January to 3.1 percent. It adds that inflation will likely come in at 4.4 percent instead of the 4.1 percent predicted at the beginning of the year. To nonspecialists, that may not seem like much of a change, but in the most vulnerable low-to-middle-income states around the world, even tiny depreciations in growth and small hikes in inflation have a vastly amplified impact. The war is leading to spikes in fuel, transport, fertilizer and agricultural costs that will eventually make their way into food markets—especially as the current bad news is accompanied by the collapse in humanitarian aid set off by the Trump administration’s shutdown of the U.S. Agency for International Development last year. A new round of heightened military spending by the United States and among its exasperated allies in the European Community have also contributed to the tightening of humanitarian assistance from affluent states. And economic conditions could deteriorate much further if the standoff between the United States and Iran in the Strait of Hormuz, which has brought fossil-fuel shipments around the world to a standstill, continues much longer. Nations already facing significant food insecurity may be pushed to the edge by this perfect storm of negative geopolitical conditions. Reviewing the impact of debt and climate change on low-income states, Ivana Vasic-Lalovic, a senior research associate at the Center for Economic and Policy Research, said in a recent blog post: “Developing countries shouldn’t have to choose between paying off debt and funding schools, hospitals, or climate preparedness and response. S.D.R.s to the rescue? So while the suits gather in Washington to grimly plot the world economy for 2026-2027, is there any good news to report? Diane Koorie, R.S.M. , insists she has found some. She is also confident it is related to an issue that easily crosses partisan and religious lines. An I.M.F. move to relieve international debt burdens in 2021 during the Covid-19 pandemic has demonstrably saved thousands of lives , she says. A new issuance of an I.M.F. currency instrument, Special Drawing Rights, could do the same now, she says, lifting some of the economic gloom caused by the war and allowing low-income states to maintain life-saving health programs and more. Sister Koorie has been keeping her retirement in Oklahoma City active by focusing on what she calls “nerdy advocacy” with the Sisters of Mercy of the Americas Justice Team. “Advocacy is good work for old age,” she observes with a laugh. This week the Sisters of Mercy, joined by both faith-based and secular economic justice advocates—including Bread for the World , Oxfam USA , the Center for Economic and Policy Research , Action Corps , Christian Connections for International Health and Partners in Health —hope to reach Catholic and other Christian leaders in the Trump administration and Congress with a special appeal . The humanitarian and economic activists and researchers want to get U.S. representatives at the I.M.F. and World Bank to press for another S.D.R. issuance. S.D.R.s are an international reserve asset , acting somewhat like a national line of credit, first created by the I.M.F. in 1969 to supplement member nations’ official World Bank reserves. Essentially, an I.M.F. member state facing debt service pressure or struggling to locate resources to pay for health care, education or infrastructure improvements can tap into its S.D.R. allotments to reduce its debt load or to convert its S.D.R. allocation into hard currency, like U.S. dollars, that will pay for those public goods back home. Best of all, Sister Koorie points out, S.D.R.s can be issued without making additional foreign aid demands on U.S. taxpayers or adding to the debt burden of struggling low-income countries. The coalition including the Sisters of Mercy notes in its letter to the Trump administration: “Around the world, preventable suffering is rising at the very moment that many countries are losing the financial capacity to respond. Millions of children continue to die each year before their fifth birthday from largely treatable conditions.... Over a million deaths per year are attributable to unsafe water, and inadequate sanitation and hygiene.” The letter continues: “At the same time, the financial environment facing low- and middle-income countries has deteriorated sharply. Nearly half of humanity lives in countries that spend more on debt servicing than on public health. Research from the Bank for International Settlements has shown that economic contraction and fiscal tightening in vulnerable economies are associated with measurable increases in mortality. When budgets shrink, access to care shrinks—and lives are lost.” According to the coalition, the I.M.F.’s $650 billion allocation of S.D.R.s in 2021 “provided a lifeline to suffering countries amid the Covid-19 pandemic, and demonstrated the unique effectiveness of S.D.R.s at stabilizing the global economy during shocks.” “A new issuance could enable countries to invest in primary care, maternal health, vaccination programs, disease surveillance, and basic water and sanitation infrastructure,” the letter continues, saving “hundreds of thousands of lives.” The letter calls a new S.D.R. allocation “a prudent and practical tool” against preventable suffering. It is also a practical tool that can lead to more trade and job creation in the developed world. Sister Koorie points out that indebted states “can use that money to buy Oklahoma wheat and soybeans.” Sister Koorie is urging U.S. Catholics and people of good will to join S.D.R. advocacy . She says that because of the influence wielded by the United States at the I.M.F., a new issuance would be a sure thing if U.S. Secretary of Treasury Scott Bessent could be persuaded to support the idea. But activists may have their work cut out for them. Mr. Bessent has dismissed the I.M.F./World Bank’s pessimistic trade revisions on April 14 as an overreaction to the Iran war’s impact. Sister Koorie prefers to live in hope not only that Mr. Bessent can be persuaded to get on board, but that much more can be done to address global inequities, especially in life-saving health care efforts worn down by Covid-19 and now abandoned by wealthy nations like the United States that used to fund them . “Just because the Jubilee year is over, it doesn’t mean we’re no longer pilgrims of hope,” she says, referring to the efforts led by Pope Francis during the church Jubilee in 2025 to review and reform the world global debt system and its often oppressive impact on people in developing nations. “It means we carry on as pilgrims of hope. We stay with the work and persevere. It’s definitely the slow work of God, but it does make a difference.” When growth alone won’t work Economists have long held that the best prescription for escaping the indignities of poverty is faster growth, but many acknowledge now that global economic conditions have become so precarious that growth alone is no longer a reliable fix. Many urge a renewed willingness to critically assess structural flaws in the global economy that are heightening disparities and contributing to global immiseration. That includes I.M.F. researchers, not exactly known for radical interpretations of economic data. “The nature of today’s fiscal challenges has shifted,” a group of them argued in a recent blog post . “Weaknesses are no longer mainly cyclical or the result of temporary emergencies, but are structural: security spending, climate and energy transition costs, and rising interest bills are placing persistent demands on budgets, while revenues have not kept pace.” “In this environment, every choice on revenue and spending has more lasting consequences. Waiting for growth alone to do the work is a very risky proposition. When pressures are structural, delaying consolidation does not buy time. It instead narrows options and raises risks.” The Center for Economic and Policy Research adds on its own blog : “The global debt outlook for developing countries remains highly precarious after years of successive shocks to the world economy. “The U.S.-Israeli war on Iran has intensified pressures on global energy markets, pushing oil prices temporarily over $100 a barrel, increasing the cost of imports, and threatening food security and balance of payments stability for many countries.” Poor nations were already contending with the lingering effects of the pandemic, the C.E.P.R. researchers wrote, as well as “the commodity and supply chain disruptions triggered by the war in Ukraine, rising trade fragmentation, and weak global growth.” Low-income states may not be able to break out of poverty through growth when they are unable to shake off the burden of international debt. And with U.S. debt approaching $40 trillion—now exceeding 122 percent of the U.S. annual G.D.P. —that same unpleasant weight could be something Americans may begin to feel themselves. More from America Trump’s foreign aid freeze a ‘death sentence’ for many humanitarian groups No waivers for Catholic relief efforts: The devastating impacts of the end of U.S.A.I.D. Nobel-winning economist Joseph Stiglitz on Pope Francis, Trump, jubilee and debt forgiveness Debt relief advocates make their case to Joe Biden before he leaves the White House A deeper dive What is the S.D.R.? The Good, the Bad, and the Ugly: U.S. Foreign Aid Global Economy in the Shadow of War New Report Warns of Growing Debt and Climate Crises in Developing Countries The Cost of Debt in a Time of Overlapping Crises The Weekly Dispatch takes a deep dive into breaking events and issues of significance around our world and our nation today, providing the background readers need to make better sense of the headlines speeding past us each week. Last time: Settler violence on West Bank threatens ancient Christian communities. Will the U.S. help preserve them? For more news and analysis from around the world, visit Dispatches . This week: As Trump threatens Cuba, refugees relive their journey to America and South Africa’s Cardinal Brislin: Trump cannot silence Pope Leo or the church .