JPIC Conference: Transforming Global Finance for Development

Group two at the conference

During Good Money Week (6 - 12 October) Sixteen religious, associates and friends met at the FCJ Spirituality and eco-justice centre in Euston, London, together with seven participants who joined via zoom, for the JPIC Links conference: 'Changing futures' (Transforming Global Finance for Development)

The day was held just after the Jubilee of Consecrated Life which Pope Leo XIV celebrated with the publication of his first Apostolic Exhortation, Dilexi Te (I have loved you).

In the Exhortation Pope Leo writes: 'The condition of the poor is a cry that, throughout human history, constantly challenges our lives, societies and economic systems, and not least, the Church.'

On a first read, I counted over ten places where Pope Leo speaks about the need for us to challenge the structures that trap people in poverty. He particularly mentions the effects of bad economic structures, 'Some economic rules' he says 'have proved effective for growth, but not for integral human development.' While later on he speaks of 'structures of injustice as a 'social sin'.

Released during the Jubilee of Consecrated life the Exhortation celebrates the role of religious together with men and women of the laity who 'grappled with the great issues of their time'. Today this collaboration is more necessary than ever for, 'The epochal change we are now undergoing makes even more necessary a constant interaction between the faithful and the Church's Magisterium, between ordinary citizens and experts, between individuals and institutions.' I can think of no better way of describing our JPIC Links conferences and work!

Our morning prayer echoed Pope Leo VIII encyclical, Rerum Novarum (of new things) 1891 including his assertion that financial practices must align with moral principles, urging that wealth should be used for the common good rather than solely for personal gain. It concluded with a prayer that asked God to give us the courage to steward resources well and for help in being faithful stewards today.

What are the global systems that trap people in poverty? In 2011 and following I presented the Global Poverty project's 'I'4 billion reasons to thousands of people. When asked during the presentation 'what is the biggest factor in ending poverty people invariably had 'Corruption' at the top of their list. I have no doubt that this is still the case today. But we clearly have it in our power to do something about corruption. A change in the global financial laws and framework is needed.

Francis Stewart from CAFOD then spoke about debt and the global finance system in Catholic Social teaching. God's justice is attentive to human needs. At its source is a richness of abundance that he wants for all people. He spoke of the three kinds of justice in Catholic Social Teaching:

- Distributive justice (the just allocation of resources and burdens by the community to its members),

- Commutative justice (the justice governing interactions between individuals), and

- Social justice (promoting the common good and correcting injustices within society).

There was a lively discussion and questions following Francis' talk. 'Foreign debt', he said is unjust because it 'has become a means of control. A sister from Ghana commented that 'Her country is said to be independent, but this is not so because of debt. The country is still a slave to the debt borrowed by the former colonial power and overseen by a global financial system controlled by the colonial powers'. He went into more detail of how this triad of Justices needs to be integral to UK life and governance. A deep sense of the Jubilee ethic of the bible would lead to a more just finance system, a better flow of goods and resources, enable all people to participate in the common good, better relations and attitudes towards others including migrants and refugees a desire to see that each person has what they need to live and a sense that we are all pilgrims entrusted with the care of the earth.

Our second speaker was Sunit Bagree, Senior Policy Advocacy Officer for Nutrition at Results UK.

Results is dedicated to 'creating the political will to end poverty' and Sunit spoke of how illicit financial flows are depriving nations of the means to create a just society where all have the means to live. Some of the 'unjust financial structures Sunit spoke about were:

Mis-invoicing

Mis invoicing is the deliberate falsification of the value, quantity, or quality of goods on an invoice for international trade. This can involve either over-invoicing (inflating the price) or under-invoicing (reducing the price) on documents submitted to customs. It is a method used for illicit activities like money laundering and tax avoidance and avoiding currency controls by shifting money across borders and into secrecy jurisdictions and Tax havens.

Secrecy jurisdictions

A secrecy jurisdiction is a country or territory that provides financial secrecy and undermines the laws of other nations through its regulations. It allows individuals and corporations to hide wealth, avoid taxes, or escape legal scrutiny by creating a legal barrier of secrecy, often involving low taxes, minimal transparency, and strong bank-client confidentiality. These jurisdictions can facilitate money laundering, tax evasion, and corruption by enabling the obscure ownership of assets and the illicit flow of money.

Tax Evasion

Hundreds of billions of pounds of tax are lost globally every year to tax avoidance.

This is money that should be going into building hospitals and schools, into paying for doctors, and teachers; reducing poverty, fighting climate change and improving ordinary lives in the UK around the world.

Instead, this money is disappearing into the offshore accounts of the super rich.

Tax havens

A tax haven generally is a country or jurisdiction that enables multinational corporations and individuals to escape the rule of law in the countries where they operate and live, and to pay less tax than they should in those countries.

New research shows that the world's top three corporate tax havens are all British Overseas Territories, The British Virgin Islands (BVI), the Cayman Islands and Bermuda came top in the new ranking of corporate tax havens, in fact a quarter of the world's tax dodging is enabled by the UK and its territories. It is an extra ordinary network of abuse controlled by the UK. The UK occupies a unique position in the global sovereign debt system, and thus has a particular responsibility to resolve debt crises gripping the Global South and to prevent future crises.

Good news

Sunit assured us that in spite of all the bad news progress is being made on many fronts, notably in the area of nutrition. He shared some of the good news briefings he is publishing with Results UK including breast feeding in Sierra Leone, how ready to use therapeutic food (RUTF) in Pakistan is combatting severe acute malnutrition and government-led school feeding programmes in Nigeria that provide safe, fresh, diverse, nutritious and culturally-appropriate school meals, using food sourced from local smallholder farmers rather than from (often subsidised) food aid or imported commodities. None of these projects would have happened without advocacy from ordinary citizens and civil society.

You can read more here: https://results.org.uk/publications/

In the afternoon Maria Finnerty, (lead economist at CAFOD) said we are at a pivotal point in global development. that global development has never been a more essential issue than at this moment of geopolitical tensions, escalating conflict, extreme inequality, and climate crisis

Global Debt

The world is facing the worst global debt crisis in 30 years. People in countries like Ghana and Sri Lanka are being robbed of an education and healthcare, their governments unable to deal with the climate emergency because their countries are trapped in unjust debt while alarming debt levels are threatening the world's security.

90% of private lenders are governed by UK law - laws which were drawn up in the city of London.

In the Jubilee year of 2000 following, 'Make poverty history' debts were written off but we didn't fix the system. Now vast debts are owed to private lenders, hedge funds, banks such as HSBC and investment banks such as Black Rock. Our bloated financial sector have no incentive to offer debt relief. $90 billion is lost each year to tax abuse in the British overseas territories. This money could be used in funding hospitals and hospices, for education, housing and roads.

We were shocked to hear that lenders are allowed to sue countries in debt distress. This happened in South Sudan where Afreximbank sued the South Sudan government. The High Court in London ordered South Sudan to pay the bank $657 million over loans for pandemic and infrastructure support. This is the equivalent of 47% of South Sudan's government revenue!

There is no adequate global debt system, no global body to set the rules and enforce them for the lenders run the system. A new UN led global debt framework is needed. The IMF needs reforming and the British government to change its laws. It makes economic sense; climate crises will drive up food and fuel prices in the UK. Mass migration will increase and security will be compromised for none of us benefit from living in a dangerous world. A change in the law would not cost the British taxpayer a penny, in fact British taxpayers' money is being used to bail out lenders such as Blackrock.

This year the USA and the ÚK have cut overseas development aid saying that we are 'in a new era of doing development' If indebted countries were able to use their resources for education, health, infrastructure and climate change mitigation then they would not be dependent on aid. $90 billion is lost to tax abuse by British Overseas Territories each year. Britain is a global debt and tax superpower capable of saving millions of lives and doing much to end poverty in the world by a change in its laws.

Our day finished with a Eucharist celebrated by Father Martin Poulson SDB in which we brought all our concerns to the table and prayed for the victims and perpetrators of injustice.

Pope Leo XIV says that: 'Unjust structures need to be recognized and eradicated by the force of good, by changing mindsets' and that 'all the members of the People of God have a duty to make their voices heard, albeit in different ways in order to point out and denounce such structural issues.'

There is a perception in the UK government that the British public don't care about suffering in the world, and international development. Do we in the Christian Church care? I think we do, so lets get writing, lobbying and petitioning.

It is Pope Leo's hope that 'we will see more and more politicians capable of sincere and effective dialogue aimed at healing the deepest roots and not simply the appearances of the evils in our world' This Jubilee year thousands of campaigners and activists are uniting to demand action on unjust debt. We working to encourage their MP's and governments to be 'development champions'. It's a pivotal moment to hope- and a moment to act. Why don't you join us?

See more here:

CAFOD - the debt crisis: https://cafod.org.uk/campaign/the-new-debt-crisis

Results UK: https://results.org.uk/actions/

Debt Justice - Cancel debt, choose hope!: https://debtjustice.org.uk/campaigns/no-new-debt-trap

Tax justice network - https://taxjustice.net/

Global financial integrity - https://gfintegrity.org/issue/trade-misinvoicing/

Transparency international - www.transparency.org.uk/