A Christian Commentary on LDC Debt

Abstract

The total of foreign debt of less developed countries (LDCs) is so great that only a modest part of the interest and principal due is ever likely to be paid. The dilemma of the situation is that further capital inflow is necessary for growth and poverty relief, but is unlikely to be granted because of non‐servicing of existing debt and governmental instability within the LDCs. Christian commentary on LDC debt is so often simplistic, condemning lenders and urging forgiveness of principal due and interest, write‐downs of loans and lower interest rates. In addition to the moral and humanitarian issues raised, due weight should be given to financial and economic analysis. A statement issued by the Political Commission for Justice and Peace provides a model of Christian comment on the eventual solution of the debt crisis, outlining ethical principles concerning the assistance wealthier countries should extend to LDCs, disclaiming technical recommendations as the Church′s role, and calling upon industrialised countries to draw up fresh plans for co‐ordinated assistance for LDCs, while stressing that the latter should put their houses in order.

Citation

McKee, A. (1991), "A Christian Commentary on LDC Debt", International Journal of Social Economics, Vol. 18 No. 4, pp. 25-36. https://doi.org/10.1108/EUM0000000000467