London, May 3: The death of Pope Francis and a wave of global aid cuts led by the United States have thrown uncertainty over the Vatican’s renewed push to deliver debt relief and fairer financing to developing nations.
The effort, spearheaded by a group of economists and policy experts known as the “Jubilee Commission,” had planned to present a draft proposal to the Vatican on May 16. However, the Pope’s death and the upcoming conclave to choose his successor, set to begin on May 7, have delayed those plans, commission members said.
The commission unveiled its initial framework during last week’s IMF and World Bank spring meetings in Washington. But discussions on boosting development funding and concessional finance took a backseat at the global forum, amid renewed geopolitical tensions and a shifting donor landscape.
“For any finance minister or central bank governor of a developing country, it is a depressing takeaway from the meetings,” said Reza Baqir, head of sovereign debt advisory at Alvarez & Marsal and a former governor of Pakistan’s central bank.
U.S. Treasury Secretary Scott Bessent told attendees that Washington has not yet decided whether it will fulfil a $4 billion commitment to the International Development Association (IDA), the World Bank’s concessional lending arm for the poorest countries. That uncertainty threatens to undermine a targeted $100 billion funding round, with World Bank President Ajay Banga warning it could fall as low as $80–85 billion.
Aid spending from major donors including the U.S., UK, Germany and France has been shrinking as defence priorities take precedence. According to the OECD, official development assistance declined 7.1% in real terms last year, and may contract by up to 17% in 2025. The ONE Campaign estimates aid could shrink by 23% by 2027.
Developing countries are also grappling with tighter global financing conditions. A rise in U.S. Treasury yields has priced many out of bond markets, while higher debt servicing costs have forced some to implement austerity measures that risk cutting essential services.
“More countries will be forced to choose between honouring their debt and ensuring their future,” said Paolo Gentiloni, co-chair of the U.N. Expert Group on Debt.
The Vatican’s initiative echoes the 2000 Jubilee Year, which secured billions in debt forgiveness. But today’s creditor landscape is more complex, with China now a major lender to many of the same nations. Beijing’s lending has slowed in recent years, amid a wave of developing country defaults and pressure from U.S. tariffs.
Commission Chair Joseph Stiglitz said the group is taking a long-term approach, with proposals aimed at accelerating sovereign debt restructurings and expanding access to affordable finance.
“It is clear that we haven’t solved the problem in any way,” the Nobel laureate said. He described the ongoing tariff wars as a “hand grenade” that could inflict disproportionate damage on developing nations.
S&P Global Ratings has warned that sovereign defaults are likely to become more frequent as borrowing costs rise. Vera Songwe, chair of the Liquidity and Sustainability Facility and a Jubilee Commission member, said work is underway to strengthen funding from development banks and incorporate climate risk into debt sustainability frameworks—but progress remains too slow.
“Sixty percent of growth is happening in the developing world,” Songwe said. “If there is a slowdown, the world slows down with them.”
