A new report backed by the late Pope Francis and top economists says today’s debt system is fueling crisis, not solving it. It calls for a relief wave — and deeper, lasting reforms.
Also in today’s edition: We look at the big news of the World Conference on Tobacco, and Gates comes through for Gavi.
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Livin’ on a prayer
The world’s drowning in debt — and a new report, commissioned by the late Pope Francis and backed by 30 top experts, says the system meant to help is actually making things worse. It calls for a “structural transformation” and a fresh round of debt relief on par with the 1996 Heavily Indebted Poor Countries, or HIPC, initiative, which wiped $100 billion in debt for 37 countries.
“Twenty-five years later, the world confronts another debt crisis,” the report says — but this time, private creditors are playing a bigger role, and fixes need to be deeper and longer-lasting. Led by Nobel Prize-winning economist Joseph Stiglitz and Argentina’s former economy minister Martin Guzman, the report drops midway through the Catholic Church’s Holy Year, or jubilee year, a moment for forgiveness and reform, my colleague Elissa Miolene writes.
“The issue here is not just that countries are defaulting on their debt, but that countries are defaulting on their development,” says U.N. envoy Mahmoud Mohieldin. The numbers are stark: 3.3 billion people live in countries that spend more on debt than on health or education.
In Africa, debt has outpaced gross domestic product growth for over a decade. And with low- and middle-income countries owing $11.4 trillion — 99% of their export earnings — many are stuck in a vicious cycle.
What happened? The COVID-19 pandemic, the Ukraine war, and a surge in interest rates meant institutions stepped in to help — but often, “they underwrote capital flight” and used funds not for development, but to keep private lenders happy. The result? “A quiet engine of future debt distress.”
The report calls for everything from a new “international bankruptcy court” to an overhaul of IMF policies — including a “no bailout” clause for governments repaying private debt. It also criticizes the rise of blended finance and public-private partnerships as “opaque” and ineffective.
Ultimately, it says, the world needs an HIPC II — plus fresh tools such as a Jubilee Fund backed by global reserves. As Rev. Charles Chilufya puts it: “They are entire nations, wounded by unjust debt, robbed of their futures, stripped of their dignity, and left bleeding by the side of the global financial road.”
Read: New Vatican-backed push for debt cancellation gains steam (Pro)
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No ifs, ands, or butts
Tobacco kills over 7 million people a year, and the World Health Organization has long pushed a proven playbook to cut use — including raising tobacco taxes to at least 75% of the price of popular cigarette brands. But most countries aren’t doing it.
Only 40 countries meet that tax mark, according to WHO’s new Global Tobacco Epidemic report. Between 2022 and 2024, just three countries — Belarus, Indonesia, and Palau — stepped up their taxes. And some that previously hit the target, such as Australia and Vanuatu, have since backslid.
Low-income countries — the ones that could really use the revenue — haven’t hit the 75% threshold at all since 2018. In places such as the Democratic Republic of Congo, a pack of cigarettes can cost as little as $0.99 (in purchasing power parity terms), and tobacco taxes are only 52.1% of the price.
Dr. Rüdiger Krech of WHO points to Sri Lanka, which raised 200 million rupees ($672,641) in just a year by hiking taxes on tobacco and alcohol. “That money offers countries extra funds to pay for health, but also other areas, including social protection,” he says.
A draft U.N. declaration now calls for 80% of countries to raise taxes on tobacco, alcohol, and sugary drinks to WHO-recommended levels by 2030 — especially critical as aid cuts gut many health programs.
“The reduction in funding for global health is a huge catastrophe for many things. [But] actually, tobacco control is one area which should be less affected,” says Guy Marks, president of The International Union Against Tuberculosis and Lung Disease, pointing out that it can be funded by taxes on the product.
So why the reluctance? “There are huge political and other interests in countries that support the sale of tobacco,” Marks says. “We need to make sure that governments actually are committed to ending tobacco as a problem. … Those two things don’t happen together. Until that happens, we won’t succeed.”
Read: Low-income countries are missing out on tobacco tax gains amid aid cuts
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Mike drop
Philanthropist Michael Bloomberg is doubling down on his tobacco control mission — this time with a fresh $20 million Accelerator Fund announced on Monday at the World Conference on Tobacco Control in Dublin, my colleague Jenny Lei Ravelo writes.
The goal? Help more countries roll out proven measures such as smoking bans, ad restrictions, and higher cigarette taxes. Since 2005, Bloomberg Philanthropies has poured $1.6 billion into the fight — and Bloomberg says those efforts have helped save more than 35 million lives.
Still, progress is patchy. Fighting tobacco “has only gotten harder,” Bloomberg admitted, citing stalled momentum in many low- and middle-income countries. With U.S. funding cuts hitting tobacco programs hard, Bloomberg promised to keep the pressure — and the funding — going. “Global public health is a driving passion, a major priority, and we are not going to back off. Not one inch,” he told the crowd.
Read: Michael Bloomberg announces new $20M fund for tobacco control
A shot at survival
The Gates Foundation announced yesterday that it would commit $1.6 billion to Gavi, the Vaccine Alliance from 2026 to 2030 — the same amount the foundation pledged to Gavi’s five years of programming in 2020. Since 2000, the foundation has directed $7.7 billion to Gavi, making it Gates’ largest grantee.
The pledge was announced just before a much-anticipated, high-level replenishment event for Gavi in Brussels today — co-hosted by the European Union and the Gates Foundation. This event is the final culmination of a year of fundraising for Gavi, which launched its investment round last June.
Gavi is seeking at least $9 billion in new donor funding to support its upcoming five years of programming, my colleague Sara Jerving tells me. The organization placed the total budget for this period at $11.9 billion — but $2.9 billion is available as funding that will be carried over.
The Gates Foundation wrote in a release that this event happens “amid a global crisis” as foreign aid plummeted this year and international development programs “have been severely impacted by declining budgets and shifting political priorities.”
“For the first time in decades, the number of kids dying around the world will likely go up this year instead of down because of massive cuts to foreign aid,” wrote Bill Gates, encouraging others to back the organization's work. “Fully funding Gavi is the single most powerful step we can take to stop it.”
Related reading:
• How the Gates Foundation spent $5.4 billion in 2024 (Pro)
• How Gavi is reaching ‘zero-dose’ children in conflict areas (Pro)
In other news
A Lancet study found that global childhood vaccination rates have plummeted worldwide since 2010, with vaccine hesitancy, health care inequity, and the COVID-19 pandemic disruptions driving declines. [The Telegraph]
Over 40 people, including children and health care workers, were killed in an attack on a hospital in Sudan. [Reuters]
The World Bank granted South Africa a $1.5 billion loan to upgrade transportation infrastructure and help it transition toward a low-carbon economy. [AP]
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About the author
Helen Murphy
Helen is an award-winning journalist and Senior Editor at Devex, where she edits coverage on global development in the Americas. Based in Colombia, she previously covered war, politics, financial markets, and general news for Reuters, where she headed the bureau, and for Bloomberg in Colombia and Argentina, where she witnessed the financial meltdown. She started her career in London as a reporter for Euromoney Publications before moving to Hong Kong to work for a daily newspaper.
