During the past months, developments related to the global economy and environment rapidly unfolded that bear watching. For one, as it heads into recession, the European economy is struggling to prevent a financial meltdown amid fears of debt default by the Greek and Italian governments.  Already, many people in the European Union are reeling from a 10% unemployment rate (as high as 49% among Spanish youth) and material deprivation or poverty rate of 15%.

Invoking privatization and deregulation principles championed by the International Monetary Fund (IMF), World Bank (WB) and the European Central Bank, the governments of the European Union and Eurozone coddled at length and gave free rein to private European banks and bondholders to use these banks' US$ 55 trillion in assets, mainly for profit, in runaway financial speculation in debt rather than for much-needed public goods, services and employment, as in green energy and environmental protection.  They allowed unaffordable and heavy public debt (in the case of Greece, Italy and Eurozone, 160%, 120%, and 85% of GDP respectively, to accumulate and milk already distressed working taxpayers.  As skyrocketing interest rates squeezed government budgets into bankruptcies and debt defaults, they imposed even more impoverishing "austerity" cutbacks in government jobs, wages, and social services and more privatization of state firms.  In a vicious downward spiral, the resulting deepening of poverty and economic inequality would further stagnate and depress the European economy and would make repayment of government debt, especially in Greece and Italy, even more oppressive, if not impossible.

However, although people in Europe are indeed being battered by the economic turmoil, it is the developing world led by poor Asian countries that bear the brunt of the global economic crisis.  It is in Asia where most of the world's over 200 million unemployed and the world's more than 1 billion people living on less than a dollar a day are found.

Since 1945, the so-called Bretton Woods institutions, the IMF and the WB, supervised many of these Asian economies.  These two organizations oversee a foreign debt burden among developing economies now over US$ 2 trillion, of which more than US$ 200 billion in interest payments alone are channeled to external lenders yearly.  The bulk of this heavy and impoverishing debt burden is borne by poor underdeveloped Asian economies who, in exchange for external loans, are pressured into accepting policies such as more deregulation, more privatization, and future cuts in government education, health, and other services.  This situation is widening the gap between rich and poor within countries, and between rich and poor nations.

According to the Global Wealth Report, released in October 2010 by the research institute of, ironically, a multinational European bank, Credit Suisse, 0.5% of the global population owns 35.6% of global wealth; 8.0% of the global population owns 79.3% of global wealth; and the bottom 60% of the global population owns only 4.2% of global wealth.  Former World Bank president James Wolfensohn himself admitted that the richest countries such as the US, Canada, and Australia hold over 80% of the world's GDP.  Whereas in 1870, the richest countries were estimated to be 15 times wealthier than the poorest countries, they are now estimated to be 45 times wealthier than the poorest countries.

Although the majority of the people affected by these global financial policies are Asian, it is the Western governments and financial ministers that traditionally dominate the IMF and WB and largely decide how the global economy is run.  In the face of global underdevelopment and poverty, they prescribed what civil society has often argued is part of the problem rather than the solution: more debt and more of the same policies that widen the gap between rich and poor.  Recently, the Occupy movement put the spotlight on global greed and economic injustice but has so far avoided proposing concrete alternatives to the current global economy.

One concrete alternative response to the crisis is that proposed by the Pontifical Council on Justice and Peace in its document, "Towards Reforming the International and Monetary Systems in the Context of Global Public Authority" released last 24 October.

First of all, the paper highlights the massive inequality and injustices in distribution of wealth and power within countries and between the rich and poor countries.  The report argues:

"But the inequalities within and between various countries have also grown significantly.  While some of the more industrialized and developed countries and economic zones - the ones that are most industrialized and developed - have seen their income grow considerably, other countries have in fact been excluded from the overall improvement of the economy and their situation has even worsened...At the same time, however, the distribution of wealth did not become fairer but in many cases worsened."

Second, it traces this injustice to "economic liberalism" and "neo-liberal thinking" or dogma, and to utilitarian individualism in place of upholding above all the common good.  It describes the neo-liberal philosophy in this way:

"It purports to derive the laws for how markets function from theory, these being laws of capitalistic development, but it exaggerates certain aspects of markets and downplays or ignores others...and risks becoming a tool subordinated to the interests of the countries that effectively enjoy a position of economic and financial advantage."

The analysis reflects that of Pope Benedict XVI, who, in July 2011, described persistent world hunger as a tragedy driven by selfish and profit-driven economic models.

Third, the Council is opposed to a world financial and monetary system that is primarily speculative, which is what prevails in the global economy today and which it views as harmful to the real economy, especially to the weaker countries.

Fourth, it describes global policy and decision-making as skewed toward representing the interests of rich developed countries and their governments and private lobby groups.  It describes the current global power structure in this way:

"Again in the last part of the twentieth century, there was a growing tendency to define the strategic directions of economic and financial policy in terms of ‘clubs' and of larger or smaller groups of more developed countries.  While not denying the positive aspects of this approach, it is impossible to overlook that it did not appear to respect the representative principle fully, in particular where the less developed or emerging countries are concerned."

Fifth, on the basis of papal encyclicals such as Pope John XXIII's Pacem in Terris, Pope Paul VI's Populorum Progressio, and Pope Benedict XVI's Caritas in Veritate, the Council proposes that the global economy be managed by an alternative global political authority guided instead by global common good and solidarity, the provision of public goods including protection of the environment, and at the same time, the principle of subsidiarity.  The proposal echoes the call of Pope Benedict XVI last 18 August 18 people, not profit, be the center of the economy.

Environmentalists, scientists and forest communities would appreciate the timely and profound relevance of such a call from the Vatican for meaningful global change and for authentic human development.  If realized, such a major change in global distribution of power could give voice to and empower marginalized Asian forest communities.  It could also help reshape the global inequalities in wealth and eradicate the poverty of countries as in Asia that contributes to the degradation of its natural forests.

For the complete document "Note on the reform of the international financial and monetary systems in the context of global public authority" released by the Pontifical Council for Justice and Peace, please see Vatican Radio.