IMF Reports Global Growth and Releases New Ways to Predict Economic Crisis

The International Monetary Fund (IMF) releases its biannual report on global economic stability and presents new indicators it says can help predict financial crisis.

"The IMF is trying to put better tools in place to predict financial crisis and impediments to economic growth," noted Eric LeCompte who tracks IMF reports as the Executive Director of the religious development coalition Jubilee USA. "While the IMF is looking at better ways to predict crisis, we still have not put in place the actual tools to prevent financial crisis."

On Thursday morning, LeCompte is moderating a special panel at The Fund ahead of the annual meetings on financial crisis prevention. Dr. Steven Schwarcz will present new policy instruments that can resolve debt and financial crisis. Tirivangani Mutazu of African Forum and Network on Debt and Development (AFRODAD) will explain why prevention is necessary as developing countries experience new debt crises. 

"The IMF's report warns of increased credit risks and we are more concerned now with unstable debt loads in both poor and wealthy countries," stated LeCompte who serves on United Nation finance expert groups.‎ "I'm concerned that high debt burdens and more risky market behavior will lead to another financial crisis sooner than later."

Yesterday, the IMF released its biannual World Economic Outlook report, which warned about climate impacts on vulnerable countries.

Read about Jubilee USA's IMF panel on policies to prevent financial crisis

Read Jubilee USA's release on the IMF's World Economic Outlook Report

Read International Monetary Funds October 2017 World Economic Outlook Report

 

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IMF Warns Climate Impacts on Poor Countries Can Affect Growth and Stability

The International Monetary Fund (IMF) released its biannual report on the state of the global economy, predicting that economic growth for several wealthy countries will continue.

"‎The IMF is warning that poor countries don't have the resources to protect against climate-related changes," noted Eric LeCompte, the Executive Director of Jubilee USA and an expert on United Nation finance groups. LeCompte has tracked IMF economic reports since 2010. "We can look at the string of hurricanes that hit poor Caribbean countries to see that poor economies are not equipped to deal with natural disasters."

Dominica, Antigua and Barbuda, Puerto Rico and the US Virgin Islands are among several Caribbean economies struggling to recover from this year's hurricane season.

"Beyond dealing with stronger and more frequent storms, the IMF sees vulnerabilities for poor countries who need to deal with food and poverty issues caused by climate changes," commented LeCompte on the climate elements of the report.

The World Economic Outlook report notes that while growth for some developed countries is on the "upswing," the growth is still lower than expected.

"While some growth is positive, too many poor and developing countries have yet to recover from the global financial crisis," stated LeCompte.‎

Read International Monetary Fund's October 2017 World Economic Outlook Report‎

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Philadelphia Inquirer Talks with Eric LeCompte about Puerto Rico Debt Crisis

Eric LeCompte, Executive Director of Jubilee USA was recently featured in The Philadelphia Inquirer speaking on Puerto Rico. Read excerpt below and follow link to full article.

Forgiveness Alone Won't End Puerto Rico's Debt Crisis

By: Joseph DiStefano

"Meanwhile, hundreds of thousands of Puerto Ricans fled to the U.S. mainland. 'You can buy a $60 one-way ticket to Miami or an $89 ticket to New York, and you are a citizen here,' LeCompte says. Residents of storm-wracked, independent, and broke Caribbean islands such as Dominica and Antigua-Barbuda are still more desperate, seeking shelter from relatives abroad. Those islands face effective takeover by the International Monetary Fund.

Could even rich U.S. states such as Pennsylvania and New Jersey, where politicians try to paper over billion-dollar budget gaps by urging residents to gamble more, get like this? Bankruptcy and forgiveness aren’t enough, LeCompte concludes: 'There need to be protections in place for responsible lending and responsible borrowing. Public budget transparency. Bond market regulations. Or you’ll get more financial crises as bad as things got in Puerto Rico.'"

Read more here.

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Trump Calls for Puerto Rico's Debt to be "Wiped Out"

In an interview with Fox News on Tuesday, President Trump called for Puerto Rico's debt to be wiped out. "They owe a lot of money to your friends on Wall Street and we're going to have to wipe that out. You're going to say goodbye to that, I don't know if it's Goldman Sachs, but whoever it is you can wave goodbye to that," Trump said.‎

"Puerto Rico can't recover with the debt it has," said Eric LeCompte, Executive Director of the religious development organization Jubilee USA. LeCompte worked on emergency Puerto Rico debt crisis legislation that Congress passed last year. "Puerto Rico was already undergoing a bankruptcy process that was going to substantially cut the island's debt. Now that bankruptcy process needs to access the hurricane damage and cancel even more of the debt."

Just yesterday, religious leaders from Puerto Rico and the US Virgin islands issued a statement calling for aid, debt relief and measures to end child poverty. The statement was signed by San Juan's Catholic Archbishop, Roberto González Nieves, St. Thomas' Catholic Bishop Herbert A. Bevard and Evangelical Bible Society Head Reverend Heriberto Martínez. Puerto Rico and the US Virgin Islands, both US territories, were wrestling with financial crisis and high child poverty rates before the Hurricanes Irma and Maria struck.

"The US Virgin islands were also severely damaged from the hurricanes," continued LeCompte. "They too need debt forgiveness and aid to help recover. Unfortunately, unlike Puerto Rico, the Virgin Islands doesn't have a bankruptcy process to cut the debt."

Read the religious leaders' statement in Englishen español 
 
Read Eric LeCompte's statement on the crisis
 
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USA Today Cites Eric LeCompte on Puerto Rico

Eric LeCompte, Executive Director of Jubilee USA was recently cited in USA Today speaking on Puerto Rico. Read excerpt below and follow link to full article. 

6 Reasons Why Puerto Rico Slid into Financial Crisis

By: Nathan Bomey

"'There’s no way for Puerto Rico to be able to rebuild, let alone recover, unless the debt is canceled,' said Eric LeCompte, executive director of Jubilee USA Network, a religious coalition that's fighting for Puerto Rico debt relief. 'Fortunately for Puerto Rico that process is in place.'"

Read more here.

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Value Walk Interviews Eric LeCompte on Puerto Rico

Eric LeCompte, Executive Director of Jubilee USA was recently featured in Value Walk speaking on Puerto Rico's debt crisis. Read excerpt below and follow link to full article.

Expert Who Helped Craft PROMESA Act: President Trump Is Right, Bondholders Could Lose Everything

By: Mark Melin

"LeCompte pointed out that the super bankruptcy process includes a key provision that pins debt payments to the economic ability of a sovereign region to pay. The provisions of the PROMESA act are more sweeping in this regard than credit leniency afforded to states or other sovereign governments, he said.

'There has been an acknowledgment from island’s oversight board that hurricane relief takes priority,' LeCompte said, noting that money earmarked to pay bondholders is currently being diverted to hurricane relief. There is a significant likelihood that a large portion of the debt will be forgiven, he said. The issue is entirely up to the bankruptcy judge. 'Bankruptcy judge has tremendous authority to cut and cancel the debt,' with one 'best case scenario' for bondholders being that they may receive restructured bonds that are linked to economic growth, a notion that LeCompte championed in other debt crises such as Argentina and Greece. The concept for the super bankruptcy process is based, in large part, on the 1953 London Agreement, which forgave German war debt and allowed the nation to experience tremendous economic growth."

Read more here.

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Between the Lines Interviews Eric LeCompte on Debt Relief Following Hurricanes

Eric LeCompte, Executive Director of Jubilee USA was recently featured in Between the Lines speaking on debt relief. Read excerpt below and follow link to full article.

Urgent Call for Debt Relief After Hurricane Shatters Puerto Rico and U.S. Virgin Islands

By: Scott Harris

"'In particular, we definitely want the bankruptcy process in Puerto Rico to continue to move forward. That process is going to take into account the devastation of the hurricane and ensure a higher cut in terms of the debt. In terms of the aid that comes from the United States that comes from the federal government, we want it to be robust in the form of grants that goes in terms of relief aid to Puerto Rico, the U.S. Virgin Islands. We don't want Puerto Rico or the U.S. Virgin Islands to have to get more debt in order to finance its reconstruction and recovery.

It's also absolutely imperative that the aid that comes in is sufficient to rebuild Puerto Rico and the U.S. Virgin Islands in ways that are going to be able to withstand what seem to be more powerful and more frequent storms in this moment of our history.

And the final piece that we and our partners in Puerto Rico are advocating and it actually impacts many of the Caribbean Islands that have been devastated by the storms – from Puerto Rico to the U.S. Virgin Islands to the countries of Antigua and Barbuda and Dominica – is that we really believe it's incumbent on Congress to pass greater laws around budget transparency, responsible lending and borrowing because these types of laws prevent financial crisis. These types of laws actually secure protections in the markets not only for the U.S. citizens living in Puerto Rico and U.S. Virgin Islands, but also in U.S. states and foreign countries because much of the world's debt is actually contracted through New York law.'"

Read more here.

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The Intercept Talks with Eric LeCompte about Puerto Rico

Eric LeCompte, Executive Director of Jubilee USA was recently featured in Common Dreams speaking on Puerto Rico. Read excerpt below and follow link to full article.

Puerto Rico is On Track for Historic Debt Forgiveness -- Unless Wall Street Gets its Way

By: Kate Aronoff

"'Now that the hurricanes have happened, and we understand the level of devastation that has taken place on the island, the bankruptcy process that’s in place under Swain now has to take into account this new reality,' LeCompte tells me. 'For Puerto Rico, that means a much bigger haircut than we were looking at beforehand.'

According to LeCompte, there are a couple of ways that forgiveness or cancellation could play out. Beyond outright forgiveness, one idea that’s been popular even among some bondholders is to repackage any remaining debt into a bond that would only be repaid once Puerto Rico crosses a certain threshold of GDP growth. A less likely scenario — though one LeCompte advised to look out forand Trump himself may have suggested — could see Congress pass a bail-out for bondholders, pouring federal funds into recouping their losses. Another recourse for creditors, he tells me, 'is trying to get Congress to amend or change PROMESA legislation to disempower the bankruptcy process.'"

Read more here.

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Eric LeCompte Cited in Common Dreams

Eric LeCompte, Executive Director of Jubilee USA was recently cited in Common Dreams speaking on Puerto Rico. Read excerpt below and follow link to full article.

White House: When Trump Says "Wipe Out" Puerto Rico's Debt That Doesn't Mean "Bail Them Out"

By: Andrea Germanos 

"Eric LeCompte, executive director of the religious development organization Jubilee USA, has also argued that the damage wrought by Hurricane Maria was worsened by the debt crisis.

'Puerto Rico can't recover with the debt it has,' he said. 'Puerto Rico was already undergoing a bankruptcy process that was going to substantially cut the island's debt. Now that bankruptcy process needs to access the hurricane damage and cancel even more of the debt,' he said."

Read more here.

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Puerto Rico and US Virgin Island Religious Leaders Issue Debt and Aid Statement As President Trump Visits Islands

As President Trump visits Puerto Rico and the US Virgin Islands, island religious leaders are calling for aid, debt relief and measures to end child poverty. The statement is issued by San Juan's Catholic Archbishop, Roberto González Nieves, St. Thomas' Catholic Bishop Herbert A. Bevard and Evangelical Bible Society Head Reverend Heriberto Martínez.

"Our islands can not pay debt until we've rebuilt and we see positive economic recovery. We need a debt payment moratorium, debts must be cancelled and reduced to sustainable payable levels," wrote González, Bevard, and Martínez in their statement. "When economies are already dealing with austerity policies and financial crisis, they are ill prepared to deal with natural disasters like Hurricanes Irma and Maria."

Before Hurricanes Irma and Maria hit Puerto Rico and the US Virgin Islands, both US territories were wrestling with financial crisis and high child poverty rates. Puerto Rico and the US Virgin Island religious leaders express that since the hurricanes struck, many civil institutions and communication systems collapsed. 

"Before the hurricanes hit, we were dealing with a severe debt crisis on the islands with troubling austerity policies. Now we are dealing with a serious humanitarian crises," said Jubilee USA Executive Director Eric LeCompte who works with the islands' religious leaders. "The islands need sufficient recovery aid and debt relief to rebuild."
Here is the full statement from Puerto Rico and US Virgin Island Religious leaders:

Puerto Rico and US Virgin Island Religious Leaders Appeal for Aid, Debt Relief and Ending Child Poverty 

Tuesday, October 3, 2017

"For I know the plans I have for you," declares the LORD, "plans to prosper you and not to harm you, plans to give you hope and a future.‎" -- Jeremiah 29:11

‎"And forgive us our debts, as we also have forgiven our debtors.‎" -- Matthew 6:12

In recent weeks, hurricanes and powerful storms ravaged our homes across the Caribbean to the shores of the United States. We pray, mourn and hope with all of the victims from Dominica to Florida. In particular, we remember the most vulnerable were not prepared to cope with the storms and have fewer resources to recover.

In Puerto Rico and the US Virgin Islands we are desperately trying to help our people survive amidst the most destructive natural disaster to visit our islands in a century. Bef‎ore the hurricanes struck our islands, we were wrestling with high child poverty rates and serious financial crises. On behalf of our people, we appeal to all decision makers:

  • In addition to hurricane relief, we need resources to permanently reduce the child poverty epidemic.
  • Aid must come in the form of grants, as opposed to loans that would further indebt our islands.
  • Relief monies must be sufficient to rebuild structures to withstand more powerful and more frequent storms.
  • US citizens living in Puerto Rico and the US Virgin Islands must be able to have the same access to federal health care and child benefit monies that US citizens receive in US states. 
  • Our islands cannot pay debt until we've rebuilt and we see positive economic recovery.
  • We need a debt payment moratorium; debts must be cancelled and reduced to sustainable payable levels.

When economies are already dealing with austerity policies and financial crisis, they are ill prepared to deal with natural disasters like Hurricanes Irma and Maria. We ask that decision makers institute greater budget transparency and standards for responsible lending and borrowing to prevent financial crisis in US states, US territories and foreign countries.

As we struggle to recover from these terrible storms, we join religious partners from around our world in calling for an economy that defends and lifts the vulnerable. Our loving God intends for us all to have enough and to live in harmony with one another and our planet.

In the hope endowed by our Creator,

 

Metropolitan Archbishop Roberto O. González Nieves, OFM of Catholic Archdiocese San Juan de Puerto Rico

 

  

Most Reverend Herbert A. Bevard, Bishop of St.Thomas in the Virgin Islands

  

Reverend Heriberto Martínez-Rivera, Secretary General of Puerto Rico’s Bible Society and Coordinator of the Ecumenical and Interfaith Coalition of Puerto Rico

Read Eric LeCompte's statement on the crisis

Read religious leaders' statement in Englishen español 

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