The International Monetary Fund (IMF) released its bi-annual report on the state of the global economy, predicting that global growth will continue steadily but slowly. The report also raised the alarm on policies it labeled as "protectionism." The IMF expresses concern about the roll back of transparency regulations leading to a return of riskier global investing.
"While the IMF reports that growth is slow and steady, it is clear that the IMF is concerned with the return of the kind of risky behavior that helped create our recent global financial crisis," 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. "The IMF is concerned with a shift in global politics."
The report also noted that curbing tax evasion and avoidance needs global or "multilateral" cooperation.
"We know that in order to curb tax avoidance and evasion, we need agreements that can cross the borders of countries," commented LeCompte on the taxation elements of the report.
The World Economic Outlook report noted that both low and middle income countries should be concerned about rising debt levels. The IMF views high debt as being a substantial risk in weak economies.
"It's good the IMF is pointing to concerns of sustainable debt levels in poor countries," stated LeCompte. "I'm concerned that higher debt levels and more risky market behavior is a recipe for another financial crisis."
Read International Monetary Fund's April 2017 World Economic Outlook report
Eric LeCompte, Executive Director of Jubilee USA was recently featured in Financial Express Bangledesh speaking on Puerto Rico. Read excerpt below and follow link to full article.
Call for Debt Cuts as Puerto Rico Heads for Bankruptcy
"'When the oversight board votes for bankruptcy proceedings, Puerto Rico can access a comprehensive process to deal with all of their debt,' noted the executive director of Jubilee USA, Eric LeCompte, who tracks the debt negotiations."
Read more here.
Within weeks, Puerto Rico will likely enter bankruptcy proceedings tailored by Congress specifically for the US territory. The island's government and creditors are engaged in final talks to try and resolve the dispute before a May 1 deadline. An oversight board created by Congress to deal with Puerto Rico's debt crisis is mediating the current round of debt talks. If no agreement is reached, the oversight board will likely vote for bankruptcy proceedings to begin.
"Whether the crisis is resolved through negotiated deals or a bankruptcy process, solutions must promote economic growth and significantly cut the debt to sustainable levels," said Archbishop Roberto González from the Catholic Archdiocese of San Juan de Puerto Rico. "The debt has human costs and how we resolve the crisis can either lift people out of poverty or trap them in a perpetual cycle of poverty."
The island wrestles with a nearly 60 percent child poverty rate. Religious leaders like González actively called on Congress to include child poverty reduction measures in debt crisis legislation passed last year.
"The most important stake holders in any debt crisis resolution are Puerto Rico's children," said Reverend Heriberto Martínez, the head of the Puerto Rico Bible Society. "We need to be sure we are investing in our children and our children don't inherit the debt."
In the summer of 2015, when the island's government announced the debt was no longer payable, religious leaders across Puerto Rico rallied to resolve the crisis. Working with US religious groups and the development organization Jubilee USA, the island's religious leaders proposed various solutions to aspects of the crisis. Now a comprehensive path to cut the debt appears in sight.
"When the oversight board votes for bankruptcy proceedings, Puerto Rico can access a comprehensive process to deal with all of their debt," noted the executive director of Jubilee USA, Eric LeCompte, who tracks the debt negotiations. LeCompte testified to Congress and the oversight board on the island's crisis. "Puerto Rico is lucky to have a process that can deal with 100% of the debt. Unfortunately it's too rare in the bankruptcy world to have comprehensive processes like this."
Puerto Rico’s electric utility company (PREPA) and bondholders reached an agreement to restructure $8.9 billion in debt, according to an announcement from the island's government. The deal still needs approval from a "control" board Congress created as part of debt crisis legislation passed last year.
"The test for any debt deal is whether or not the debt is brought back to sustainable levels," noted Eric LeCompte, who tracks the debt negotiations and leads Jubilee USA, a religious development organization. "It's hard to judge success until all of the debt is brought back to sustainable levels, not just some of it."
Puerto Rico's government says this will save $1.5 billion in debt servicing costs over five years and expects the average electric bill to be reduced by $90 annually.
"Puerto Rico's government is making progress but the entire debt needs to be looked at comprehensively," said LeCompte, who testified to Congress on Puerto Rico's debt plan. "Puerto Rico won't see recovery, let alone economic growth, until the whole debt is restructured."
Representative Lloyd Doggett (D-TX) and Senator Sheldon Whitehouse (D-RI) introduced versions of the Stop Tax Haven Abuse Act in the House and Senate. The legislation makes it more difficult for multinational corporations to avoid taxes by "offshoring." Doggett also introduced the Corporate Expatriates and Inverters Tax Fairness Act (Corporate EXIT Fairness Act). If passed, it would be more difficult for a corporation to shift its headquarters to a country that has a lower tax rate.
Eric LeCompte, Executive Director of Jubilee USA Network, a religious development organization, releases the following statement:
“Governments around the world need greater revenues to meet their budgets. Congress needs to pass legislation that closes loopholes.
"This legislation helps shine a spotlight on the problem of tax havens. It helps track where companies are paying or not paying taxes.
“Tax avoidance, evasion and corruption are too often thefts from the poor and we have a moral imperative to act.”
More than 11 million documents were leaked from a law firm based in Panama a year ago today. The "Panama Papers" implicate various global figures and officials in possible acts of fraud and corruption.
"The Panama Papers reveal a secret network of shell companies and firms that can hide when government officials steal from their people,” noted Eric LeCompte, Executive Director of the religious development group Jubilee USA. “Congress can shine a spotlight on these activities. Congress needs to act.”
Several members of Congress are expected to introduce legislation to help law enforcement track who actually owns anonymous shell companies. The House Financial Services Committee set up a special subcommittee on terrorist financing to address this issue.
"Congress can make it harder to use anonymous shell companies to launder money,” stated LeCompte. "Anonymous shell companies are part of why poor countries lose more money in tax evasion and corruption than they receive in aid.”
Read more about the Panama Papers
Eric LeCompte, Executive Director of Jubilee USA was recently featured in National Catholic Reporter speaking on Puerto Rico. Read excerpt below and follow link to full article.
Debt Crisis in Puerto Rico Comes to a Head
By: Michael Sean Winters
"'Conceivably, this could be one of the largest debt-relief initiatives in the history of fiscal crises if the board remains true to the goals it has set for itself,' Eric LeCompte, executive director of Jubilee USA, told me. LeCompte is in San Juan for the meeting and has played a leading role helping to guide religious leaders on the island as they fight to prevent austerity measures that would target the poor.
'The United States Conference of Catholic Bishops continues to show phenomenal leadership, not only on resolving the crisis in Puerto Rico, but on global debt issues, too,' said LeCompte. 'The church's consistent policy stance flows from sustained moral reflection on these issues of debt and development.'"
Read more here.
Puerto Rico's Financial Oversight and Management Board meets in San Juan to discuss economic growth proposals for the island. At its March meeting, the board accepted Governor Rosselló's fiscal plan for a balanced budget.
"There is no path for economic growth in Puerto Rico without a major debt restructuring," stated Eric LeCompte, who is attending the San Juan meetings. LeCompte is the head of the religious development group Jubilee USA and he testified to the oversight board during their November meeting. "The island needs to be very careful about further austerity programs as these programs can deter economic growth."
Last December, a bipartisan Congressional task force made economic growth recommendation for the island. Puerto Rico's Archbishop Roberto González and Bible Society head Reverend Heriberto Martínez sent a letter to Congress last week urging action on the healthcare and child tax benefit recommendations. Medicaid in Puerto Rico is currently funded under a block grant. When it runs out, the island is expected to only receive enough funding to pay for less than one-third of its Medicaid related expenses.
"Both Congress and the oversight board have roles to play in resolving Puerto Rico's financial crisis," stated LeCompte. "Any decisions that are made in the coming months must carefully consider how vulnerable communities will be impacted."
Read the letter Archbishop González and Reverend Martínez sent to Congress
Read the Congressional Task Force on Economic Growth in Puerto Rico's recommendations
The House Rules Committee rejected an amendment that would allocate Medicaid funding to Puerto Rico at an equal level to US states. Medicaid in Puerto Rico is currently funded under a 'block grant' that will run out this year. When it runs out, the island will receive a set amount of funding that is expected to cover less than one-third of Puerto Rico's Medicaid-related expenses. Medicaid reform was a key element of the recommendations made last year by the bipartisan Congressional Task Force on Economic Growth in Puerto Rico. If the Rules Committee had accepted the amendment, the full House of Representatives would have voted on it during the American Health Care Act debate.
"As Puerto Rico restructures its debt and seeks to prevent austerity, the island needs equal access to healthcare funding," stated Eric LeCompte, who testified to Congress on these issues. LeCompte is the executive director of the religious development coalition Jubilee USA. "Although the amendment failed, it's now clear there is an eventual path to secure this funding for Puerto Rico."
The amendment was submitted by Puerto Rico's Representative Jenniffer González-Colón and Representative Amata Coleman Radewagen of American Samoa. Puerto Rico's Archbishop Roberto González Nieves and Bible Society head Reverend Heriberto Martínez-Rivera sent a letter to Congressional leadership yesterday urging them to act on task force recommendations on Medicaid, Medicare and the Child Tax Credit.
"You moved Congress to act for Puerto Rico," Archbishop González and Reverend Martínez write in a letter sent to Republican and Democratic leadership in the House of Representatives and the Senate. "As our island prepares to restructure its debt, we need you to act again."
Read the text of the amendment
Read the religious leaders' letter to Congressional leadership
Read the Congressional Task Force on Economic Growth in Puerto Rico's recommendations
Jubilee USA was recently featured in Agenzia Fides. Read excerpt below and follow link to full article.
Religious Leaders Ask the United States to Prevent Financial Crises in the Country
"Religious leaders in their letter, sent to Fides, recall that they have been working to solve the crisis of Puerto Rico since 2015... and have Jubilee USA and national religious organizations like the Catholic Bishops Conference of the United States and the United Church of Christ as partners"
Read more here.