Development Group Says Debt Relief Can Provide Quick-Recovery Aid to Dominica and Puerto Rico

The United States Conference of Catholic Bishops (USCCB) joins other religious and development groups in their call for ‎debt relief for hurricane-battered Caribbean islands. In a letter to the head of the International Monetary Fund (IMF), the USCCB wrote, "Natural disasters in countries with extremely at-risk economies, like Antigua and Barbuda and others in the Caribbean, can wreak catastrophic and paralyzing impacts on their prospects for further development—including their ability to service their debt responsibly."‎ The letter echoed calls from Caribbean Catholic Bishops to temporarily stop debt payments so that troubled islands can recover.

"No island should be making debt payments until they can recover, whether we are talking about US territories like Puerto Rico or ‎countries like Dominica," noted Eric LeCompte, Executive Director of the religious development group Jubilee USA.

Cardinal Daniel DiNardo, President of the USCCB and Bishop Oscar Cantú, Chairman of the Committee on International Justice and Peace for USCCB, sent the letter to the IMF just after Bishop Gabriel Malzaire, Bishop of Roseau and President of the Antilles Episcopal Conference did the same. Malzaire sent the letter after Hurricane Irma tore through the Caribbean, but before Hurricane Marie struck his home island of Dominica.

"Sadly, since multiple hurricanes have ravaged the Caribbean, there are many islands in need of immediate aid. Delaying debt payments is one of the fastest ways to move money into recovery and reconstruction efforts," noted LeCompte who serves on UN expert working group‎s that focus on financial crisis.

Every street and every town in Dominica, home to roughly 73,000 people, was affected according to the island's Prime Minister, Roosevelt Skerrit who lost his own home. Dominica's government says the island is currently without running water and electricity. Power outages are occurring across hurricane-struck islands. The US Virgin Islands and Puerto Rico are struggling to regain power. ‎Puerto Rico's power company stated that it could take 4 to 6 months to get power fully back in the US territory.

"The US Virgin Islands and Puerto Rico need to ‎focus on the emergency needs of their people, not debt payments," said LeCompte. "Congress, creditors and the territory governments all have a responsibility to free the US citizens on the islands of debt as they recover from these hurricanes."

Read the USCCB's Letter to the IMF

Read Jubilee USA's Letter to the IMF

Read Bishop Gabriel Malzaire's Letter to the IMF

Read Jubilee USA's Petition for Hurricanes Irma and Maria

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Eric LeCompte Speaks at UN on Financing Development and Addressing Poverty in Wake of Hurricane Maria

As the United Nations General Assembly debate began earlier this week, Eric LeCompte spoke at a high-level event on improving global debt, tax, trade and transparency policies to address poverty. The event, focused on financing development, was organized by the government of France and the International Leading Group on Social and Solidarity Economy. Read the speech below or the attachment here.  

72nd United Nations General Assembly
‘Focusing on People: Striving for Peace and a Decent Life for All on a Sustainable Planet’

UN High Level Event:
INCLUSIVE, PARTICIPATORY, INNOVATIVE: FINANCING FOR SOCIAL AND
SOLIDARITY ECONOMY AT THE CORE OF THE SDGS
United Nations, New York

“Promoting Debt, Tax, Trade and Transparency Policies that
Finance Development, Ensure Natural Disaster Relief, Build Peace
and Protect our Planet”

Eric LeCompte, Executive Director of Jubilee USA
September 19, 2017
Remarks As Prepared for Delivery 

I want to extend my gratitude to all of the organizers, the Government of France and the International Leading Group on Social and Solidarity Economy. It is an honor to be with you today

My organization, Jubilee USA is part of the broader community of organizations that coalesced around the Financing for Development process that promoted a global agreement in Addis Ababa in 2015. The Financing for Development community includes women’s organizations, religious and political groups as well as global development organizations. During the Financing for Development process, our community asserted that we can meet the Sustainable Development Goals, ensure human needs are met and protect our planet by improving global debt, tax, trade and transparency policies. The International Monetary Fund notes that several of these issues are the basis of global inequality.

Jubilee USA moves forward global policies that address the root causes of poverty and inequality. In the United States, Jubilee USA’s founders and members include the U.S. Conference of Catholic Bishops, American Jewish World Service, Islamic Relief, the United Church of Christ and most mainline national Christian Churches.

My remarks are focused today on utilizing existing and potential revenue streams that can finance development, relieve human suffering and protect our environment. There is no way to discuss these issues, without acknowledging the great human suffering caused by recent natural disasters from India to the shores of the United States.

We can’t reach our partners on the island of Dominica and all initial reports note that the island is devastated by Hurricane Maria. Bishop Gabriel Malzaire who leads the Catholic Church on the island and is the President of the Caribbean Catholic Antilles Episcopal Conference, sent a letter to the International Monetary Fund just days ago. His letter on behalf of Caribbean Catholics, called on the IMF and other creditors to temporarily delay debt payments for islands like Antigua and Barbuda recently ravaged by Hurricane Irma. Sadly, his letter is now relevant for his own island nation of Dominica. It’s imperative that the IMF, World Bank and other creditors delay payments or grant a debt payment moratorium to provide financing and relief in the face of human tragedy.

When disaster strikes, when famine spreads and when economic crisis impacts the poor, we have immediate tools at our disposal. Too often simple, common sense financing to address crisis are not used. Whether it is a hurricane or famine, delaying debt payments and debt relief can provide immediate aid, when aid is needed most.

More broadly we currently live in a global financial system where 80 people own as much, have as much wealth, as more than half of the entire global population. We live in a global financial system where we know one out of five people in the world lives on less than a dollar a day.

In the 1990’s we began our work to address inequality and finance development by addressing the global debt crisis. Together we won two great debt relief and financing initiatives to address global poverty and promote children’s education and health: The Heavily Indebted Poor Country Initiative (HIPC) and the Multilateral Debt Relief Initiative (MDRI). Because of these initiatives, over $115 billion was won in debt relief to benefit some of the world’s poorest countries. Because of that debt relief we know in sub-Saharan Africa that more than 52 million kids went to school who never would have seen the inside of a classroom. We know that school fees were cancelled, hospitals were opened, because of this historic initiative, because of this relief and the international accountability laws that we won, all of this money had to go into building social infrastructure.

Unfortunately, as successful and important as HIPC and MDRI were, we now realize that those solutions were not enough to entirely grasp the problem. Out of the 38 very poor countries that benefitted from the HIPC and MDRI initiatives, 31 again face debt distress, financial crisis or unsustainable debts. 31 out of 38. 3 But not only has that crisis impacted and returned to some of the world’s poorest countries, we have also seen it impacting middle-income and even developed countries. From 2009 to 2014, debt service in Africa nearly doubled. While at the same time in the same countries in Africa, we saw spending on health care decline. As we talk about Dominica, we are currently seeing a tragic situation on Small Island Developing States or SIDS across the world, many of these islands with poverty rates that range from 30% to 50%. These so called Middle-Income Small Islands are now facing crisis, just as so-called middle-income countries in Africa are facing similar crises.

These new crises have become more complicated. Debt itself has changed and the instruments of debt have changed. Where debt was relatively quarantined to a rather small group of lending facilities, international financial institutions, governments and bonds, now we see more complicated instruments.

With this new reality and this lack of debt sustainability there is a small group of exploitative hedge funds that are trying to benefit from countries wrestling with financial crisis. These so called “vulture funds” are responsible for predatory behavior in Detroit, in Greece, in Argentina and were recently stopped in Puerto Rico by an act of the US Congress. So called “vulture funds” buy debt for pennies on the dollar and then sue in full using aggressive litigation tactics to collect the full amount. These types of funds have successfully collected aid monies that were intended to provide development financing in the developing world.

We and the religious organizations that we represent, believe public budget transparency and responsible lending and borrowing are essential. Beyond preventing predatory financial behavior, public budget transparency and responsible lending and borrowing can provide financing of billions of dollars annually for the developing world. These conservative stewardship policies cost nothing and can raise billions in the developing world. It is why we support improved debt restructuring at the International Monetary Fund. It is why we supported the United Nations General Assembly process to create a legal global bankruptcy framework. Similar to Chapter 9 or Chapter 11 in the United States, global bankruptcy can provide the same kind of stability we rely on in domestic economies into the global financial system. Pope Francis supports such a system to provide financing to end poverty. Adam Smith the father of modern economics believed global bankruptcy is critical for global stability.

Beyond debt, addressing trade, transparency and tax issues can also provide the needed financing to meet human needs. There is no way that we can separate these 4 issues when we discuss financing human development. The same predatory hedge funds that took Argentina to court in New York, that benefited off of crisis in Detroit, small island states and Greece, are also using trade resolution mechanisms such as the Inter-Settlement Dispute Mechanisms, to try and collect monies that countries need to meet the needs of their people. Most recently we see this in Peru, where old military debt that had propped up the dictatorship was bought for pennies on the dollar and is being sued for in full.

More concerning is that many trade negotiations make it difficult for vulnerable populations to get financing and access for life saving medicines. We need trade policies that lift and protect human beings. We need trade policies that ensure proper financing to meet the needs of vulnerable populations.

We also acknowledge the growing issues around tax evasion, illicit financial flows, anonymous shell companies and corporate tax avoidance. As the President Mbeki report noted, one of the greatest diversions of financing for human needs is because of tax evasion and corruption. Last year the UN Conference on Trade and Development (UNCTAD) released a study on five countries that showed how much money they were losing because of “trade mis-invoicing.” Currently we believe that 80% of all illicit financial flows are because of trade mis-invoicing at borders and port authorities. This is actually a relatively easy problem to tackle, and this particular problem if tackled could secure more than $1 trillion a year to provide financing in the developing world. Addressing corruption, tax evasion, corporate tax avoidance, anonymous shell companies and related issues must be addressed. The Financing for Development Community of development groups continues to call for vehicles like a global tax body to help settle these issues and raise financing for the development world.

In closing, by addressing structural economic issues, we can finance development, human needs and address economic crisis. In an era where aid streams are being debated, it’s essential that we harness revenue streams by promoting better global policies on debt, tax, transparency and trade.

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Eric LeCompte Interviewed on Jubilee's Call for Debt Relief to Hurricane-Struck Islands

Jubilee USA was recently featured in Truthout speaking on the need for debt relief in the Caribbean in wake of Hurricanes Irma and Maria. Read excerpt below and follow link to full article.

Damaged by Hurricanes and "Vulture" Capitalism, Caribbean Islands Plead for Debt Relief

By: Mike Ludwig

"'At this point, Antigua and Barbuda as one country and Dominica as another could both qualify for a temporary moratorium on international debt payments to the IMF,' LeCompte said in an interview.

Like other islands in the Caribbean, Dominica is saddled by significant international debt. LeCompte said the country's debt level has been unsustainable since at least 2010, and Hurricane Maria could lead to a 'full-blown debt crisis."

Read more here.

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Hurricane Maria Slams Dominica and Heads Towards Puerto Rico

Caribbean islands recovering from Hurricane Irma, now confront Hurricane Maria. According to initial reports, Hurricane Maria leveled parts of the island of Dominica. As of Tuesday morning, the Category 5 storm heads towards Puerto Rico and the US Virgin Islands. At a high-level event at the United Nations General Assembly, Jubilee USA's Executive Director Eric LeCompte called for a debt payment delay for hurricane-struck islands.

"A quick way to get rebuilding aid for islands affected by hurricanes is to temporarily stop debt payments," said LeCompte, Jubilee USA's Executive Director who serves on United Nation expert groups that focus on debt. "If the International Monetary Fund delays debt payments, it would immediately free up millions of dollars for islands trying to recover."

Last week, the Catholic Bishop of Dominica sent a letter to the International Monetary Fund (IMF) asking for debt relief for islands recovering from disasters. As president of a conference of Caribbean Catholic Bishops, Gabriel Malzaire had called for relief for other Caribbean islands, like Antigua and Barbuda that were hit hard by Hurricane Irma. The Bishop's letter is now relevant for Dominica as it seeks funds to recover.

"Islands like Dominica and Antigua and Barbuda need immediate financing," continued LeCompte. "In addition to delaying debt payments, islands need aid in the form of grants instead of loans."

As the UN General Assembly debate begins, Eric LeCompte spoke at a high-level side event on financing development. LeCompte spoke about improving global debt, tax, trade and transparency policies to address poverty. The event was organized by the government of France and the International Leading Group on Social and Solidarity Economy.

Read Eric LeCompte's Speech at the UN

Read Bishop Gabriel Malzaire's Letter to the IMF

Read Jubilee USA's Petition for Hurricanes Irma and Maria

See the Program for the High-Level UN Event

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National Catholic Reporter Talks with Eric LeCompte about Tax and Transparency

Eric LeCompte, Executive Director of Jubilee USA was recently featured in National Catholic Reporter speaking on tax and transparency. Read excerpt below and follow link to full article.

Republican Aim at Earned Income Tax Credit Punishes People Who are Poor

By: Staff

"'We believe that financial transparency is essential for protecting poor and vulnerable communities across the United States and around our world,' Eric LeCompte, executive director of Jubilee USA Network, told me.‎ 'We worked on section 1504 of Dodd-Frank because it prevents oil and coal companies from bribing foreign governments. It lets us know if these companies are paying taxes and how communities and workers are compensated. Currently because of tax evasion and corruption, the developing world loses nearly a trillion dollars a year. This Jubilee amendment passed Congress with strong bipartisan support. Unfortunately, the House repealed 1504 and other domestic financial protections for vulnerable U.S. communities when they passed the Financial Choice Act in June. While we've prevented this act from moving forward in the Senate for now, we need to be vigilant. At Jubilee USA we are concerned that financial protections for vulnerable people from California to Zambia are under threat. We believe there needs to be greater financial protections for vulnerable people, not less. We need to ensure that those affected by economic decisions are making the decision that impact their communities and lives.'"

Read more here.

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Caribbean Bishops and Development Groups Urge Debt Relief for Irma-Struck Islands

On behalf of Caribbean Catholic Bishops, Bishop Gabriel Malzaire called for islands dealing with Hurricane Irma to receive debt relief. As president of the Antilles Episcopal Conference, Malzaire joins US, European and Caribbean development groups that are calling for debt payments to be delayed until affected islands can rebuild. 

"The utter destruction caused by the passage of Hurricane Irma across the Northern Leeward Islands has not only shocked the people of our region by its severity but has left all of us with a much deeper awareness of our vulnerability to natural disasters and with a fear of threats from other approaching weather systems," wrote Malzaire in a letter to Christine Lagarde, head of the International Monetary Fund. The Catholic Bishop continued his plea for a delay in debt payments until countries like Antigua and Barbuda can recover. "The sad reality is that the ones who are affected most, the poor, cannot be held responsible for this reality," continued the Catholic Bishop in his urgent request for a delay of debt payments.
 
Hurricane Irma tore through the Caribbean devastating a host of islands including Antigua and Barbuda, St. Martin and the US and British Virgin Islands. On September 7th, Jubilee USA launched a petition and sent a letter to the IMF requesting a delay in debt payments or a debt moratorium for islands so they can rebuild. Calls for a debt moratorium were also sent from the Jubilee Caribbean Network, Jubilee Germany, the United Kingdom's Jubilee Debt Campaign and the European Network on Debt and Development.
 
"When a natural disaster strikes, delaying debt payments is a quick way to get funding for rebuilding," said Eric LeCompte who is the Executive Director of the religious development group, Jubilee USA. LeCompte serves on United Nation expert groups that focus on debt. "The International Monetary Fund and other creditors can delay debt payments and ensure faster recovery for a country like Antigua and Barbuda."
 
Antigua and Barbuda's Prime Minister estimated about 150 million dollars for reconstruction efforts on the islands. As the hurricane passed last week, the disaster-struck island had a 3 million dollar debt payment to the IMF due. 
 
Read Jubilee USA's petition on debt relief for Hurricane Irma.
 
Read the full letter from Bishop Malzaire and the Antilles Episcopal Conference.
 
Read Jubilee USA's letter to the IMF.
 
Read the letter from European debt and development groups to the IMF.
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Jubilee USA writes the IMF, Sign the Petition

On September 7th, Jubilee USA sent a letter to the head of the IMF urging a moratorium on debt payments until Irma-struck islands can recover. The Antilles Episcopal Conference, part of Jubilee Caribbean, also issued a letter to the IMF.

Please add your voice and sign our petition to the IMF to suspend debt payments for countries devastated by Irma.

See Jubilee USA's letter linked here or pasted below.

September 7, 2017

Dear Managing Director Lagarde,

We are grateful for the IMF’s desire to aid those countries impacted by Hurricane Irma. We also appreciate your continued leadership with the IMF’s emphasis on gender equality and addressing global inequality.

On behalf of Jubilee USA’s nearly 700 national and local faith institutions, we invite the IMF to implement an immediate moratorium on debt payments for countries severely impacted by the Category 5 storm until they have rebuilt and recovered. For example, the nation of Antigua and Barbuda has almost $3 million in debt payments due to the Fund today and a debt payment moratorium could immediately be put into rebuilding Barbuda where almost the entire population is homeless.

We would also encourage the use of grants, as opposed to loans, for islands recovering from the crisis.

We and our membership continue to hold you and all who work at the IMF in our prayers as you address global poverty and inequality.

Respectfully,

                 
Beatrice Parwatikar                                  Reverend Stacy Martin
Co-chair                                                           Co-Chair

                         
Reverend Aniedi Okure                          Reverend Steve Herder
Treasurer                                                         Secretary

Eric LeCompte
Executive Director
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Public Finance International Highlights Jubilee USA Letter to IMF‎

Public Finance International highlights Jubilee USA's letter to the IMF regarding the island nations impacted by Hurricane Irma. Read excerpt below and follow link to full article.

Caribbean Island Debt ‘Should Be Suspended’ for Irma Recovery

By: Simone Rensch

"...Jubilee USA Network has sent letters to the IMF, World Bank, Congress and the White House to suspend debt payments to islands, such as Antigua and Barbuda, so they can use the money to recover.

'The island of Barbuda was hit hard and 1,400 people are homeless,' Jubilee USA Network executive director Eric LeCompte said a statement published last week.

'The country of Antigua and Barbuda and other severely impacted islands should stop paying debt until they rebuild and recover.'"

Read more here.

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Caribbean 360 Features Jubilee USA's Hurricane Irma IMF Campaign

Eric LeCompte, Executive Director of Jubilee USA was recently featured in Caribbean 360 and Citizen's Report speaking on Hurricane Irma. Read excerpt below and follow link to full article.

IMF Debt Relief For Hurricane-Hit Barbuda Might Not Happen

By: Staff

"Barbuda, which was ravaged by Hurricane Irma a week ago, currently owes the IMF an estimated $3 million debt. Jubilee USA, an interfaith group, has written to the Fund’s Managing Director Christine Lagarde requesting that payment be put on hold until the island can recover.

'On behalf of Jubilee USA’s nearly 700 national and local faith institutions, we invite the IMF to implemented an immediate moratorium on debt repayments for countries severely impacted by the Category 5 storm until they have rebuilt and recovered,' President Eric LeCompte wrote."

Read more here.

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The Independent Cites Eric LeCompte on Debt Relief for Irma Affected Islands‎

Eric LeCompte, Executive Director of Jubilee USA, was recently cited in The Independent speaking on Hurricane Irma. Read excerpt below and follow link to full article.

Hurricane Irma: IMF is Resisting a Moratorium on Barbuda's Sovereign Debt Repayments

By: Ben Chu

"In a letter to the IMF managing director Christine Lagarde on 7 September the Jubilee USA network wrote: 'We invite the IMF to implement an immediate moratorium on debt payments for countries severely impacted by the Category 5 storm until they have rebuilt and recovered.' 

'For example, the nation of Antigua and Barbuda has almost $3m in debt payments due to the Fund today and a debt payment moratorium could immediately be put into rebuilding Barbuda where almost the entire population is homeless.'" 

Read more here.

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