Global Renewal: Debt Relief and Financial Investments Towards a Sustainable Future

Global Renewal: Debt Relief and Financial Investments Towards a Sustainable Future

What: IMF/World Bank Spring Meetings Panel

Debt crises and rising debt levels pose challenges to global growth and sustainable economies. Market fluctuations, commodity issues and natural disasters press countries to borrow. Countries across Africa and Caribbean islands like Puerto Rico are struggling with unsustainable debt. We will discuss solutions for economies faced with debt crisis.

WhoMark Flanagan, IMF Debt Policy Division; Reverend Heriberto Martinez, Puerto Rico Bible Society; Bodo Ellmers, EURODAD; Tirivangani Mutazu, AFRODAD and Eric LeCompte, Jubilee USA Network (moderator)

Sponsors: Jubilee USA Network and AFRODAD

When: April 20, 2018
2:00 - 3:30 pm
Where: IMF/World Bank Spring Meetings
IMF HQ2
Room 03B - 838B

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Financial Crisis 10 Years On. Has the Response to the Last Crisis Laid the Foundations for the Next?

Financial Crisis 10 Years On. Has the Response to the Last Crisis Laid the Foundations for the Next?

What: IMF/World Bank Spring Meetings Panel

Since 2008, IFIs, the G20, governments, and central banks have embarked on a reform agenda that was supposed to fix the old crises and prevent the next. Measures ranged from bank bailouts and quantitative easing to partial financial sector reform. While the impact of the old crisis is still being felt, there are already signs of the next. At the same time, the pace of financialization of the global economy keeps increasing, under the added pressure of wide-scale promotion of large  infrastructure investments and related public-private partnerships.

WhoTamim Bayoumi, IMF Strategy, Policy and Review; Maggie Murphy, Transparency International; 
Manual Montes, Finance and Development, South Centre; Eric LeCompte, Jubilee USA Network
and Bodo Ellmers, EURODAD (moderator)

Sponsors: Jubilee USA Network, Eurodad, Center of Concern, Brot Fur die Welt,
Financial Transparency Coalition, and the CSO Financing for Development Group

When: April 19, 2018
2:00 - 3:30 pm
Where: IMF/World Bank Spring Meetings
IMF HQ2
Room 03B - 838B

To attend these events, members of the press must be credentialed for the IMF/WB Spring Meetings. Register for credentials here.
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IMF World Economic Outlook Report Raises Concerns for Long-Term Growth

The International Monetary Fund releases its World Economic Outlook (WEO) Report, forecasting global growth in the short-term and raising concerns on possible economic downturns beyond the next few quarters. The Fund issues the report ahead of the Spring IMF and World Bank meetings where world leaders, finance ministers and nongovernmental organizations gather this weekend on the 10-year anniversary of the global financial crisis.

"In the near term the IMF sees continued economic growth, but it's warning that continued growth is short lived," noted Jubilee USA Executive Director Eric LeCompte, who has tracked IMF meetings for nearly 10 years. "The IMF is warning that rising debt levels are a growing risk around the world."

Recently the Fund released analysis focusing on specific concerns with rising, unsustainable debt levels in Africa. While the Fund's economic outlook report predicts short-term global growth of 3.9%, it highlights debt levels, trade policies, decreased labor participation and aging populations as risks to long-term growth.

"The IMF is asserting that now is the time for countries to get their houses in order to prevent and be prepared for future financial crises," noted LeCompte who serves on United Nation expert groups that focus on economic issues. "Overall these economic forecasts allude to growing inequality and increasing divides between the rich and the poor."

Read the April 2018 World Economic Outlook

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National Catholic Reporter Talks with Eric LeCompte on Puerto Rico Fiscal Plan

Eric LeCompte, Executive Director of Jubilee USA was recently featured in the National Catholic Reporter speaking on Puerto Rico's fiscal future. Read excerpt below and follow link to full article.

Puerto Rico needs bold, visionary effort, especially in energy

By: Michael Sean Waters

Beyond the challenges inflicted by the hurricane, the fiscal crisis has only worsened. "Early last year, Puerto Rico's oversight board and governor authorized a fiscal plan with high debt payment cuts and austerity measures," Eric LeCompte, executive director of JubileeUSA told NCR. JubileeUSA has been very active monitoring the debt crisis negotiations. "When the hurricanes hit, the oversight board eliminated the previous plan to make room for a new plan that took into account the storm devastation. As we were working on a new fiscal plan early this year, there were some serious improvements, including a complete stop on debt payments." For a variety of reasons, Puerto Rico’s public debt soared in the past 10 years as economic activity on the island never rebounded from the 2008 recession and the phasing out of special tax breaks for manufacturing on the island in 2006. 

"Unfortunately, the governor's most recent plan looks largely similar to the plan before the hurricanes and doesn't stop debt payments or take into account the magnitude of hurricane damage," says LeCompte. "In the next few weeks, the oversight board will likely certify a new fiscal plan and we need to be sure that a new plan stops all debt payments for at least five years, supports a high total principle cut of the debt, lessens austerity and has specific measures to only pay debt in the future if we see sustained economic growth and child poverty reduction." 

LeCompte is also worried that Congress may not authorize the reconstruction money the island needs. "Puerto Rico can't succeed if Congress does not authorize the remaining recovery funds the island needs," he told me. "We continue to work with congressional leadership to get the remaining installments of relief aid over the coming months." 

Read more here.

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ValueWalk Features Eric LeCompte Discussing Puerto Rico's Debt

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

Puerto Rican Debt Negotiations At Critical Crossroads

By: Mark Melin

Eric LeCompte, Executive Director of Jubilee USA, a debt relief advocacy group, told ValueWalk negotiations have become “a Kabuki dance over what should and should not be in the plan.”

The fiscal plan will set the framework for a final solution, which could occur through two routes.

One solution can occur through direct negotiations between all interested parties, including creditors. The other is for Judge Laura Taylor Swain, who was appointed to supervise the bankruptcy process, to issue a ruling on the final settlement. The negotiation process includes input from creditors while Judge Swain, who has shown a propensity to side with those advocating debt relief, is not required to negotiate with creditors.

Pushing for a solution comes as US lawmakers authorized Promesa in June 2016 to create a board and iron out a turnaround plan which, to date, has not materialized.

LeCompte, who negotiated with Congress to set up the current process and advocates against austerity measures until hurricane relief is complete, would like to see a long-term solution. He advocates creating a new type of bond that increases its payout to investors as the economy picks up steam but automatically suspends debt payments if or when another natural disaster occurs.

If a permanent solution is created that gives investors an extra payout during times of strong economic growth it would set a precedent. Currently being discussed are solutions where a Puerto Rican bond might pay 6% or 7% during “normalized” conditions. If the economy improves beyond clear benchmarks investors might receive 10%, LeCompte said. But if a natural disaster were to occur, the bond payments would be halted until the humanitarian crisis subsides.

At issue in negotiations are government workers taking a 10% cut in their pensions while creditors might take an 80% cut in their payments until the current hurricane relief program is complete.

“If we don’t get it right, if Puerto Rico doesn’t get back to economic growth, no one wins,” LeCompte said. “Consumers need to consume in order for an economy to grow and there can only be promise if good economic policies are in place.”

Read more here.



 

 

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Before the next hurricanes come...

Friends -

Struggling with high poverty rates, islands across the Caribbean are still recovering from a brutal hurricane season.

The next hurricane season begins in two months and we really need your help.

Because of our efforts together, we've seen progress on debt relief and aid for Dominica and Puerto Rico, for Barbuda and the US Virgin Islands. But we have much more we need to do before the next hurricane season starts in two months. Please make a tax-deductible donation to Jubilee USA to support our strategic efforts that win economic policies that will protect vulnerable communities before the next disaster strikes.

Since the hurricanes hit last fall, together we moved the White House, Congress, G20, United Nations and International Monetary Fund to follow our call and take action. Now new policies we campaigned on for years are finally being debated for debt relief and austerity prevention after disasters hit worldwide.

Our partners across the Caribbean are calling for debt, tax, transparency and trade policies that protect the poor in the face of crisis. We have a brief window to move Congress, the IMF and United Nations.

Please join me and make a donation to Jubilee USA today. Whether you can donate $5, $25 or $500, your support is needed now to win critical debt, tax and transparency campaigns—before the next hurricane hits.

We are so grateful for your partnership.

To our many friends and partners celebrating the hope and promise of Passover and Easter, we at Jubilee USA celebrate with you.

Happy Passover, Happy Easter!

 

Eric_Signature.transparent.jpg

Eric LeCompte
Executive Director
Jubilee USA Network
eric@jubileeusa.org

Twitter: @Eric_LeCompte
www.jubileeusa.org/support-us



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Jubilee USA Network
212 East Capitol St NE - Washington, DC 20003
(202) 783-3566 - coord@jubileeusa.org


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Puerto Rico Governor and Oversight Board Spar on Fiscal Plan

The certification of a plan to get Puerto Rico out of debt and back to economic growth was delayed again this week. Puerto Rico's federally appointed oversight board told the island Governor Ricardo Rosselló to submit a revised plan next week with an aim towards board certification by April 20th.

"Various fiscal plan versions fail to take into account the continued suffering in Puerto Rico after hurricanes Maria and Irma," stated Jubilee USA Executive Director Eric LeCompte. "Before the hurricanes hit, nearly sixty percent of kids on the island lived in poverty. I'm worried that a final plan could propose paying debts instead of tackling hurricane recovery, limiting austerity and reducing child poverty."

LeCompte testified to the oversight board about solutions to the island's financial crisis before the board certified the original plan in 2017. After the hurricanes hit, the board revoked the previous plan to make room for a new fiscal plan that took into account the impact of the hurricanes. Sparring over benefit cuts and halts on debt payments, the Governor and oversight board have gone back and forth on new fiscal plan versions since January.

"Puerto Rico should not make a single debt payment until it sees positive and sustained economic growth," said LeCompte. "Puerto Rico can not afford to pay debt at the expense of its children."

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Six Months After Maria, Puerto Rico and US Virgin Islands Wait for Relief

Six months after Hurricane Maria, blue tarps still cover homes and buildings across Puerto Rico and the US Virgin Islands. The number of people who lack power can be counted in the hundreds of thousands. 

"The suffering continues on the islands and our fellow citizens need help," said Eric LeCompte, Executive Director of the religious development group Jubilee USA. "It's important that Congress voted for relief aid for the islands. Now we need Congress to increase the aid so that the islands can rebuild to withstand the next storms."

Efforts made by the interfaith group, Jubilee USA Network, moved Congress to pass more than $11 billion in recovery funds and secure "better building" provisions to strengthen infrastructure on the islands. Moody's rating agency estimates that Puerto Rico needs more than $90 billion in funds. In Puerto Rico, the majority of applications for FEMA claims are denied.

"Relief monies need to be expedited for Puerto Rico and the US Virgin Islands," stated LeCompte. "The situation is desperate and too many hurricane victims are still waiting for relief."
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In Depth News Talks to Eric LeCompte about Caribbean Disater Relief

Eric LeCompte, Executive Director of Jubilee USA was recently featured in In Depth News speaking on Caribbean disaster relief. Read excerpt below and follow link to full article.

Caribbean Faith Leaders Call for Debt Relief and More

By: J C Suresh

"Across the Caribbean, we still see immense suffering from the hurricanes that landed last year," said Jubilee USA Executive Director Eric LeCompte who endorsed the statement. "Islands that are struggling to recover after natural disasters and meet basic needs of their people should not be making debt payments."

Read more here.

 

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Economic Impacts on Poor are Central Themes of Francis Five-Year Papacy

Washington DC - This week marks the five-year anniversary of the election of Pope Francis as the leader of the Roman Catholic Church.

Eric LeCompte is the Executive Director of the religious development group Jubilee USA and he advises the Vatican and Catholic Church on economic and development issues. LeCompte releases the following statement celebrating five years of Pope Francis:

"As we celebrate the five-year anniversary of the election of Pope Francis, we celebrate how powerfully he expresses the plight of the poor.

"The Catholic Church has always called for our global economy to serve and protect the poor. As Pope, Francis has also spoken about how particular aspects of the financial system need to change to protect the poor. Francis endorsed a global bankruptcy process to stop financial crisis and prevent predatory hedge funds from taking advantage of poor countries. He raises concern about the impacts of tax havens, tax evasion, trade policies and corruption on vulnerable communities.

"Pope Francis speaks so specifically on the impacts of economic issues because he and his people in Argentina really felt the impacts. He led his people, when he was head of the Argentina Church, as the country wrestled with austerity policies and a debt crisis fueled by corruption and predatory hedge funds taking advantage of that crisis."

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