Eric LeCompte's Thoughts in ValueWalk on Next Hurricane Season

Eric LeCompte, executive director of Jubilee USA, was quoted in ValueWalk's article today "As Atlantic Region Braces For Another Damaging Hurricane Season, Concern Grows: Islands are unprepared as forecasters predict three hurricanes again" ahead of the next hurricane season.  The article highlights how meteorologists are predicting another three "major" hurricanes this season.  LeCompte stresses the need for disaster and debt relief mechanisms and payment moratoriums ahead of these storms.
To read the full article, click here.

As Atlantic Region Braces For Another Damaging Hurricane Season, Concern Grows: Islands are unprepared as forecasters predict three hurricanes again

Mark Melin   
May 17, 2018

Efforts to reduce the country’s debt load in the wake of the hurricane appear to be moving backward, according to UN sovereign debt consultant and Jubilee USA Executive Director Eric LeCompte. He points out that the initial offer to pay 25 cents on the dollar to investors has now moved 40 cents as serious consideration is being given to so-called G.D.P.-linked bonds tied to the success or failure of the nation’s economic engine.

While efforts to prepare Puerto Rico, a US territory, require a response from the wealthiest nation on earth, smaller independent islands are especially exposed if a hurricane ravages the region again.

Moves are underway at the United Nations that could provide debt relief to independent islands such as Grenada, St Lucia, and Antigua if they are again stricken.

Recent public and private conversations have taken place at the United Nations Financing for Development Forum (FfDForum) in New York. The group is currently considering provisions for automatic debt relief and payment moratoriums when a disaster hits, as well as mandated debt restructuring. After the FfDForum focused on the measure, LeCompte says the G7, G20, International Monetary Fund or UN could call for its adoption and the creation of a legally binding process. Once approved at this level it could become legally binding, he said.

LeCompte expects the provisions to move forward in the next few months, just as the hurricane season could be approaching its historically most volatile period in the fall.

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Eric LeCompte featured in video on Debt Relief during United Nations meetings

Eric LeCompte, Executive Director of Jubilee USA was recently featured in a video speaking on the Financing for Development meetings at the United Nations last week in New York with Reverend Osbert James. Read excerpt below and follow link to full video.

“Moving Forward on Debt and Debt Sustainability: With a special focus on the situation of Caribbean Countries”

On the sidelines of the 2018 FfD Forum, FES and partners have teamed up to present a luncheon and roundtable - with a special focus on the situation of Caribbean countries - to discuss sovereign debt & debt sustainability.

The 2018 FFD draft outcome document calls for movement toward a global consensus on guidelines for debtor and creditor responsibilities in borrowing by and lending to sovereigns, building on existing initiatives. UN Member States are requesting the Inter-agency Task Force – in its 2019 report – to carefully analyze these initiatives, as well as to advance the analysis of state-contingent debt instruments, GDP-linked bonds, insurance coverage and other innovative mechanisms, as a means of reducing risks to sovereign balance sheets, particularly in SIDS, LDCs, LLDCs and open economies more vulnerable to disasters.

To take meaningful steps toward a global consensus on sovereign debt sustainability ahead of next debt crisis, against which the IMF and Civil Society Organisations, are raising their warnings, it is imperative that stakeholders move quickly to identify 1) where there is already agreement (such as on causes, if not solutions to crises, on concerns regarding predatory behavior, on the need to improve restructuring procedures), 2) where there is possible agreement (such as on illicit financial flows, or on the need to turn external debt into an instrument of support in case of natural disasters), and 3) where there is a lack of agreement (such as the design of an improved debt restructuring regime).

On the sidelines of the 2018 Financing for Development Forum, the Permanent Mission of Antigua and Barbuda, Friedrich-Ebert-Stiftung (FES), erlassjahr.de, and Jubilee USA have teamed up to present a luncheon and roundtable, which was held under Chatham House Rule, to discuss – with a special focus on the situations of Caribbean countries, who have suffered serious natural disasters in recent years –different views and perspectives on what is needed to move forward within the multilateral system on sovereign debt and debt sustainability. In addition to representatives from the co-organizers, the discussion was attended by representatives of UN Member States, as well as members of the secretariat of the FFD Office, UNCTAD and the IMF.

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Eric LeCompte Featured in Devex on Debt Relief for Islands at UN FFD Forum

Eric LeCompte, Executive Director of Jubilee USA was recently featured in Devex speaking on the Financing for Development meetings at the United Nations last week in New York. Read excerpt below and follow link to full article.

UN financing forum sees focus on debt relief for vulnerable Caribbean nations

So far, there is no specific debt relief action plan for the Caribbean region, but it’s something to watch for at upcoming global summits, including the opening of the U.N. General Assembly in the fall, said Eric LeCompte, the executive director of the Washington, D.C.-based Jubilee USA Network.

“We see a consensus emerging about the need for a debt relief process for Caribbean islands to protect them from hurricanes and other natural disasters,” LeCompte said. “What people are really talking about now, is how do we have a permanent process in place that looks to structure and relieve debt after a crisis occurs?”

“There is momentum with the hurricane season, trying to get anything in place,” LeCompte explained. “I’ve been doing this for a long time and I have never seen a moment where global decision makers are taking the situation as seriously as they are now. The seriousness is incredibly significant. If Jamaica gets hit by a Category Five, what does that do to the entire region?”

Read more here

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Reactions to the 2018 UN Forum on Financing for Development

Members and experts from the Civil Society Financing for Development Group release statements at the conclusion of the 2018 Financing for Development Forum.

Commenting on forum discussions around debt relief processes for Caribbean and small islands, Eric LeCompte, Executive Director of Jubilee USA, said:

"During the Financing for Development Forum we saw growing concern about protecting small developing islands before the next hurricane season. There is growing consensus to put in place permanent debt relief processes to protect small islands when they are hit by natural disasters. We must all act quickly as the next hurricane season begins in weeks."

Lidy Nacpil, Coordinator of the Jubilee South Asia Pacific Movement on Debt and Development, stated:

"We welcome the attention that the UN FfD is giving to climate finance.  Development and climate are inextricably linked. But we are concerned that climate finance is not lumped together with official development assistance. Climate finance is not 'aid,' it is an obligation of rich countries to developing countries and must be additional to ODA."

Tove Maria Ryding, Tax Coordinator at the European Network on Debt and Development (Eurodad), added:

"After global tax scandals such as the Paradise Papers, it’s become very evident that our global tax system is deeply flawed and full of loopholes, and we know that illicit financial flows is costing developing countries billions of dollars every year. At the Financing for Development Forum, the developing countries called for an intergovernmental UN negotiation to solve these issues, but the rich countries are still dragging their feet on this point. One is left wondering how many international tax scandals it will take, before the rich countries are ready to come to the table and negotiate global solutions to this global problem."

The Civil Society FfD Group is an open mechanism for civil society organizations and networks to engage collectively, build synergy and speak with one voice in the formal UN FfD process and all its related and interconnected spaces.

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Eric LeCompte Quoted in ValueWalk on Rising Global Debt

Eric LeCompte, Executive Director of Jubilee USA was recently featured in ValueWalk speaking on global debt following the Spring International Monetary Fund and World Bank meetings in Washington, D.C. and the Financing for Development meetings at the United Nations last week in New York. Read excerpt below and follow link to full article.

At UN Meetings, Global Leaders Raise “Undiplomatic” Concerns Regarding Debt

By: Mark Melin

For the past ten years, the global economy has been growing and on a sustainable path, the IMF has reported in typically polite and diplomatic language. But the warnings contained in recent reports have been the focus of concerned global leaders attending UN meetings in New York this week, said Eric LeCompte, Executive Director of Jubliee USA and a UN consultant on sovereign debt.

LeCompte, attending the UN meetings, said that discussions were “less diplomatic” than normal as concerns were raised that a debt crisis could materialize if steps are not taken to avert the problem.

Looking at the emerging world economy, sovereign debt has reached levels where it is becoming non-productive. In areas such as Africa, for instance, debt to GDP levels is reaching 55%, up from 30%. “When debt in the developing world reaches 55%, the increased debt is used to make interest payments and does not go directly into the Economy,” LeCompte notes.

As the IMF looks at the financial landscape, it sees debt levels moving to unsustainable levels and speculative financial behavior, led by the roll-back of Dodd-Frank legislation, creating a toxic brew. “This is the formula that ushered in the 2008 financial crisis,” LeCompte said, noting his surprise that the IMF would be considering a universal basic income at the same time they are expressing serious concern over debt levels. He said concerns over rising populism, particularly if there is an economic downturn, are driving the IMF to get ahead of the issues.

Read more here

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UN Forum Wrestles with Economic Policies 10 Years After Financial Crisis

Islands Call for Debt Relief Ahead of Next Hurricane Season

Officials from governments, the IMF, World Bank, the private sector and NGOs meet this week at the United Nations for the Financing for Development (FFD) Forum. The annual gathering seeks to implement the Addis Ababa Action Agenda that governments endorsed in 2015 in Ethiopia. 

"These meetings are critical to address the root causes of poverty and raise revenue in the developing world," said Jubilee USA Executive Director Eric LeCompte. LeCompte has participated in FFD negotiations since 2012. "Better policies on tax, debt, trade and transparency issues are critical for lifting people out of poverty."

During the forum, public statements and private negotiations focus on new debt relief processes for Caribbean and small islands ahead of the next hurricane season. Islands from Dominica to Barbuda are still recovering from the 2017 hurricane season.

"There is growing consensus among a number of decision making bodies to put in place permanent debt relief processes to protect small islands when they are hit by natural disasters," noted Eric LeCompte who supported similar processes at the IMF. "We must all act quickly as the next hurricane season begins in just a few weeks."

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All Africa Talks with Eric LeCompte about Global Debt

Eric LeCompte, Executive Director of Jubilee USA was recently featured in All Africa speaking on global debt. Read excerpt below and follow link to full article.

Ghana: IMF Warns Ghana Over Financial Crises

By: Felix Dela Klutse

"IMF sees continued economic growth, but it's warning that continued growth is short lived," Executive Director of Jubilee USA, Eric LeCompte, has stated during the 2018 Spring Meetings of the IMF and the World Bank Group in Washington DC, USA.

He continued: "Rising debt levels are a growing risk around the world. Now is the time for countries to get their houses in order to prevent and be prepared for future financial crises."

Mr LeCompte said countries need to rebuild fiscal buffers, enact structural reforms, and steer monetary policy cautiously in an environment that is already complex and challenging in order to prevent any future financial crises.

Read more here.

 

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IMF Communiqué: Transparency and Sustainable Financing Needed to Prevent Future Downturn

The International Monetary and Financial Committee of the IMF released their communiqué of the Spring meetings, noting, "The window of opportunity remains open and should be used expeditiously to advance policies and reforms that sustain the current upswing, enhance resilience, and raise medium-term growth for the benefit of all." The IMF raised serious concerns this week that the global economy is in for a "bumpy road ahead."

Eric LeCompte, the Executive Director of the religious development group Jubilee USA, has monitored IMF meetings for 10 years and releases the following statement:

"On the anniversary of the 2008 financial crisis, the IMF issued a series of warnings about the future of the global economy. 

"We still have not done enough to improve debt restructuring and enact measures for responsible lending and borrowing. Beyond preventing the next crisis, the IMF is warning that we could have a recipe for greater inequality that further divides the rich and the poor.

"The IMF is saying that now is the time for countries to get their houses in order to prevent and prepare for future financial crises. The IMF is warning that rising debt levels are a growing risk around the world."

 

Read the April 2018 Communiqué of the International Monetary and Financial Committee

Read the April 2018 World Economic Outlook

Read the International Monetary Fund's April 2018 Global Financial Stability Report

Read about the Thursday IMF event on the 10th Anniversary of the Financial Crisis

Read about Jubilee USA's Friday event on Global Renewal and improving debt restructuring 

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IMF and World Bank Meet on 10-Year Anniversary of Financial Crisis: Global Economy has a "Bumpy Road Ahead" Warns IMF

World leaders, finance ministers, the private sector and nongovernmental organizations begin the Spring International Monetary Fund and World Bank meetings on the 10-year anniversary of the global financial crisis. On Tuesday the IMF's economic outlook report predicts short-term global growth to 3.9%, it highlights debt levels, trade policies, decreased labor participation and aging populations as risks to long-term growth.

"The IMF is saying that now is the time for countries to get their houses in order to prevent and prepare for future financial crises," noted Jubilee USA Executive Director Eric LeCompte who serves on United Nation expert groups that focus on economic issues. LeCompte has monitored IMF meetings since the onset of the financial crisis. "The IMF is warning that rising debt levels are a growing risk around the world."

On Wednesday the Fund released its Global Financial Stability Report raising concerns that the global economy faces a "bumpy road ahead." The report warns that due to short and medium-term risks, the financial system could face serious risks to growth. Recently the Fund released analysis focusing on specific concerns with rising, unsustainable debt levels in Africa.

"We still have not done enough to improve debt restructuring and enact measure for responsible lending and borrowing," said LeCompte. "Beyond preventing the next crisis, the IMF is warning that we could have a recipe for greater inequality further dividing the rich and the poor."

Read the April 2018 World Economic Outlook

Read the International Monetary Fund's April 2018 Global Financial Stability Report

Read about the Thursday IMF event on the 10th Anniversary of the Financial Crisis

Read about Jubilee USA's Friday event on Global Renewal and improving debt restructuring 

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Human lives must be focus of Puerto Rico fiscal plan

Archbishop Roberto Gonzalez, Reverend Heriberto Martinez and Reverend Enrique Camacho, religious leaders from Puerto Rico and Eric LeCompte, Executive Director of Jubilee USA wrote and Op-ed featured in The Hill called "Human lives must be focus of Puerto Rico fiscal plan" talks about need of a fiscal plan that focuses on the people in need.

Read excerpt below and follow link to the full article.

Human lives must be focus of Puerto Rico fiscal plan

By: Archbishop Roberto Gonzalez, Reverend Heriberto Martinez, Reverend Enrique Camacho, and Eric LeCompte

As Puerto Rico continues to wrestle with power outages across the island, the federally appointed Financial Oversight and Management Board soon votes on a fiscal plan for economic growth. We are concerned that the current proposed fiscal plans fail to focus on improving and protecting the lives of 3.5 million U.S. citizens living in Puerto Rico.

A final fiscal plan should meet the following criteria:

  • There should be "breathing space" for the island from debt payments. Earlier proposed fiscal plans included a 5 year moratorium on all debt payments. This debt payment moratorium should be part of the new plan. Additionally, during this period interest must not accrue on the debt.
  • Beyond this five year debt moratorium period, no debt should be paid until Puerto Rico sees positive economic growth, a reduction in child poverty and the island has rebuilt from the hurricanes.
  • Ultimately, the total debt must be restructured and the principal of the debt must be cut. The fiscal plan should reflect the need for definitive debt cancellation of at least 80 percent of Puerto Rico's debt.
  • The fiscal plan should prevent further austerity measures, set goals to reduce child poverty, ensure adequate social protections, defend against corruption and stem migration from the island. 

In recent months, the process around the creation of the fiscal plan has been combative and produced plans that fail to meet the needs of Puerto Rico’s people. We urge the governor, the oversight board, creditors, the people most affected by these crises and all stakeholders to dialogue and work together.

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