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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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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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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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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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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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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Antigua and Barbuda and Islands Dealing with Irma Should Stop Debt Payments

As Hurricane Irma heads to the US coast, a religious development group is calling for debt payments to be suspended until Antigua and Barbuda and other severely impacted Caribbean nations recover from the storm. Jubilee USA is also calling for grants, as opposed to loans, to be made available for the island countries and the US territories.
"The island of Barbuda was hit hard and fourteen hundred people are homeless. The country of Antigua and Barbuda and other severely impacted islands should stop paying debt until they rebuild and recover," stated Jubilee USA Executive Director Eric LeCompte. LeCompte serves on United Nation debt expert groups. "The International Monetary Fund can authorize a moratorium on debt payments so Antigua and Barbuda could immediately access $3 million for recovery efforts."

Antigua and Barbuda is scheduled to make a debt payment of $3 million to the International Monetary Fund today. The Caribbean islands of Anguilla, Antigua and Barbuda, Saint Barthélemy, Saint Martin and the British and US Virgin Islands faced some of the most severe impacts as Hurricane Irma swept across the Caribbean. The US territory of Puerto Rico, although hit by the storm, escaped the full level of destruction originally predicted. 

"For all islands impacted by Irma, we need to see reconstruction grants, not more loans," said LeCompte. "The White House and Congress must continue to make these grants available to Puerto Rico and the US Virgin Islands. Similarly, the IMF and World Bank should make grants available to other islands and nations affected."
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Audit of Mozambique Debt Reveals Corruption

Ahead of President Trump's first G20 meeting in Germany this weekend, Mozambique released an audit exposing violations of the country's laws to secure now-defaulted loans. Nearly $2 billion in loans were secured by the government of Mozambique but hidden from the public and Parliament. Last week, Business Insider reviewed CIA data and ranked Mozambique as one of the most indebted countries in the world. The United Nations Development Programme ‎lists Mozambique as one of the least developed countries in the world at 181 out of 188 countries. 

“We know that the financial crisis in Mozambique was caused by corruption at the national and international level,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA. “It seems a group of Mozambique's leaders and creditors conspired to steal from some of the world's poorest people.”

The financial scandal and debt crisis facing Mozambique will be discussed in Hamburg by G20 leaders in the context of new responsible lending and borrowing guidelines during their annual two day meeting. Finance Ministers for the Group of 20 supported these "Operational Guidelines for Sustainable Financing" at their March meeting in Baden-Baden, Germany.

“The G20 is calling on its member countries to pass stronger laws to stop corruption and enforce responsible lending and borrowing,” said LeCompte who serves on United Nation debt expert groups. “While the new G20 guidelines fall short on determining whether or not a country's debt is sustainable, the guidelines are progress in protecting vulnerable people from economic crisis."

The Operational Guidelines for Sustainable Financing are available here

The Executive Summary of the audit of Mozambique is available here
 

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Puerto Rico Power Utility Files for Bankruptcy

The Puerto Rico power utility PREPA, filed for bankruptcy protection under the Title III process created by the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA).

Eric LeCompte, Executive Director of the religious development group Jubilee USA, releases the following statement:

"It's important that Puerto Rico's power utility filed for Title III bankruptcy protection. We can expect a more favorable debt restructuring for the people of Puerto Rico than the previous debt deal.

"In order for Puerto Rico to get out of this crisis, all debt should be dealt with through one comprehensive process. This is another reason that it is good news ‎that PREPA files under the same process that is being used to resolve most of the island's debt."

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European Union Votes on Corporate Transparency Regulations

The European Parliament is set to vote on landmark corporate transparency rules known as "country-by-country" reporting. Under the new law all major multinational corporations, including US businesses that work in Europe, will publicly disclose taxes and other payments made to governments in countries where they operate. The European Union (EU) Parliament likely will vote in favor of the regulations before Wednesday and then the EU Council will make the final decision. ‎

“This is exciting news. Europe is moving forward the most comprehensive rules to date to stop bribery and encourage corporations to pay taxes where they operate,” noted Eric LeCompte, Executive Director of the religious development group Jubilee USA. LeCompte served on United Nations expert groups that focused on these new rules. “Unfortunately as we are making progress in Europe less comprehensive transparency regulations are threatened with repeal in the United States.”

‎As new transparency regulations in Europe move forward, similar US provisions are under attack. Section 1504 of the US Dodd-Frank Act requires oil, gas and mining industries to perform similar US reporting to the European measure. Congress slowed the US provision from moving forward earlier this year and then the US House of Representatives voted to repeal Section 1504 entirely. ‎Jubilee USA leads a campaign to prevent the Senate from repealing the transparency meassure.

“Corporate transparency rules are vital for combatting corruption and ensuring that our economy protects vulnerable communities,” said LeCompte.

The EU legislation includes an exemption for corporations to not disclose information if the disclosure would threaten commercial interests.

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