Private creditors would join debt relief processes supported by Republican and Democratic White Houses for the last 25 years, with new bills introduced in the New York Senate and Assembly.

Countries coping with the pandemic, war and multiple crises can seek debt relief under a new law just introduced by Senator Brad Hoylman-Sigal, Judiciary Committee Chair. Hoylman-Sigal's legislation, The New York Taxpayer and International Debt Crises Protection Act, S.4747, a companion bill to A.2970 that Assemblymember Patricia Fahy champions in the New York Assembly. Proponents assert that the bill will help address inflation and supply shocks hurting New Yorkers.

"As the financial capital of the world, New York has a critical role to play in addressing the crippling debt of other nations," said Hoylman-Sigal. "Our “New York Taxpayer and International Debt Crises Protection Act” (S4747) with Assemblymember Fahy will help countries struggling to recover from challenges like climate change and COVID and better take care of their constituents. At the same time, the bill will protect New York taxpayers and reduce the harmful impact of inflation. I look forward to passing it in this legislative session."

Over the last two years, the heads of the International Monetary Fund and the World Bank argued that financial jurisdictions, like New York State, should have plans for debt relief since private debt is governed by contracts in these financial jurisdictions. More than half of the world's private debt contracts are subject to New York State law.

“The global COVID-19 pandemic, war in Europe, and ongoing climate crisis have all laid bare just how interconnected the global economy has become today,” said Fahy. “New York State is the world’s financial hub — positioning us well to enact basic changes that will ensure debt relief for developing nations through investments in sustainable growth, infrastructure, and more.”

The participation of private creditors in debt relief initiatives at the same level as the US government, other governments and other creditors, will also protect US taxpayer-funded debt relief commitments. Privately-held debt represents more than 60% of debt in developing countries.

“The bill is critical for many countries struggling with soaring poverty rates and debt crises that became worse during the pandemic,” stated Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. The bipartisan group is focused on debt policies because they argue it impacts poverty and inequality in the US and abroad. “Because New York and the United States are relying on these countries for trade, their debt crises affect what we pay for eggs, flour and coffee," continued LeCompte.

Since the legislation promises such benefits to US taxpayers and consumers, the legislation is gaining traction with unions and New York major religious leaders.

“Not only will this legislation protect American taxpayers, it will spur new development and growth within the global economy, reduce stress on international supply chains, and establish clear strategies for growth in nations burdened by massive amounts of debt,” stated Fahy. “I’m proud to introduce the New York Taxpayer and International Debt Crises Protection Act with Senator Hoylman-Sigal and look forward to working on this issue with my colleagues in the state legislature to deliver economic justice for nations and peoples across the globe.”

The Sovereign Debt Stability Act (S5542A / A2970A) is a merged legislation of previous bills the New York Taxpayer and International Debt Crises Protection Act and the Model Law. This legislation seeks to prevent these abusive tactics by giving debtor states a greater ability to curtail holdout creditors while ensuring that public and private creditors participate in restructurings on comparable terms. Encouraging orderly, collaborative, and effective sovereign debt relief will support the stability of the international financial system. This will reduce shocks that disrupt supply chains and trade partnerships on which New York and the US economy rely.

The New York legislature should pass the Sovereign Debt Stability Act so indebted nations can restructure their debts fairly and to put an end to predatory lending practices that harm New York taxpayers and people around the world.

The New York AFL-CIO, the New York State Catholic Conference, the New York Council of Churches, New York AFSCME, Oxfam America, Bread for the World, Puerto Rico's religious leaders, Jubilee USA Network and African, Asian and Latin American Development Organizations are among hundreds of organizations supporting The New York Taxpayer and International Debt Crises Protection Act (S4747, A2970). Unions, religious bodies, diaspora groups and development organizations are leading the New York debt relief campaign in support of S4747 and A2970. They support this legislation to address inflation, high US food costs and the reality that developing countries need debt relief as quickly as possible. 

Please write New York Governor Kathy Hochul to pass and sign the New York Taxpayer and International Debt Crises Protection Act (A2970, S4747).

If you live in New York, please write your Senator and Assemblymember and urge them to co-sponsor the New York Taxpayer and International Debt Crises Protection Act (A2970, S4747).

Resources:

“The pandemic, war and inflation are increasing poverty around the globe,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. “Yellen knows we've lost decades of work on development and that the World Bank and development banks can do more if we can make these banks more effective."

Last October, the US led calls for a reform process of the World Bank. The agenda includes assessing proposals to increase bank lending by hundreds of billions of dollars.

“As we need development banks to do more, they will need more resources and capital,” added LeCompte. "We also need them to be more innovative to deal with multiple, growing crises."

In a 2021 letter to President Biden, the US Conference of Catholic Bishops and Jubilee USA Network called for significantly increasing multilateral development bank lending power. In March of that year, at a roundtable Jubilee USA convened with Secretary Yellen, some of the US's highest-ranking religious leaders delivered the same request to her. The leaders represented the Catholic, Methodist, Lutheran, Presbyterian and United Church of Christ Churches, as well as the Union for Reform Judaism. 

Addressing a question on debt during Thursday's talk, Yellen remarked how debt restructuring not only serves the interests of the borrowers, it also serves the interests of the creditors. She elaborated that where debt reaches an unsustainable level, it stops the country from growing, developing and investing, and thus it cannot make payments.

“If we are going to be effective in reducing poverty in countries then we need debt to be reduced and more aid delivered to countries,” stated LeCompte. "Debt relief and sufficient economic aid must go hand and hand."

Read Secretary Yellen's speech here.

Read the World Bank Group Statement on Evolution Roadmap here.

Read the letter to President Biden and Secretary Yellen from the US Conference of Catholic Bishops and Jubilee USA Network here. 

Read Treasury Secretary Yellen/Jubilee USA Network roundtable readout and release here.

 

Friends,

Most of the world's countries continue to struggle with impacts of the pandemic, soaring food prices and a climate crisis. As we review our efforts together over the last year, we moved forward solutions to the climate crisis and pandemic and we won the largest amounts of relief and aid in our 25 year history.

Read and share our 2021-2022 report as we look back on our work and continue efforts to address the root causes of poverty, inequality and climate and financial crisis.

In our report, you'll read about our New York legislation to resolve debt crises, protect US tax payers and stop economic shocks. Almost 50 countries benefited from our debt relief efforts. We won hundreds of billions in new pandemic response aid, secured student debt relief and Puerto Rico aid advanced.

We produced new research on how the pandemic is impacting 24 countries. Hundreds of Jubilee congregations, faith communities and partners organized with us to push the G20, IMF and White House to implement policies to resolve the current climate and financial crisis - and prevent future crises.

While our campaigns continue to succeed, we'll need your help as world leaders continue to make critical decisions about our lives, livelihoods and planets. Read and share our Jubilee USA Network 2021-2022 report.

We look forward to continuing to work with you in the new year and beyond.

Gratefully,

Aldo Caliari
Senior Director of Policy and Campaigns
Jubilee USA Network
www.jubileeusa.org/support-us

PS. Please join me and donate now to support our Jubilee USA mission and efforts to protect our lives, livelihoods and planet.

COP27 Agreement Asserts Climate Change Results in High Debts and Development Failures

Resources for Climate Action and Poor are Major Themes for Egypt Meetings

President Biden joins ninety heads of state in Sharm el-Sheikh, Egypt, for the COP27 climate summit beginning this weekend. UN analysis finds that current action commitments fall short of reaching global warming goals made during the 2015 UN Paris Agreement.

“This year we experienced record heat waves, floods and natural disasters. If we fail to take action to address climate change, we'll see increasingly worse impacts from the climate crisis,” stated Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. “As world leaders gather in Africa, the continent most vulnerable to climate change, we see the impacts of the climate crisis on the poor and our global economy.”

The Organization for Economic Cooperation and Development reported that in 2020 annual climate aid from developed to developing countries was $17 billion short of progress towards a $100 billion target agreed back in 2009. At the UN summit, leaders negotiate a revised climate action funding target for beyond 2025. 

"More than half of developing countries spend a quarter of their budget on paying debt," noted LeCompte, a United Nations finance expert. "Debt relief is an important part of reaching climate action goals for countries."

At October IMF and World Bank meetings, climate action was a critical part of discussions on debt and lending. Global leaders began a process to reform development banks to lend more for global priorities such as climate. A new IMF process also began that uses donations from wealthy countries to support long-term, cheap loans to developing countries that can support climate action.

“The success of the climate summit is all about showing us the money,” shared LeCompte. "The bottom line is whether or not we can raise the financial contributions to address the climate crisis."

World Development Banks Meet for Third Annual Summit

World leaders and more than 450 development banks meet for two days on aligning loans with crisis recovery and tackling environmental challenges. The third yearly Finance in Common Summit takes place in Abidjan, Cote d’Ivoire, amidst a world economy facing multiple shocks and calls for increasing lending capacity for development banks.

“What distinguishes this third Finance in Common from the two previous ones, is that now there are proposals to push development banks to do more,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. “Development banks play an important role in crises. With the pandemic, Ukraine war, inflation, food prices and climate challenges, we will demand more of them.”

In July, a G20-established panel of experts proposed changes to the way banks determine loan risk, assess available capital, and communicate with credit rating agencies. Frannie Léautier, Senior Partner at SouthBridge Group and CEO of SouthBridge Investments, chaired the group, comprising fourteen experts from a variety of backgrounds. According to the panel, global development banks can lend hundreds of billions more to poor countries. G20 officials met on the proposals last week.

“The report shows a pathway to expand development bank lending dramatically,” noted LeCompte who tracks G20 policies.

Earlier this month, Treasury Secretary Janet Yellen called for multilateral development banks to devise new approaches to respond to global challenges.

“Development banks require reforms of their operations, practices and lending models in order to deal effectively with the current crises,” stated LeCompte.

African Catholic bishops and religious leaders met in Accra, Ghana, last month and asserted that development banks can use more capital to provide loans in times of crisis, but they lack the resources to meet 21st century challenges. In a letter to President Biden early last year, Jubilee USA Network and the US Conference of Catholic Bishops called for significantly increasing multilateral development banks lending volumes, through a mix of increasing and improving use of capital. A similar letter was sent with more than 200 religious groups echoing the need for boosting development bank capacity.

The G20 is working on processes for wealthy countries to disburse some of their pandemic emergency currency, or Special Drawing Rights to poor countries. The IMF created $650 billion in SDRs, to help countries respond to the pandemic, of which advanced economies received more than $400 billion. This month, the IMF initiated operations for a new lending window, the Resilience and Sustainability Trust, that will fund its loans with Special Drawing Rights aid that wealthy countries share.

The International Monetary Fund, World Bank, G20 and G7 conclude meetings this week focused on the global economy. The impacts of the pandemic, Ukraine war, inflation, developing country debt, food security and climate crisis are on the agenda.

"Ahead of the meetings, the IMF reported that the US and other large economies will see contractions and this impacts the entire global economy.

“Everyone is hurt by rising food and energy prices. The burden is greatest on the poor. 

"I'm concerned that some of the proposed solutions of austerity and higher interest rates will cause greater pain.

"As the dollar gets stronger, developing country debts become dangerously unsustainable."

 

Jubilee USA, IMF and World Bank Press Conference: Friday, October 14th, 2:15 PM, Community Park, outside of the IMF. Religious and development groups respond to the IMF and World Bank Meetings and International Monetary and Finance Committee (IMFC) outcomes. View the advisory here. Link to the online and in-person press registration here.

Find Jubilee USA's press release on the G20 meeting here.

Find Jubilee USA's October 14th and 15th interfaith vigil, press conference and teach-in details here.

Read Jubilee USA's press release on the World Economic Outlook and Global Financial Stability reports here.

Read Jubilee USA's press release on IMF chief Kristalina Georgieva's curtain-raiser speech here. 

Read Jubilee USA's press release on the IMF Food Shock Window here.

G20 Finance Ministers Struggle With Economic Slowdown, Global Recession and Highest Inflation in Forty Years

Continuing War, Pandemic, Inflation Drive Up Fears of Global Recession

As world leaders arrive for G7, G20, IMF and World Bank Meetings, the IMF downgraded economic growth to 2.7%. As the global economy grapples with the Ukraine war, pandemic, a food crisis and inflation, the IMF warns of recession in two reports.

"It seems likely that we are heading into a recession,” said Eric LeCompte, the Executive Director of the development organization Jubilee USA Network. "The US and other large economies will see contractions and this impacts the entire global economy.”

The released flagship IMF World Economic Outlook report considers that rising interest rates could trigger more debt crises in developing countries. 

"As the dollar gets stronger, developing country debts become dangerously unsustainable,” added LeCompte. "The war and rising interest rates are putting developing countries in an even more difficult situation."

In its Global Financial Stability Report, the IMF stated that the persistence of inflation is a challenge the world economy has not faced in decades.

"The combination of high inflation and recession deeply affects the poor,” stated LeCompte. "Some of the proposed solutions of austerity and higher interest rates will cause pain."

In a chapter devoted to climate finance, the report indicated that developing countries will need $300 billion a year just to adapt to the impacts of climate change, a figure that may grow larger by 2050.

"We need to protect our planet and we need to limit the economic losses posed by climate change," shared LeCompte.

On Wednesday, G7 and African finance ministers meet and on Thursday, G20 finance ministers. The IMF and World Bank main policymaking bodies meet on Friday.

Read the full World Economic Outlook Report here.

Read the full Global Financial Stability Report here.

Read Jubilee USA's statement on the IMF World Economic Outlook report here.

Read Jubilee USA's statement on the Global Financial Stability Report here.

Read Jubilee USA's press release on IMF chief Kristalina Georgieva's curtain-raiser speech here. 

Read Jubilee USA's press release on the IMF Food Shock Window here.

Find Jubilee USA's full list of this week's events here.

Find Jubilee USA's October 14th and 15th interfaith vigil, press conference and teach-in details here.

Unseen in Decades, Inflation Challenges Global Economy

As world leaders arrive for the Annual IMF and World Bank Meetings, the IMF releases its flagship World Economic Outlook report. The IMF downgraded economic growth to 2.7%, as the world economy grapples with the Ukraine war, pandemic, a food crisis and inflation.

Eric LeCompte, Executive Director of the religious development group Jubilee USA Network and a United Nations finance expert who monitored IMF meetings since 2010, releases the following statement on the IMF Meetings and World Economic Outlook Report:

"It seems likely that we are heading into a recession.

"The US and other large economies will see contractions and this impacts the entire global economy.

"The war and rising interest rates are putting developing countries in an even more difficult situation.

“Rising food and energy prices hurt everyone, in particular the poor. 

"Some of the proposed solutions of austerity and higher interest rates will cause pain.

"As the dollar gets stronger, developing country debts become dangerously unsustainable."

Read the full World Economic Outlook Report here.

Read Jubilee USA's press release on IMF chief Kristalina Georgieva's curtain raiser speech here. 

Read Jubilee USA's press release on the IMF Food Shock Window here.

 

Location: Edward R. Murrow Park

Register by clicking here. To stay up to date on these events, visit our website at: https://www.jubileeusa.org/imf_world_bank_annual_meeting_mobilization_22

Statement Precedes G7, African Finance Ministers and IMF Washington Meetings