Bill Can Ease Global Supply Shocks and Help Vulnerable People Weather Pandemic and Ukraine Economic Shocks

Ukraine War, Debt and Inflation were Focuses of the G7 Meeting

G7 finance ministers issued their strongest statement to date pressing China and the private sector to engage in debt relief efforts for developing countries. Germany, holding the G7 presidency this year, hosted the meetings in Bonn and Königswinter.

“The G7 put the spotlight on the need for China and the private sector to participate in debt relief initiatives,” noted Eric LeCompte, Executive Director of Jubilee USA Network. LeCompte has monitored the G7 meetings for more than a decade.

G7 countries stressed the need for private creditors to participate in debt relief. On Thursday, New York State Assemblymember Patricia Fahy introduced the New York Taxpayer and International Debt Crises Protection Act. The bill compels private creditors operating under New York State law to participate in debt relief initiatives at the same level as the US government, other governments and other creditors.

“New York legislative action ensures private creditors will participate in the debt relief that the G7 is calling for,” added LeCompte.

The G7 pledged to support Sri Lanka debt restructuring efforts as the developing country became the latest one to default.

“The fact that Sri Lanka is not covered by current debt relief agreements shows the urgency of expanding relief initiatives to more countries facing crises,” stated LeCompte.

The Ukraine war, inflation, food and climate action were key aspects of the three-day meetings. G7 presidents and heads of state meet in Schloss Elmau, Germany in June.

Read our press release on the newly-introduced New York Private creditor bill here.

Read the full G7 Finance Ministers Communiqué here.

Download the New York Taxpayer and International Debt Crises Protection Act bill (English) as a PDF here.

Download the New York Taxpayer and International Debt Crises Protection Act bill (español) as a PDF here.

Download the New York Taxpayer and International Debt Crises Protection Act bill memo (English) as a PDF here.

Download the New York Taxpayer and International Debt Crises Protection Act bill memo (español) as a PDF here.

Bill: 

Bill Memo: 

Download the New York Taxpayer and International Debt Crises Protection Act bill (English) as a PDF here.

Download the New York Taxpayer and International Debt Crises Protection Act bill (español) as a PDF here.

Download the New York Taxpayer and International Debt Crises Protection Act bill memo (English) as a PDF here.

Download the New York Taxpayer and International Debt Crises Protection Act bill memo (español) as a PDF here.

US Taxpayers, Consumers and Economy Poised to Benefit from Action

Leaders Pledge Vaccines, Treatments and Health Investment

Eric LeCompte and Cathy Feingold, the Deputy President of the ITUC and International Director of the AFL-CIO, writing for Barron's call for global economic policies in response to the Ukraine war and the health and economic crises severely impacting most of the world due to the pandemic. . Read the full article here.

A Resilient Global Economy Is Within Reach

By Eric LeCompte and Cathy Feingold

War rages in Ukraine and a global crisis looms. Gas prices rise and around the world, wheat, corn and fertilizer prices skyrocket. The International Monetary Fund says the global economy will slow, contributing to food shortages in developing countries. Russia’s war on Ukraine combined with Covid-19 made a terrible global situation worse. There are economic policies that Republican and Democratic leaders can find common ground with the Biden administration to make the U.S. and global economy more resilient in the face of these threats.

Crux Quotes Eric LeCompte on African Bishop Statement. Read the full article here. 

African bishops call for world leaders to reject ‘unequal and unsustainable’ economic model

By John Lavenburg

NEW YORK – As world finance leaders meet this week in Washington, D.C., African bishops are calling for a “viable” plan for the continent to emerge from the current economic and health crisis with “resilience,” and for decisions that promote an economically just society.

“As we work for recovery, we are not doing so in order to return to an unequal and unsustainable model of economic and social life, where a tiny minority of the world’s population owns half of its wealth as millions live below the poverty line,” said an April 20 statement from the Justice, Peace and Development Commission of the Symposium of Episcopal Conferences of Africa and Madagascar (SECAM).

Emerging markets and developing economies will bear the brunt of the forecasted challenges. However, Eric LeCompte, executive director for Jubilee USA Network, told Crux that the reports are actually “really bad news for all of the countries of the world.”

Ukraine War Derails Release of IMF and G20 Communiques

World leaders attending the IMF and World Bank Spring Meetings failed to agree on communiques usually issues during these meetings. On Wednesday, G20 finance ministers failed to release a communiqué over Ukraine wording. On Thursday, the International Monetary and Financial Committee failed to release their communiqué and as of the writing of this article, the Development Committee did not release their customary Friday communiqué.

The war in Ukraine loomed large at the meetings, as the Fund forecast it will cut almost an entire percentage point to global economic growth this year. Talks addressed COVID response and recovery, food prices, inflation, debt crises and climate.

“Before the shocks from the Ukraine war, developing countries faced a series of crises,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. “Another casualty of the war is that world leaders can’t fully focus on pandemic response, inflation, climate change and rising poverty rates.”

The shock threatens a fragile pandemic recovery, with more than 100 countries not on track to vaccinate 70% of their people. Rising food and fuel price inflation will add to the 100 million people that fell into poverty since the pandemic.

“Developing countries now have little room to protect their most vulnerable from rising food prices,” added LeCompte. "The pandemic and the Ukraine war are making food, fuel and fertilizer inaccessible to many developing countries."

In the face of war impacts and rising interest rates, a growing number of countries face debt defaults. Three countries applied to the G20 debt reduction process set up in late 2020, and none of them has received relief.

“The discussion on debt remains perhaps the most difficult in the G20,” shared LeCompte. “The IMF and World Bank leadership put forward valuable and practical proposals to move forward debt relief, but no decisions were made on the proposals.”

Jubilee USA Releases Statement on World Bank and IMF Spring Meetings

The International Monetary and Financial Committee (IMFC), the IMF policymaking body, failed to issue it's yearly communiqué during the IMF and World Bank meetings. Instead, the chair of the IMFC issued a separate statement. The IMFC met on COVID response and recovery, the impacts of the Ukraine war on the global economy, food prices, inflation, debt crises and climate.

Eric LeCompte, Executive Director of the religious development group Jubilee USA Network and a United nations finance expert who monitored G20 meetings since 2010, releases the following statement on the IMFC meeting, IMF and World Bank Spring Meetings:

"Another casualty of the Ukraine war is that world leaders can't fully focus on pandemic response, inflation, climate change and rising poverty rates.

"Before the shocks from the Ukraine war, developing countries faced a series of crises. The war in Ukraine makes a terrible situation even worse.

"The IMF reports that the shock of the Ukraine war threatens a fragile COVID recovery.

"In more than 100 countries that are not on track to vaccinate 70% of their population, the pandemic is far from over.

"The meetings failed to make progress on access to vaccines, tests and treatments in the poorest countries.

"The war compounds pandemic supply chain shocks and fuels further inflation.

"Amidst ongoing health and economic impacts of COVID, developing countries now have little room to protect their most vulnerable from rising food prices.

"With growing food crises, we are worried about social unrest which could destabilize some countries.

"We expect rising interest rates and the repercussions of the Ukraine war to make more countries unable to service their debts.

"As shocks mount, the number of countries facing debt defaults keeps rising.

"We needed the G20 to urgently agree on ways to fix the shortcomings of their debt reduction process.

"The IMF and World Bank leadership put forward valuable and practical proposals for G20 Common Framework reform before these meetings, but we do not see decisions on them. 

"The IMF approved the Resilience and Sustainability Trust to provide climate and pandemic preparedness in vulnerable countries.

"Wealthy countries need to fully fund the new IMF trust.

"Energy and food security concerns could derail the urgent action needed to halt climate change."

Africa Needs Debt Relief and Aid for Development Progress, Explain Religious Leaders

Wealthy countries should direct more of their emergency currency funds, or Special Drawing Rights (SDRs), to help African countries emerge from the crisis and resume development progress, said the body that represents Catholic Bishops from the region. In a statement “Financing Crisis Recovery with Hope for the most Vulnerable in Africa,” the Justice, Peace and Development Commission of the Symposium of Episcopal Conferences of Africa and Madagascar (SECAM) addressed leaders attending the World Bank and IMF Spring meetings. Bishop Sithembele Siphuka, First Vice President of SECAM and Commission Chair, signed the statement.

“We call on G20 Finance Ministers and other world leaders . . . to put in place viable plans for Africa to emerge from the crisis with resilience and resume progress towards [global development and climate goals],” said the bishops.

The statement highlights that Africa is home to two-thirds of the world’s extreme poor and the pandemic pushed 40 million more Africans into extreme poverty, lacking access to basic goods and services like health, education, food, water. The Ukraine war impacts on food and energy prices will add to their hardship.

“Religious leaders in Africa are calling for changes in the financial system that will benefit the most vulnerable,” said Eric LeCompte, Executive Director of religious development group Jubilee USA Network. Jubilee USA Network partners with religious leaders on international economic and development policies. “The African bishops inspire decision makers to act in the face of rising poverty and debt in Africa.”

To support global pandemic recovery, the IMF last year created $650 billion SDRs.

“We welcome these resources which are fast, without conditions and add little or no debt, but are concerned that out of this amount, only $33 billion went to African countries,” the bishops shared.

World Leaders Gather for G20, IMF and World Bank Meetings

As world leaders descend for IMF, G20 and World Bank Meetings, the IMF forecasts high food prices, inflation and lower global growth due to the war in Ukraine and the pandemic.

"The pandemic and Ukraine war are significantly hurting poor people who live in the poorest countries,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network and a United Nations finance expert who has monitored IMF meetings since 2010. “The shock of the Ukraine war hits as most countries were still struggling with health and economic crises spurred by the pandemic.”

Inflation is a central concern in the World Economic Outlook report, with the war-driven high food and energy prices adding to pandemic-related supply chain disruptions. Another concern are lagging vaccination rates in poor countries that make virus mutations a continuing risk to the global outlook.

“We are failing to meet global vaccination targets and that means the coronavirus will persist all over the world." noted LeCompte. "We need better tools to deal with debt crisis and prevent future financial crises."

In its Global Financial Stability Report, the IMF discussed concerns on the war impacts on financial markets. The flagship report also underscored that energy and food security concerns put at risk efforts to halt climate change.

"The IMF is right that a solution to the multiple crises should include peace in Ukraine, aid to countries in need, addressing climate change and solving debt crises," stated LeCompte.

Jubilee USA Network Releases Statement on Report and IMF Meetings

The IMF releases the 2022 Global Financial Stability Report raising concerns about Ukraine war impact, debt and risky business deals of financial technical firms.

Eric LeCompte, Executive Director of the religious development group Jubilee USA Network and a United Nations finance expert who has monitored IMF meetings since 2010, releases the following statement on the IMF Global Financial Stability Report and the upcoming IMF meetings:

"Among the many threats to financial stability, we are most concerned by the Ukraine war, the health and economic crises caused by the pandemic, climate challenges and serious debt crises.

"The reports lays out concerns around how much sovereign debt is owed to banks. When these banks are based in a country facing a debt crisis, the crisis is more significant when you can't pay back the banks of your nation.

"Energy self-reliance for a country is clearly connected to renewable sources of energy.

"Rising inflation and tougher financial markets hit developing countries at a time when they still struggle with health and economic COVID crises.

"The IMF foresees energy and food security concerns will put at risk efforts to halt climate change.

"Digital banks and fintech companies need clear rules and more accountability to operate in the financial system without creating more risks to economic stability."

Read the IMF Global Financial Stability Report here.

Ukraine War and Pandemic Drive High Food Prices and Inflation

The IMF releases its flagship World Economic Outlook report. Faced with the war in Ukraine and the pandemic, the IMF forecasts lower global growth.

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:

"The Ukraine war is causing high food prices and global inflation.

"Before the war in Ukraine, most countries were still struggling with health and economic crises spurred by the pandemic.

"The pandemic and Ukraine war are significantly hurting poor people who live in the poorest countries.

“Lagging vaccinations in the poorest countries means virus mutations remain a risk to the global economic outlook."

"Beyond the Ukraine war and the pandemic, we have unsustainable debts and shocks from climate change that make the current situation impossible for many developing countries.

"The IMF is right that a solution to the multiple crises should include peace in Ukraine, solving debt crises, aid to countries in need and addressing climate change."

Read the full World Economic Outlook Report here.

Read Jubilee USA's press release on Secretary Yellen's speech to the Atlantic Council here. 

Read Jubilee USA's press release on the creation of the Resilience and Sustainability Trust (RST) here. 

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

Read Eric LeCompte's piece for Barron's on Ukraine here. 

IMF Head Raises Global Challenges Ahead of World Leader Meetings in "Curtain Raiser" Speech

The war in Ukraine will add to the pandemic crises that most countries are struggling with and lengthen the recovery in developing countries, said International Monetary Fund (IMF) chief Kristalina Georgieva. In her curtain-raiser speech, ahead of next week’s IMF and World Bank meetings, she shared that the IMF projects more than 140 countries face worse prospects in the coming months.

“As incomes drop and the cost of living rises, poverty increases,” stated Jubilee USA Executive Director Eric LeCompte who has monitored IMF policies for more than a decade. “With the challenges of the pandemic, poverty increases and it will be harder to lift people out of poverty.”

Georgieva called for improvements to the G20 Common Framework – a debt restructuring process the group set up a year and a half ago. Up to 73 countries are eligible to seek relief but only three requested relief so far. Ethiopia, Zambia and Chad, who applied for the framework, have not yet received any debt reduction from the G20 process. More than 60% of developing low-income countries face debt crisis.

“If the tools for debt crisis resolution are not functioning, developing countries will delay requesting help from processes," noted LeCompte who is a United Nations finance expert.

In a separate statement today Georgieva shared calculations that for every percentage point that food prices go up, 10 million more people fall in poverty.

“The challenge of food insecurity and the potential for social unrest is a frightening part of the current IMF diagnosis.” added LeCompte.

View Managing Director Kristalina Georgieva's Spring IMF Meetings Curtain Raiser Speech here.

Tool Accepts Donations of Special Drawing Rights Aid

The IMF Board of Directors established a new fund to aid developing countries with long-term pandemic and climate challenges. The Resilience and Sustainability Trust (RST) offers low-cost loans to developing countries with emergency currency or Special Drawing Rights (SDRs) that wealthy countries will contribute.

“The new trust provides an important way for wealthy countries to support developing countries struggling with the impacts of crises spurred by the pandemic and climate change,” said Eric LeCompte, Executive Director of religious development group Jubilee USA Network and a United Nations finance expert. “With the growing challenges that developing countries face and new global shocks from the war in Ukraine, we need more tools like this trust.

In August the IMF created $650 billion SDRs. Due to IMF rules, about $230 billion went to developing countries and more than $400 billion went to developed countries. The RST is a process that enables wealthy countries use their SDRs to aid developing countries. Countries can also pledge SDR funding to the Poverty Reduction and Growth Trust, a fund that lends at a zero interest rate but supports only the poorest countries.

“The decision to allow developing middle-income countries to access the new trust recognizes the significant difficulties these countries face,” added LeCompte.

The Fund seeks to mobilize $45 billion for the RST in the coming months. The G20 continue discussions on how to channel SDRs through development banks.

“The new trust is a start, but we will need additional ways to donate Special Drawing Rights to developing countries that struggle to meet development goals and deal with health crises," stated LeCompte.

Read IMF Managing Director's full statement on the creation of the RST here.

The IMF needs more tools to fight modern, potentially more frequent global crises, Treasury Secretary Janet Yellen argued in a speech to the Atlantic Council.

“Health, climate and development challenges are creating worse economic shocks and leading to crises that are harder to solve," said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. “In the face of crisis, countries with more resources can act forcefully while poor countries get left behind."

Yellen’s speech comes days before she joins world leaders for G20 and World Bank/IMF meetings focused on developing countries struggling with debt, vaccine access and climate change. The Ukraine war brings a new shock to the global economy that leaders will discuss. Recently, IMF staff warned that 60% of poor countries are facing debt crisis or economic instability.

“The Ukraine war adds to the dramatic debt challenges in countries that already struggled with the pandemic,” added LeCompte. “It's clear that we need stronger and more efficient tools to solve economic crises.”

Yellen addressed international tax, trade, climate finance, health and pandemic preparedness reforms to modernize global financial institutions so they are fit to face global 21st century challenges.

Read Yellen's full speech here.

Read Eric LeCompte commentary in Barron's on Ukraine's debt and the lack of global financial crisis tools here.

Devex Quotes Executive Director Eric LeCompte on Development Finance. Read the full article here. 

Devex Invested: Can development finance fix global inequality?

By Adva Saldinger

An expected outcome document from the 2022 forum is likely to reiterate many of the positions agreed in previous years, particularly around tax, trade, and anti-corruption efforts, along with economic and aid issues, according to Eric LeCompte, the executive director at Jubilee USA Network.

But a draft of the document has a few notable additions, he tells me. The final version is likely to recommend an international summit on development financing in 2024. And the draft has stronger language on debt — saying, for example, that the G-20’s Common Framework for debt treatments should move quickly, with a clear process that includes a debt standstill during negotiations. It also calls for a more comprehensive debt solution and for small island developing states to gain access to concessional finance, particularly through IMF.

Another key issue in the document relates to changing how assessments are made by credit rating agencies, which play a significant role in sovereign funding and addressing mounting indebtedness. Hanif says what’s needed is longer-term thinking in credit ratings, which could help decrease borrowing costs for lower-income countries. And ratings agencies now seem willing to engage, he says.

The Bretton Woods Project quotes Executive Director Eric LeCompte on Ukraine's debt. Read the full article here. 

Calls for Ukraine debt relief grow as IMF and World Bank provide fresh loans amidst crisis

Ukraine’s external debt stood at $56.7 billion at the end of 2020, according to the IMF. Jubilee USA executive director Eric LeCompte noted in a 8 March article in Barron’s magazine that Ukraine owed $22 billion to international finance institutions (IFIs), stating: “The IMF holds more than a half of that…debt at $13.4 billion with $2 billion in debt payments owed this year…. Since Ukraine will most likely default on these payments, the IMF should act quickly to restructure the payments.”

The Fund’s executive board subsequently approved a $1.4 billion loan to Ukraine on 9 March via its Rapid Financing Instrument, while the World Bank also released a $723 million financing package on 7 March, including $589 million in new loans. While this financing provides much needed emergency support, it increases Ukraine’s substantial debt load further.