A newly introduced bill in New York State aims to help resolve debt and economic crises that developing countries face in the wake of the pandemic.

"Most of the world's private debt is contracted and arbitrated under New York State law," noted Eric LeCompte, the Executive Director of the religious development coalition, Jubilee USA Network. LeCompte serves on United Nations debt working groups. "As most countries face terrible economic and debt crises due to the pandemic and the Ukraine war, decisions made in New York will impact how developing countries can resolve their debt crises."

Under the New York Taxpayer and International Debt Crises Protection Act, private creditors would participate in debt relief initiatives at the same level as the US government, other governments and other creditors. State Assemblymember Patricia Fahy sponsors the legislation introduced on Thursday.

The supporters of the legislation point out that the bill will benefit New York residents too.

“The bill addresses debt crises in developing countries, protects US taxpayers and helps limit economic and supply shocks,” said LeCompte whose organization has won more than $130 billion in debt relief initiatives for poor countries.

The pandemic accelerated economic crises in developing countries, which saw debt rise in 2020 by five times the average increase of previous years. The US led the G20 to create a process that allows up to 73 of the world’s poorest countries to obtain debt relief from all creditors. Currently, Chad, Ethiopia and Zambia have requested relief from the G20 Common framework process. The newly-introduced bill requires that all private creditors who fall under New York State law participate in the G20 and other international relief processes.

“Debt relief is longstanding US policy with bipartisan support,” added LeCompte. “Facing the pandemic in developing countries and ensuring long-term financial stability requires that all creditors support debt relief."