Tax Agreement and Pandemic Debt Relief Move Forward

Washington DC – Ahead of IMF and G20 meetings, new debt relief measures move forward and 136 countries finalized an agreement on a minimum corporate tax.

"In the face of the pandemic, we are seeing progress on corporate and digital taxes,” said Eric LeCompte, the Executive Director of Jubilee USA Network. "Questions remain on whether or not we can agree on a high enough tax rate and to what degree developing countries will benefit."

.Members of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting signed the “Statement on the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalization of the Economy." The agreement updates and finalizes a reform of tax rules proposed in July.

As poor countries struggle with revenue to confront the coronavirus crisis, the IMF announced it will extend debt payment relief for 24 countries through January 10, 2022. Additional relief may be extended to April 13, 2022, if the IMF's Catastrophe Containment and Relief Trust has resources.

 

"Expanding debt relief for the poorest countries is urgently needed,” stated LeCompte, a United Nations finance expert who worked on the IMF's debt relief trust. "The cancelled debt payments mean that needed funds can be directed to pandemic response."

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Indonesian Newspaper Koran Jakarta Quotes Eric LeCompte on Global Vaccine Access

Indonesian Newspaper Koran Jakarta quoted Eric LeCompte in an article discussing the International Monetary Fund's global economic growth estimates. Read an excerpt below and the full article here.

IMF: Developing Countries' Recovery Will Take Years

By Fredrikus Wolgabrink Sabini

The International Monetary Fund (IMF) estimates that global economic growth in 2021 will be slightly lower than the previous forecast in July which was projected to grow 6 percent. The downward revision was due to debt and inflation risks as well as different economic trends after the Covid-19 pandemic.

IMF Managing Director, Kristalina Georgieva, in an online speech at Bocconi University, Italy, Tuesday (5/10), said the global economy was rebounding, but the recovery was limited due to the vaccination gap.

Meanwhile, Jubilee USA Network Executive Director, Eric LeCompte, said high debt, soaring food prices and a lack of vaccines are the biggest threats facing developing countries.

"We calculate the economic loss in the trillions if developing countries cannot access a vaccine," LeCompte said.

 

Read more here.

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Indonesian Newspaper Republika Quotes Eric LeCompte on Vaccine Access in Developing Countries

Indonesian Newspaper Republika quoted Eric LeCompte in an article discussing the International Monetary Fund's 2022 global economic growth projection. Read an excerpt below and the full article here.

IMF Cuts 2022 Global Economic Growth Projection

By Retno Wulandhari

The International Monetary Fund (IMF) estimates that global economic growth in 2021 will fall slightly below July's forecast of 6 percent. IMF head Kristalina Georgieva said the downgrade took into account the risks associated with debt, inflation and different economic trends after the Covid-19 pandemic.

Even as the global economy bounces back, according to Georgieva, the pandemic continues to limit recovery. One of the main obstacles is the high vaccination gap rate. This is due to limited access to vaccines.

Executive Director at Jubilee USA Network, Eric LeCompte, said high debt, soaring food prices and a lack of vaccines were the biggest threats facing developing countries. "We calculate the economic loss in the trillions if developing countries can't access a vaccine," Eric said.

 

Read more here.

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The East African Quotes Eric LeCompte on IMF Emergency Currency Allocation

The East African mentions Eric LeCompte on the civil society open letter to the IMF calling for more emergency currency allocations and redistribution of reserves from wealthy economies to developing ones. Read an excerpt below, and click here for the full story.

Uhuru: Debt relief and vaccines crucial for recovery of developing countries

By Aggrey Mutambo

President Uhuru Kenyatta on Tuesday reiterated his call for supportive debt relief and vaccine access for poor countries, arguing they will be the two most important areas to help the world beat back the Covid-19 pandemic.

The President had been calling for vaccine equity and debt relief in most of his recent speeches, a stance now adopted by the African Union. Developing countries argue that debt relief, emergency funding more trade and access to vaccines will protect them in spite of poor health care systems.The International Monetary Fund, for example, created an emergency fund, known as the Special Drawing Rights, to help countries fight the pandemic crisis.

But critics have argued the SDRs worth $650 billion, which are based on quotas of IMF members, have benefited developed countries more. Last week, more than 250 civil society activists and organisations wrote an open letter to the IMF, asking that the allocation be increased to $3 trillion and that “economies are in less need of SDRs given their access to a wider array of monetary and financial tools for the response and recovery.”

They argued that it was “essential that the recent allocation be quickly followed by rechanneling a significant portion of advanced economies’ SDRs to developing countries,” an idea IMF Managing Director Kristalina Georgieva has agreed could help. “Wealthy countries received more than $400 billion of the relief aid while developing countries received around $235 billion,” said Eric LeCompte, Executive Director of Jubilee USA, one of the NGOs that appended their signature on the open letter. “Wealthy countries can't use the special currency and should donate it to poor countries being ravaged by the pandemic.”

 

Read more here.

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Reuters Quotes Eric LeCompte on IMF Head Kristalina Georgieva's Curtain-Raiser Speech

Reuters mentions Eric LeCompte on IMF director Kristalina Georgieva's "curtain-raiser" speech at the IMF Civil Society Policy Forum. Read an excerpt below, and click here for the full story.

IMF trims 2021 GDP forecast, citing 'vaccine divide,' inflation

By Andrea Shalal

Inflation pressures, a key risk factor, were expected to subside in most countries in 2022 but would continue to affect some emerging and developing economies, she said, warning that a sustained increase in inflation expectations could cause a rapid rise in interest rates and tighter financial conditions.

"High debts, soaring food prices and lack of vaccines are the greatest threats facing developing countries," said Eric LeCompte, executive director of the religious development group Jubilee USA Network. "We are counting economic losses in the trillions if developing countries can't access vaccines."

Georgieva said central banks could generally avoid tightening for now, but they should be prepared to act quickly if the recovery strengthened faster than expected or risks of rising inflation materialized.

 

Read more here.

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Countries Struggling with High Debts, Food Prices and Vaccine Access, Says IMF

Jubilee USA Statement on IMF Head "Curtain-Raiser" Speech

Washington DC – Ahead of IMF and G20 meetings, IMF Managing Director Kristalina Georgieva delivered a "curtain-raiser" speech focused on debt, vaccines and pandemic response at Bocconi University.

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 Georgieva speech and upcoming meetings:

"High debts, soaring food prices and lack of vaccines are the greatest threats facing developing countries.

"Too many countries cannot combat the pandemic because they aren't bringing in enough revenue and are struggling to pay their debts.

"Georgieva is concerned about food prices. They've gone up by 30 percent. Vulnerable people are losing access to vaccines.

"Georgieva's speech highlights the growing concerns with developing countries not getting enough vaccines.

"We are counting economic losses in the trillions if developing countries can't access vaccines.

"Countries struggling with too much debt and lack of access to vaccines will come back to haunt all of us. All countries can face further economic shocks and new virus variants." 

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Pandora Papers Reveal Financial Secrecy that Drains Resources from Poor Countries

Washington DC – An investigation into more than 11 million private financial documents show hundreds of public officials in 90 nations using schemes to hide wealth offshore and avoid taxes. The International Consortium of Investigative Journalists released the Pandora Papers in partnership with the Washington Post and 600 journalists in 116 countries.

"The Pandora Papers provide a window into a secret world where the rich and famous can avoid paying taxes," noted Eric LeCompte, a United Nations finance expert and  Executive Director of the religious development group Jubilee USA. "Tax avoidance is part of the reason that too many countries lack the resources to fight the pandemic."

A trillion dollars leaves the developing world annually through crime, tax evasion and corruption. The leak shows how these monies increasingly land in accounts in the United States.

"Shell companies and tax havens enable corrupt politicians to steal resources from developing countries," stated LeCompte.

In January, Jubilee USA capped a decade of advocacy with the passage of the Corporate Transparency Act. The law requires the owners of US companies to disclose their true identities to the Treasury. In June, President Biden elevated the fight against corruption to a national security priority and mandated an inter-agency review to make recommendations.

“President Biden is on the right track as he pushes greater transparency in the global financial system,” shared LeCompte.

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IMF Urges Wealthy Countries to Send COVID Aid to Poor Countries

Washington DC – IMF Managing Director Kristalina Georgieva urged wealthy countries to donate IMF emergency COVID aid to developing countries. Her remarks opened an event organized by Jubilee USA Network in preparation for October IMF and G20 meetings.

“In August, the IMF created a type of emergency currency called Special Drawing Rights to help countries fight the COVID economic and health crises,” said Jubilee USA Executive Director Eric LeCompte. "Wealthy countries received more than $400 billion of the relief aid while developing countries received around $235 billion. Wealthy countries can't use the special currency and should donate it to poor countries being ravaged by the pandemic."

The IMF's Strategy, Policy and Review Department Director Ceyla Pazarbasioglu, former finance officials and development groups spoke at the event.

“Developing countries can use the emergency aid for healthcare, social programs and protecting the environment,” added LeCompte. 

In a letter sent to the G20 organized by Jubilee USA Network and Latindadd, 250 organizations propose guidelines for wealthy countries to donate their Special Drawing Rights to developing countries.

Read Jubilee USA's press release on the G20/IMF letter here.

Read the IMF/G20 letter here.

Read Jubilee USA's press release on the creation of Special Drawing Rights here.

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Wealthy Countries Must Share Pandemic Relief Aid, Organizations Say

Letter to G20 and IMF Outlines Principles for Sharing Special Drawing Rights

Washington DC – In a letter to finance ministers, 250 organizations call on wealthy countries to donate IMF emergency currency they don't need to poor countries. In August, the IMF created $650 billion in Special Drawing Rights (SDRs) to support global coronavirus response. More than $400 billion went to wealthy countries and $230 billion went to developing countries.

“Wealthy countries recovering from the pandemic don't need the currency, while poor countries need the aid for vaccinations and the growing amount of people living in poverty,” said Aldo Caliari, one of the letter’s organizers and Senior Director of Policy for religious development organization Jubilee USA Network.

Letter signers said SDR sharing should provide debt-free and unconditional aid. The 250 groups raised concerns about the needs of middle-income developing countries.

“The pandemic revealed all developing countries, no matter their income, are vulnerable,” stated United Nations finance expert and Jubilee USA Executive Director Eric LeCompte. "The worst job losses and poverty increases during this crisis are taking place in developing middle-income countries, which are most of the world's countries," continued LeCompte. "The IMF and G20 need to support more options to get Special Drawing Rights to help these countries."

The letter states SDRs can finance health, education and efforts to protect the environment.

On October 1, Jubilee USA sponsors an event featuring IMF, UN and developing country speakers to discuss pandemic vulnerabilities in middle-income developing countries. On October 4, letter signers present their asks during an event with IMF Managing Director Kristalina Georgieva and Director of the IMF Strategy Policy and Review Department, Ceyla Pazarbasioglu.

Read the CSO letter here.

Watch the Civil Society Policy Forum event "Mapping Pandemic Vulnerabilities in Developing Countries" here.

Watch the Civil Society Policy Forum event "Making the Most of Special Drawing Rights: Approaches to Maximize Impact and Create a Sustainable and Just Recovery" here.

Read Jubilee USA's press release on the creation of Special Drawing Rights here.

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Presbyterian News Service covers Jubilee Weekend

Presbyterian News Service covered the upcoming Jubilee Weekend and the opportunities it presents. Read an excerpt below and the full article here.

Jubilee Weekend is an opportunity for advocacy Oct. 15-17

By Darla Carter

Presbyterians are being encouraged to support a weekend of advocacy by the Jubilee USA Network, a partner of the Presbyterian Church (U.S.A.) that promotes debt relief for poor countries and an equitable distribution of vaccines.

“A COVID Response that Shares Medicine, Ends Poverty and Protects Our Planet” is the theme of this year’s Jubilee Weekend, which will be Oct. 15-17.

“Jubilee Weekend takes place each year, the same weekend as the IMF (International Monetary Fund) and World Bank meetings. It’s also right before the G20, a forum of nations with the world’s largest economies," said Stefanie Ostfeld, managing director of the Jubilee USA Network. “At these meetings, world leaders are going to be making important decisions on many COVID-19 efforts, including debt relief, pandemic recovery and equitable vaccine access, so participating in Jubilee Weekend is an opportunity for religious groups to make their voices heard, demonstrating to decision makers these issues are a priority, they matter, and really, calling on them to act on behalf of the vulnerable.”

Anyone interested in participating can sign up on the network’s website to receive a packet of information about ways to get engaged, from holding worship services to calling members of Congress

“You could offer one prayer for vaccine distribution or increased aid for developing countries,” Ostfeld said. “A congregation could dedicate a worship service to poverty reduction or debt relief. You can also sign and circulate a petition to policymakers. You could hold a discussion group on these issues.”

Jubilee USA is a coalition of religious, development and advocacy groups that says it has won more than $130 billion in debt relief for the world’s poorest economies.

“We mobilize our members to take action to help build an economy that serves, protects and promotes participation of the most vulnerable,” Ostfeld said.

Read more here.

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Eric LeCompte mentioned by NPR & WITF on Biden's COVID-19 summit

Eric LeCompte was mention by NPR in a story covering President Biden's COVID-19 summit and rich nations' role in mitigating vaccine inequity. Listen to the full story and read the accompanying article here.   

The U.S. is donating more COVID vaccines and wants other rich nations to pitch in

By Tamara Keith/NPR

Biden defended the U.S. response, saying his first responsibility was to make sure Americans were protected, and arguing that the U.S. donations have been generous. “For every one shot we’ve administered to date in America, we have now committed to do three shots to the rest of the world,” Biden said.

The new tranche of Pfizer doses will be manufactured in U.S. plants and will be bought at a “not-for-profit” price, the officials said. Most U.S. vaccine shipments — 800 million doses — will ship between January and September 2022.

Read more here.

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