Global Economic Losses Since Dawn of Pandemic Hit $3.3 Trillion

The Financial Times features Aldo Caliari's letter in response to Leland Goss' letter "Flaws in New York State’s well-intended debt plan." Read an excerpt below, or the full article here.

Letter: No surprise unions back New York State’s debt plan

By Aldo Caliari

Leland Goss (“Flaws in New York State’s well-intended debt plan”, Letters, March 13) mischaracterises important aspects of the proposed New York State legislation.

The reference to “equitable burden-sharing” is part of a definition that actually, read in full, simply refers to the rules set by international debt relief initiatives. The bill does not create any new standard, but incorporates what is state of the art in the international community’s approach to resolving debt crises, and is crafted to dynamically capture its expected evolution. This includes any shaping of the standards to emerge from the G20-led Global Sovereign Debt Roundtable, and other attempts at building consensus among creditors and sovereign borrowers.

The protection the bill provides to debtors faced with a lawsuit will disincentivise rather than lead to more litigation, thus encourage engagement of all private creditors in negotiations.

Read more here.

Reuters and Yahoo Finance quote Eric LeCompte on the benefit of the U.S. loaning $21 billion to the International Monetary Fund (IMF)’s Poverty Reduction and Growth Trust (PRGT). Read an excerpt below or the full article here.

Treasury's Yellen says funding bill allows lending of $21 bln to IMF trust

The Financial Times quotes Eric LeCompte on the benefits of the Sovereign Debt Stability Act (S5542/A2970) and the costs of its absence. Read an excerpt below, or the full article here.

New York moves to rewrite law on sovereign debt default recovery

By Kate Duguid and Joseph Cotterill

"This gives countries an option in how they want to exit debt crises," said Eric LeCompte, the head of Jubilee USA, a non-profit that campaigns for debt relief for poor countries. 

"We don't want our tax dollars bailing out the private sector. We also want to prevent behavior among creditors that's harmful. And we want to promote and protect legitimate creditors," said LeCompte.

But critics said regardless of intention, the new bill would in practice raise borrowing costs for the neediest countries. With more uncertainty and less recovery possible, creditors would charge riskier countries far higher premiums on debt.

Read more here.

Bloomberg quotes Eric LeCompte on the Sovereign Debt Stability Act (S5542/A2970) and the necessity for this merged legislation. Read an excerpt below or the full article here.

New York Politicians Renew Push to Solve Sovereign Debt Crises

By Zijia Song and Nicolle Yapur

“The merged legislation is critical as it gives countries options to get out of debt crisis and restructure debts back to profitability for investors,” said Eric LeCompte, executive director at Jubilee USA Network, a nonprofit group that advocates for debt relief for smaller economies.

On Wall Street, though, the amended bill stands to cause further angst. Major investors including Pacific Investment Management Co. and Fidelity Investments last year pushed back against similar efforts, warning that new rules could result in higher borrowing costs for emerging-market governments — and potentially cripple the sovereign bond market.

Such “top-down, unilateral” solutions to sovereign debt restructuring often stoke uncertainty in markets, resulting in high borrowing costs for vulnerable economies, said Sonja Gibbs, managing director and head of sustainable finance at the Institute of International Finance.

Read more here.

The Justice, Peace and Development Commission of the Catholic Symposium of Episcopal Conferences of Africa and Madagascar (SECAM) issued a statement calling for effective debt relief, a significant increase in the flow of resources for development and strengthened governance frameworks as the 56th Conference of African Ministers Meetings commence in Victoria Falls, Zimbabwe. 

Read the statement here.

Read the press release on the statement here.

CLICK HERE TO REGISTER.

The Brazilian Presidency of the G20 hosts finance ministers for their first G20 meeting this year. Brazil’s vow to make the reduction of poverty and hunger priorities this year takes place amidst the world’s worst growth projections in the last three decades, spreading armed conflicts and rising debt payments.

“Debt payments in developing countries are equal to what many of these countries spend on health, education, social programs and climate issues combined” said Eric LeCompte, Executive Director of Jubilee USA Network. “Giving developing countries effective tools to cut their debt is essential for progress on any of the priorities the G20 sets for this year.”

The World Bank forecasts that debt payments will rise 10% in 2023-2024 compared to the previous two years. A G20 debt reduction initiative began in 2020, the Common Framework, has only attracted four applicants, three of which remain stuck without an exit to their debt crises.

Brazil continues the G20 efforts to increase the capacity and to reform development banks.

“The G20 needs to track how development banks meet new challenges and growing demands,” noted LeCompte.

Brazil also announced plans to advance the group’s cooperation on halting climate change and aligning financial actions with the objectives of the Paris Climate Agreement.

“The G20 can build consensus on meeting the climate funding goals that the UN climate conference needs to finalize by the end of this year," shared LeCompte.

This year’s UN climate conference, COP29, is the deadline for agreeing on a new climate finance goal starting in 2025. G20 leaders agreed last year that $100 billion a year is the floor for any new climate finance commitments.

“We worry that too many of the increased climate resources may come in the form of loans that add to high debt burdens.”

In last year's October G20 gathering the group avoided commenting on the conflict in Israel and Gaza.

"There are strong tensions among G20 leaders around the conflicts and humanitarian crises taking place in Ukraine and Gaza and Israel."

Reuters and Yahoo News quote Eric LeCompte on the Global Sovereign Debt Roundtable. Read an excerpt below, or the full article here.

Focus on timelines, predictability at next sovereign debt roundtable, IMF chief says

By Andrea Shalal

Debt and War Present Major Global Economic Challenges According to IMF

America Magazine quotes Eric LeCompte on the current global economic system's inability to eradicate poverty. Read an excerpt below, or the full article here. 

The Weekly Dispatch: Wisdom from Pope Francis for the billionaires meeting in Davos

By Kevin Clarke

Eric LeCompte is the executive director of Jubilee USA Network, a coalition of religious, development and advocacy groups focused on debt relief for the world’s poorest economies. He believes “from a Catholic point of view,” there is good reason to look askance at some of the “false promises” coming out of Davos, including “the idea that artificial intelligence, better technology and the economic system as it is can deal with global poverty, deal with inequality, create the jobs we need as well as protecting our planet.”

“These are messages that the church has been skeptical about,” he says, “knowing that throughout human history, unless we have an ethical economy, no matter what technology we have or what new systems or new businesses we have, we’re not going to create the world that is…promised, where we all have enough.”

Davos is an experience, Mr. LeCompte says, where important ideas are discussed, business relationships secured and deals made, but in the end not much is practically achieved in terms of addressing global poverty and inequity. Its relevance has been even more diminished, he believes, since the arrival of tech giants on the Davos scene, who use the conference to showcase their digital wares and vision. To many it is merely “the best party in Europe.”

Read more here.