The IMF extends debt payment relief for 25 countries through April 2022. The IMF's Catastrophe Containment and Relief Trust (CCRT) was activated early in the pandemic to provide debt relief and aid for the world's poorest countries. In all, 29 countries received nearly one billion dollars in relief.
“Debt relief remains a critical part of the global pandemic response,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. “Debt relief has helped countries respond to the health and economic crises. More debt relief will be needed for many developing countries.”
The IMF CCRT debt relief process was initially used for disaster-hit Haiti and then three African countries responding to Ebola. As the CCRT provided debt relief since the dawn of the pandemic, after the next phase of relief - CCRT resources will be depleted to $95 million.
“More commitments and donations are essential to provide debt relief for developing countries struggling with the pandemic,” added LeCompte.
Read the IMF release on the CCRT extension here.
A World Bank fund that aids the poorest countries will receive $93 billion over the next three years. The International Development Association (IDA) announcement came Wednesday at the end of a two-day donor pledging meeting in Tokyo.
“As poor countries struggle with the pandemic and high levels of debt, they need more support,” said Eric LeCompte, the Executive Director of the religious development organization Jubilee USA Network. "Religious groups pushed world leaders to increase humanitarian aid for developing countries struggling with the pandemic."
The US Conference of Catholic Bishops and Jubilee USA Network wrote a joint letter to President Biden in February urging additional funds for IDA and other development lenders to respond to increased COVID-spurred needs.
“The committed donations are important as these countries need to spend more on social needs and climate challenges," stated Jubilee USA's Aldo Caliari, the group's Senior Director of Policy.
IDA normally receives new funds every three years. The IDA replenishment is the 20th in its history and was originally scheduled for 2023 but rapid depletion of the previous one due to the COVID crisis, prompted donors to advance new funding by one year. The new IDA commitments were 13% higher than the previous replenishment. The Tokyo meeting was the last of four donor meetings to negotiate contributions.
“More money for IDA is good news,” added LeCompte. "As we continue to confront the global health and economic crises, developing countries will also need debt relief and other sources of aid."
Major US churches and international religious groups also signed a letter that Jubilee USA coordinated to the White House, G20 and IMF calling for additional aid to confront the pandemic. The nearly 300 signers included the Union for Reform Judaism, the Unitarian Universalist Association and the Episcopal, Evangelical Lutheran, Presbyterian, Methodist and United Church of Christ Churches.
Read Jubilee USA and the US Conference of Catholic Bishops joint letter to the White House here.
Read Jubilee USA's COVID response letter calling for additional aid and development bank support with nearly 300 signatories here.
On Wednesday, a high-level panel explores the role of IMF emergency currency or Special Drawing Rights in pandemic recovery. The event, Special Drawing Rights and Global Pandemic Recovery, is convened by Jubilee USA Network and features Ambassador Sam Brownback, former US Senator and US Ambassador at Large for International Religious Freedom, Africa Union Ambassador Hilda Suka-Mafudze and President of Bread for the World, Reverend Eugene Cho.
“We need to do more to address the health and economic crises spurred by the coronavirus," shared Jubilee USA Executive Director Eric LeCompte. LeCompte will introduce and moderate the panel. “The event focuses on a type of aid that countries can use for pandemic recovery.”
In August, the IMF issued $650 billion in Special Drawing Rights (SDRs) or emergency currency for countries to address the coronavirus crises. More than $400 billion of the aid went to wealthy economies, with the US receiving $113 billion. Wealthy countries can transfer their unused SDRs to countries in need.
“Already this aid is making a difference for countries responding to the crisis,” added LeCompte. "Wealthy countries can share the SDRs they won't use with developing countries."
The IMF accepts SDRs from countries to finance zero-interest loans for the poorest countries. Another IMF vehicle under development will accept SDR contributions to assist developing small states and vulnerable middle-income countries. Recent research released by Jubilee USA Network and LATINDADD determined the emergency currency can help overcome pandemic-related weaknesses in 24 Latin America/Caribbean countries.
To receive a link to ask questions and virtually attend, "Special Drawing Rights and Global Pandemic Recovery,"register here. Alternatively, you can join through Facebook Live: https://www.facebook.com/jubileeusa/
Read about Jubilee USA's research on SDRs and pandemic challenges facing Latin and Caribbean countries here.
Climate Home News quoted Aldo Caliari on China's recent commitment to donate a quarter of its IMF pandemic recovery funds, known as Special Drawing Rights, to African countries. Read an excerpt below or read the full article here.
China ‘trumps’ the west by pledging larger share of IMF relief to African nations
In his opening speech to the Forum on China-Africa Cooperation (Focac) in Senegal, president Xi Jinping pledged to donate 600 billion doses of Covid-19 vaccines and redistribute $10 billion worth of rare IMF reserve assets, known as special drawing rights (SDRs), to African countries. China’s allocation of 29bn SDRs is worth about $40bn.
“It puts pressure on western donors. It will be difficult for advanced economies to justify that they are not in a position to contribute that share when China is able to do it,” Aldo Caliari, of the Jubilee USA Network, an NGO which advocates for debt relief, told Climate Home News.
The IMF injected $650bn of SDRs into the global economy in August to help countries recover from Covid-19 by buying vaccines, alleviating debt and investing in sustainable development.
Read more here.
Meeting Agenda Had Included Vaccine Access for Developing Countries
The World Trade Organization postponed a meeting where trade ministers planned to decide on vaccine access and production issues for developing countries. The meeting, scheduled for Geneva, Switzerland, was canceled because of new travel restrictions due to the COVID Omicron variant. Waiving pharmaceutical company patents on COVID vaccines and treatments featured prominently on the agenda.
“The World Trade Organization can help ensure that everyone around the world can access coronavirus vaccines and treatments," said Eric LeCompte, the Executive Director of the religious development organization Jubilee USA Network. "In spite of the lack of an in-person ministers meeting, the WTO can still take action on waiving vaccine patents."
The highest WTO decision-making body in between ministerial meetings is the General Council.
The IMF estimated that failure to achieve a 70% vaccination rate globally by mid-2022 will result in more than $5 trillion in global economic losses over the next five years. While vaccination rates in high-income countries approach 70% of the population, less than 5% of people in low-income countries received even one dose, according to a group of World Health Organization experts.
"Distributing vaccines is essential to stop food shortages and prevent economic shocks," stated LeCompte.
In the summer, Jubilee USA organized leaders of the Catholic, Methodist, Episcopal, Lutheran, Presbyterian and United Church of Christ Churches and AFL-CIO to meet US Trade Representative Ambassador Katherine Tai on the vaccine and trade proposals. Tai supports temporarily waiving COVID vaccine patents.
Call the Capitol Switchboard at 202-224-3121 and ask for your Senators. You will need to call twice to reach each of your US Senators. The switchboard is open 24 hours a day and 7 days a week to leave a message for your Senator.
If you need help finding your Senators, you can ask the Capitol Switchboard attendant by telling them in what state you reside or use this link.
Once you are connected, ask to leave a time-sensitive message for your Senator.
"Thank you for taking my call. I live in your state, my name and address is______________. The Build Back Better Act contains provisions that will help Puerto Rico recover from debt crisis, natural disasters and tackle a nearly 60% child poverty rate. I want the Senator to promote recovery and opportunity for the people of the island by:
1.) Supporting Supplemental Security Income payments that could benefit more than 300,000 low-income people;
2.) Support child tax credits and fully fund a permanent expansion of the healthcare Medicaid program;
3.) Passing measures to increase manufacturing jobs in Puerto Rico."
The National Catholic Reporter praised Jubilee USA's work in support of more social services funding for Puerto Rico. Read an excerpt below and find the full article here.
Links: The Rittenhouse verdict; Catholic Worker reaction to Archbishop Gomez; Bosnia on the verge of breakup
Our friends at Jubilee USA are not exactly unsung heroes: Many people know of their good work. But the special interest they have shown for the suffering of the people of Puerto Rico, combined with both their expertise about fiscal issues and their deep commitment to Catholic social doctrine, has made the organization a real hero to the island's people. This press release, with links to their letter to members of Congress, looks at the provisions of the Build Back Better bill, which will help alleviate the poverty in Puerto Rico.
Read the full article here.
The House of Representatives voted to increase Medicaid funding and incentives to support manufacturing jobs in Puerto Rico as part of the Build Back Better Act.
“This legislation means that Puerto Rico can access more resources that the island desperately needs,” said Eric LeCompte, Executive Director of Jubilee USA Network, which worked on debt and disaster relief for the island since 2015. "Faced with high poverty rates, debt crisis and natural disasters, Puerto Rico can really use the aid."
The Build Back Better Act provides Supplemental Security Income disability payments to Puerto Rico, benefiting 300,000 Puerto Rico residents. The bill includes the territory in child tax relief increases for the states. The legislation now heads to the Senate and if passed could be enacted into law this year.
In February, 20 major religious leaders representing Catholic, Methodist, Lutheran, United Church of Christ and Evangelical Churches wrote to President Biden to support Puerto Rico. Leaders of the National and Puerto Rico Council of Churches, Catholic Charities and the General Bible Society also signed the letter to Biden.
Read the Jubilee USA Puerto Rico and US Religious Leaders Letter to President Biden here.
Read the Puerto Rico Religious Leader Stimulus Letter to Congress here.
Two hundred countries finalized an agreement during COP26 in Glasgow, Scotland to limit global warming. In 2009, developed countries promised $100 billion of annual climate funding to developing countries by 2020. According to the OECD, funding estimates will not be met before 2023. The agreement expresses regret about the missed finance target and calls for increasing support for developing countries.
“The climate summit agreement recognizes the urgency of reaching the $100 billion target for developing countries and the reality that more support is needed,” said Eric LeCompte, Executive Director of the religious development organization Jubilee USA Network. "Debt relief can be an important resource for us to reach the levels of support developing countries need."
The Glasgow outcome noted concern with heightened debts as developing countries respond to the COVID crisis. The agreement asks development banks and lenders to consider climate vulnerabilities in determining access to aid and global reserve funds known as Special Drawing Rights.
One provision advocated by developing countries failed to make it in the final COP26 agreement. An agreement failed on compensation for developing countries experiencing damage from extreme climate-driven weather events. Instead the summit outcome foresees a new body to offer technical assistance for developing countries combating the effects of climate change.
“Many developing countries are dealing with more frequent natural disasters," stated LeCompte. "We need processes to support vulnerable countries as they face more extreme weather events caused by climate change."
The deal proposes setting a new climate finance and aid goal by 2025. Some countries believe more than a trillion dollars is needed.
Read Jubilee USA's press release on climate funding and COP26 here.
Read Jubilee's new research on climate risks and COP26 here.
As the climate summit approaches its final days in Scotland, 200 countries negotiate an agreement to combat climate change. A key outstanding item is enacting the 2015 Paris agreement pledge to provide $100 billion to developing countries annually to deal with climate challenges. The OECD forecast that the financing pledge won't be met until 2023.
“Developing countries are dealing with a range of climate driven challenges from natural disasters to food shortages,” said Eric LeCompte, Executive Director of the religious development organization Jubilee USA Network. “We can't wait years for developing countries to get funding to combat the climate crisis. The crisis is now.”
During COP26, Jubilee USA pushed world leaders to consider debt relief and using IMF emergency currency, or Special Drawing Rights, to fund the climate financing targets.
“World leaders should be looking at a range of ways to support funding for developing countries to deal with the climate crisis,” noted LeCompte.
China and the US released a declaration pledging cooperation for a successful conference outcome and recognizing the importance of the $100 billion commitment.