IMF Warns of Global Financial Crisis Risk

Washington DC - For the second day in a row, the International Monetary Fund raised concerns of pending financial crisis. Ahead of the Spring IMF and World Bank meetings, the IMF released the Global Financial Stability Report, warning of "vulnerabilities" in corporate debt, house values and sovereign (country) debt.

"We are seeing some of same conditions that created the 2008 financial crisis and the IMF worries that we are not doing enough to prevent the next financial crisis," stated Jubilee USA Executive Director Eric LeCompte who monitors IMF reports. "When we review the IMF's analysis, they are looking directly at causes of the 2008 financial crisis, including house values, corporate and country debt and risky financial behavior."

On Tuesday, the IMF released the biannual World Economic Outlook Report noting a global growth slowdown and raising concerns about unsustainable debt, trade tensions and the impact of natural disasters on the financial system. The IMF expressed heightened concerns of looming debt crises and possible financial crisis. 

On the heels of the IMF report releases, the IMF and development groups organized a high-level event at the meetings,"Tackling the Next Wave of Sovereign Debt Crises." On Wednesday, world leaders, finance ministers, business leaders, journalists and development groups attend the event at IMF Headquarters. 

"In order to prevent financial crisis, we need stronger international and national policies to deal with debt problems, stop risky financial behavior and promote tax and transparency policies that can raise revenue," said LeCompte, one of the organizers of the debt event.

The speakers at the high-level forum include Benin's Finance Minister Romuald Wadagni, the IMF's David Lipton, The Guardian's Larry Elliot, the director of AFRODAD - Fanwell Bokosi and legal experts Lee Buccheit and Odette Lienau. Jubilee USA Network, AFRODAD, Oxfam, Latindadd, Eurodad, Jubilee Debt Campaign (UK), Jubilee Germany and the IMF sponsored the event. In addition to the high-level debt panel, Jubilee USA is also organizing events this week on Somalia, transparency policies and country debt case studies.

Read the April 2019 Global Financial Sustainability Report 

Read Jubilee USA release on the April 2019 World Economic Outlook

Read more about the IMF Main Event "Tackling the Next Wave of Sovereign Debt Crises"

Read about Jubilee USA's Panel "Dealing with Sovereign Debt Distress: Case Studies, Causes and Solutions"

Read about Jubilee USA's upcoming "High-Level Forum on Debt Cancellation for Somalia"

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IMF Worries: Debt, Trade, Economy

Washington DC - As world leaders, finance ministers, business leaders and development groups gather for the Spring International Monetary Fund and World Bank meetings, the IMF raises fresh concerns about the global economy. The IMF releases the biannual World Economic Outlook Report noting a slowdown in global growth and focusing on economic challenges that include unsustainable debt, trade tensions and the impact of natural disasters on the financial system.

"For several years now, the IMF continues to raise concerns over possible financial crisis and economic stability," noted Jubilee USA Executive Director Eric LeCompte, who tracked IMF meetings and reports for the last 10 years. "While the IMF downplays the possibility of a recession, the IMF analysis argues we could see another recession if we don't address risky behavior, trade tensions and debt concerns."

The IMF report forecasts a downturn in 2019 economic growth from 3.6 percent to 3.3 percent. With heightened concerns of looming debt crises, the IMF joined Jubilee USA and other debt watchdogs to host a major high-level event for meeting attendees on Wednesday, "Tackling the Next Wave of Sovereign Debt Crises." On Friday, Jubilee USA moderates a discussion of Latin American and African groups releasing new reports on debt, "Dealing with Sovereign Debt Distress: Case Studies, Causes and Solutions."

"If we are going to prevent the next financial crisis, we need stronger international and national policies to deal with debt problems, stop risky financial behavior and promote tax and transparency policies that can raise revenue," stated LeCompte.   

Read the April 2019 World Economic Outlook

Read more about the IMF Main Event "Tackling the Next Wave of Sovereign Debt Crises"

Read about Jubilee USA's Panel "Dealing with Sovereign Debt Distress: Case Studies, Causes and Solutions"

 

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Jubilee USA April 6th - April 18th Event Schedule 2019

Puerto Rico, Somalia and the World's Poor Hunger for Jubilee: Debt, Transparency, Trade and Disaster Economics

 
Ecumenical Advocacy Days
 
April 6, 2019, 2:00 pm - 3:30 pm
Commonwealth Room
Doubletree by Hilton Hotel Washington, D.C. – Crystal City
300 Army-Navy Dr.
Arlington, VA 22202-2891
 
Moderator: 
Eric LeCompte, Executive Director, Jubilee USA Network 
 
Panelists: 
Aniedi Okure, OP, Executive Director, Africa Faith and Justice Network
Zaina Kisongoa, Somalia Country Representative, American Friends Service Committee
Fran Quigley, Coordinator, Faith in Healthcare–Indiana University McKinney School of Law
 
The panel will discuss how vulnerable people around the world struggle because of global economic policies. Panelists will share specific Jubilee campaign actions on Africa debt, winning disaster and debt relief for Puerto Rico and Somalia, curbing tax evasion and corruption and ensuring vulnerable communities can access medicine in trade agreements.
 
Sponsors: Jubilee USA Network
 
 
 
IMF/World Bank Spring Meetings
Wednesday, April 10, 2019,
3:00pm - 4:00pm
IMF Headquarters 1 - Meeting Hall A&B
 
Moderator: 
 Mr. Larry Elliott, Economics Editor, The Guardian
 
Panelists: 
Mr. David Lipton, First Deputy Managing Director, IMF
Mr. Fanwell Kenala Bokosi, Executive Director, African Forum and Network on Debt and Development (AFRODAD)
Mr. Lee Buccheit, Legal Expert
Ms. Odette Lienau, Professor of Law, Cornell University and Yale University
H.E. Romuald Wadagni, Minister of Finance of Benin
 
Debt is at record levels in advanced economies and emerging markets. 40 percent of low income countries are wrestling with debt distress or high-risk debt levels. If measures are not put in place to reduce risk, a new and broad-based wave of debt crises could emerge as a major threat for the 2030 development agenda. In a few countries, a debt crisis has already materialized. Can the current international financial architecture provide prevention and resolution of debt and financial crises? Or does it need to be reformed?
 
Sponsors: The International Monetary Fund, Jubilee USA Network, AFRODAD, Jubilee Germany, Jubilee Debt Campaign UK, Eurodad, Latindadd, Oxfam
To attend these events, individuals must be credentialed for the IMF/WB Spring Meetings.
  
 
April 11, 2019,
10:30 am - 12:00 pm
Georgetown Law
600 New Jersey Avenue, NW
Washington, DC 20001
 
Chair: 
Eric LeCompte, Jubilee USA Network 
 
Panelists: 
Barry Herman, The New School, presenting “Protecting Social Protections during Debt Crises”
Maria Ifeoluwa Oluyeju, Tulane University, presenting “Normative Framework for Cross-Jurisdictional Regulation of Distressed Debt Hedge Funds for Efficient Secondary Sovereign Debt Markets”
Arturo Porzecanski, American University, presenting “Human Rights and Sovereign Debts in the Context of Property and Creditor Rights”
Dania Thomas, University of Glasgow, “Delineating an Implied Good Faith Duty to Negotiate in Sovereign Debt Contracts, Workouts, and Party Expectations”
 
April 12, 2019, 7:30 am - 9:00 am
U.S. Institute of Peace, Bush Building
2301 Constitution Avenue, NW Washington DC 20037
 
Moderator: 
Eric LeCompte, Executive Director, Jubilee USA Network 
Panelists: 
H.E. Dr. Abdirahman D. Beileh, Minister of Finance, Federal Republic of Somalia
Nnenna Nwabufo, Deputy Director General, African Development Bank East Africa Regional Development and Business Delivery Office
Helima Adan, Deputy Director for Save Somali Women and Children (SSWC), Somalia and Somalia NGO Consortium, Somalia NGO Consortium
The American Friends Service Committee and the Somalia NGO Consortium, in collaboration with Jubilee USA Network and Somalia Working Group, will host a high-level forum on debt cancellation for Somalia. The forum will bring together key stakeholders to discuss  the impact of external debt burdens on social and economic development and the need for the international community to support Somalia’s agenda for debt cancellation. H.E. Dr. Abdirahman D. Beileh, Minister of Finance, Federal Republic of Somalia will provide a keynote address highlighting achievements made thus far and reiterate his government’s commitment to meeting conditions for debt cancellation.
Sponsors: American Friends Service Committee, the Somalia NGO Consortium, Somalia Working Group, Jubilee USA Network and African Faith and Justice Network 
Please RSVP to Faye Lee at coord@jubileeusa.org
IMF/World Bank Annual Spring Meetings
 
Friday April 12, 2019,
2:00 pm - 3:30 pm
 
Building I2 Room 250
 
Moderator: 
Eric LeCompte, Jubilee USA Network 
Panelists: 
Fanwell Kenala Bokosi, AFRODAD  
Mark Flanagan, IMF Debt Policy Division
Patricia Miranda, Latindadd
Sponsors: Jubilee USA Network, AFRODAD, Latindadd, Brot für die Welt
 
New debt case studies and analysis for Latin America, Africa and the Caribbean will be presented during this panel. Debt and finance experts will discuss current debt crises and debt distress facing countries. Causes, prevention measures and solutions will be debated. In light of new debt reports, this panel will review policies including: debt restructuring, debt sustainability, tax and transparency, trade agreements and responsible borrowing and lending.
From April 15th - 18th Jubilee USA will be participating in and cosponsoring 5 events on tax, trade, debt and transparency at the United Nations Financing for Development Forum in New York. To attend these events, individuals must be registered for the UN Financing for Development Meetings. 
Find more information about the UN Economic and Social Council Financing for Development Forum here
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Eric LeCompte Cited in MarketWatch on the IMF

Eric LeCompte, Executive Director of Jubilee USA, was cited in MarketWatch on the global economy and IMF Managing Director Lagarde's recent address. Read an excerpt below and follow this link to the full article.

IMF’s Lagarde: Global economy has lost momentum but will likely avoid recession

Eric LeCompte, executive director of Jubilee USA, said he thought the undercurrent of Lagarde’s speech was “heightening concern for economic stability and growth.”

In her speech, Largarde warned again that there would be no winners in a trade war between the U.S. and China.

Read more here.

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Senate Disaster Funding Fails Over Puerto Rico Aid Debate

Washington, DC - On Monday the Senate failed to pass disaster relief funding to benefit Americans impacted by wildfires, hurricanes, flooding and other natural disasters. Republicans and Democrats clashed over recovery aid amounts for Puerto Rico and two separate proposals could not muster enough votes for passage.

"The Senate must work together and pass a disaster relief package that ensures Americans from Iowa to Puerto Rico get the recovery aid they need," stated Eric LeCompte the Executive Director of Jubilee USA, a religious development group. "Because of the Senate's inability to take action, over a million vulnerable people in Puerto Rico lost food assistance benefits last month. The Senate must move forward a disaster relief package immediately."

As Puerto Rico disaster aid continues to be debated, additional relief monies are on hold for Americans suffering from disasters in Nebraska, Iowa, North Carolina, Florida and Georgia

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IMF Head Addresses US Chamber on Global Economy Risks

Washington DC - Ahead of the Spring International Monetary Fund and World Bank meetings, the head of the IMF, Christine Lagarde delivered a speech to the US Chamber of Commerce, "A Delicate Moment for the Global Economy: Three Priority Areas for Action."

Eric LeCompte the Executive Director of Jubilee USA, a religious development organization, releases the following statement on Lagarde's speech:

"As world leaders prepare for the Spring IMF meetings, Lagarde is raising concerns about the state of the global economy.

"Lagarde calls for tackling unsustainable debt, corporate tax avoidance and global corruption. She acknowledges that when trade deals are done wrong, it can hurt workers and the poor.

"When we look at Lagarde's speech in light of IMF reports from the last year on growing risks facing the global economy, the IMF is heightening concern for economic stability and growth."

Read the full speech here: https://www.imf.org/en/News/Articles/2019/03/29/sp040219-a-delicate-moment-for-the-global-economy

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Breaking: Senate Puerto Rico Vote

Friends, 

Because of your calls to the Senate and the tens of thousands of messages we got to Congress on Puerto Rico disaster and debt relief, the Senate agreed to vote on our proposed legislation next week. As early as Monday, the Senate could pass our 3 month campaign to fund $600 million for Puerto Rico disaster "food stamps" for more than a million people in Puerto Rico.

We need you to take action now.

Your calls are working. We need to move Congress to pass this vital food and disaster assistance now. Call your Senators now and tell them to pass disaster relief for Puerto Rico.

Already, we won $50 billion in disaster relief and aid for the island. We won Republican and Democratic support for Nutrition Assistance for Puerto Rico.

Please take action now and tell Congress to fund Puerto Rico’s Nutrition Assistance Program and provide further disaster aid and support debt relief. The Senate may vote on Monday, so they need to hear from you now.

Gratefully,

Kate Zeller
Campaigns Director

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Senate Votes on Puerto Rico Disaster Aid and Emergency Food Assistance

Washington, DC - The Senate agreed to vote next week on disaster relief legislation that includes $600 million in emergency food assistance for Puerto Rico. In recent days, a turbulent exchange between President Trump and Congressional leadership exploded over whether or not Puerto Rico disaster aid monies should be included in Senate legislation.

“We need to urgently pass more disaster relief for Puerto Rico. Too many fellow Americans continue to suffer in Puerto Rico because of the hurricanes and a terrible financial crisis," said Eric LeCompte, Executive Director of Jubilee USA, whose organization ran a three-month campaign to pass $600 million for Puerto Rico's Nutrition Assistance Program (NAP).

Now, legislation poised for Senate vote as early as Monday includes funding for Puerto Rico's NAP. The "food stamps" program supports poor people affected after 2017 hurricanes decimated the island. The Senate legislation restores benefits for more than 1 million participants who lost food assistance benefits on March 1st.

Some lawmakers complain that not enough disaster aid for Puerto Rico is moving forward and some monies are stalled from delivery. Various Congress amendments and actions seek to deliver more disaster aid for the debt-strapped US Territory.

“Aid that was promised by Congress needs to be urgently delivered to Puerto Rico,” stated LeCompte. "The promise from Congress to relieve Puerto Rico's debt must also be delivered."

In 2016 Congress passed emergency debt restructuring legislation for Puerto Rico. The legislation, PROMESA or Puerto Rico Oversight, Management, and Economic Stability Act, formed an oversight board for Puerto Rico, which is considering a new budget plan for Puerto Rico.

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House Hearing Reviews Financial Transparency Legislation

Washington DC - The House of Representatives is holding hearings on legislative initiatives to deter corruption and secrecy in the global financial system. The Financial Services Subcommittee on National Security, International Development and Monetary Policy convenes a March 13th hearing on "Promoting Corporate Transparency: Examining Legislative Proposals to Detect and Deter Financial Crime."

The Congressional Hearing explores the role that shell corporations play in hiding the true owner or actual person who benefits from a business.

"Some anonymous shell companies facilitate the theft of development aid and debt relief, the exploitation of vulnerable communities and the support of corrupt regimes in the developing world," wrote Jubilee USA Director Eric LeCompte in a letter to Congress ahead of the hearing. The letter from the head of the religious development group continues, "Shell companies contribute to an estimated one trillion dollars leaving the developing world annually through tax evasion and corruption. In the United States, anonymous shell companies contribute to Medicare fraud, thefts from vulnerable communities and human trafficking."

The House Committee is reviewing a discussion draft of the "Corporate Transparency Act of 2019," which makes the real identity of the owner of a shell company available to law enforcement and financial institutions.

Additional legislative solutions are under review during the House Hearing. The hearing docket examines draft legislation on hidden illegal monies and a Bill introduced in January to expose foreign corruption, the "Kleptocracy Asset Recovery Rewards Act."

"In the US and around the world, poor people are too often exploited by financial secrecy," stated LeCompte. "Action by Congress can increase global transparency and provide resources for development."

Read Jubilee USA's full letter to Congress on the hearing, “Promoting Corporate Transparency: Examining Legislative Proposals to Detect and Deter Financial Crime"

Visit the House Financial Services Committee to watch and review information on the hearing

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Congress Letter: House Corporate Transparency Hearing

The Honorable Maxine Waters
Chairwoman
U.S. House Committee on Financial Services
2129 Rayburn House Office Building
Washington, D.C. 20515

The Honorable Patrick McHenry
Ranking Member
U.S. House Committee on Financial Services
4340 O'Neill House Office Building
Washington, D.C. 20002

Re: March 13th Transparency Hearing and the Corporate Transparency Act of 2019

Dear Chairwoman Waters and Ranking Member McHenry:

On behalf of Jubilee USA, I want to thank-you for your support of our bipartisan initiatives to promote transparency, accountability and protections for the vulnerable in our financial system. Jubilee USA supports your March 13th, 2019 hearing on “Promoting Corporate Transparency: Examining Legislative Proposals to Detect and Deter Financial Crime.”

As you know from our work together in the past, Jubilee USA’s religious institutions, members and founders include more than 700 Christian, Jewish and Muslim faith communities and the US Episcopalian, Presbyterian, Methodist, Evangelical Lutheran, Catholic and United Church of Christ Churches. On behalf of our network, we are concerned with how financial secrecy, corruption and tax evasion impact vulnerable communities in the United States and around our world.

Some anonymous shell companies facilitate the theft of development aid and debt relief, the exploitation of vulnerable communities and the support of corrupt regimes in the developing world. Shell companies contribute to an estimated one trillion dollars leaving the developing world annually through tax evasion and corruption. In the United States, anonymous shell companies contribute to Medicare fraud, thefts from vulnerable communities and human trafficking.

The draft of the 2019 Corporate Transparency Act takes important steps toward ending abuses of anonymous companies. Increasing corporate transparency reduces corrupt behavior and can provide resources for US and global development. By identifying the owner who benefits from the existence of a corporation or collecting “beneficial ownership” data, law enforcement has tools to find criminals, corrupt public officials and deter enterprises that exploit the poor. Legislation that offers a clear and comprehensive definition of beneficial ownership avoids the pitfalls of inadequate definitions that only identify managers, directors or other stand-ins for the true owner(s).

The 2016 release of the “Panama Papers” was instructive in this regard. Due to lax rules around corporate ownership information, a single employee at the Panamanian law firm, Mossack Fonseca, served as the named entity for approximately 20,000 companies. She had little-to-no knowledge of the beneficial owners of those 20,000 companies.

Another crucial area in the draft is the provision governing access to information gathered. State and local law enforcement must have access because most investigations into illegal activity are performed by state and local officials in the United States. Financial institutions, which have anti-money laundering responsibilities, should have appropriate access to beneficial ownership by simple request.

On behalf of all at Jubilee USA we hold you in prayer as you work to ensure that our financial system protects the poor and fights corruption.

Sincerely,

Eric LeCompte
Executive Director

CC: Members of the House Financial Services Committee

 

PDF Version available here.

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