World leaders gathered for the annual IMF and World Bank Meetings, focused on the pandemic, Ukraine war and decades-high inflation impacting the global economy. The IMF downgraded growth and forecasted losses of $4 trillion between now and 2026. Neither the G20, nor the policymaking bodies of the IMF and World Bank, reached a consensus on statements.

"Russia's invasion of Ukraine dominated the meetings and prevented world leaders from reaching agreements to address the growing global economic crisis," noted Eric LeCompte, Executive Director of the religious development group Jubilee USA Network.

Multiple reports during the meetings focused on a likely global recession, economic downturns, inflation and climate challenges.

"It’s hard to believe that three years into the pandemic, the economic warnings from the IMF forecast greater problems to come,” said LeCompte. “It seems we will see a global recession.”

Developing countries struggle with high debts and interest rate hikes that drive up their debt payments.

"As interest rates rise to tackle inflation, we could see a number of defaults in developing countries,” added LeCompte. "The financial system does not have the tools to deal with multiple debt crises.”

Three countries applied for debt relief under a process agreed by the G20 last year and still have not received debt reductions. The Chair of the International Monetary and Financial Committee welcomed progress on the Zambia debt restructuring under the G20 Common Framework process.

"Beyond some progress on Zambia’s debt restructuring, which comes with significant delay, none of the signals the G20 provided today would encourage borrowers facing debt crisis to use the Common Framework,” stated LeCompte. "Lacking a predictable path for debt relief, indebted countries choose to postpone facing their debt problems."

IMF membership finalized details that allow a new vehicle, the Resilience and Sustainability Trust to begin loans. Three countries, Barbados, Costa Rica and Rwanda, already reached initial agreements to receive loans under the Trust, which takes Special Drawing Rights aid from wealthy countries to fund cheap climate and pandemic loans for vulnerable countries. The IMF also announced pledges of $40 billion in SDR contributions towards the Trust.

"With the Trust already in place, the G20 should focus on similar Special Drawing Rights funding to expand development bank lending," shared LeCompte.

In a statement to the meetings, Africa's Catholic Bishops and major faith leaders called for wealthy countries to rechannel a significant portion of their stock of more than $400 billion in Special Drawing Rights to African countries.

“We especially want to highlight, in our region, the enormous potential of rechanneling through the African Development Bank,” the faith leaders shared.

The IMF also passed a Food Shock Window – a temporary expansion in low-conditions, low-cost loans for countries dealing with food crises.

Members, on the other hand, did not make decisions on the IMF penalty rates for countries taking loans. The surcharges will cost 14 developing countries $8 billion in payments during 2021-2028.

"IMF penalty rates for countries taking loans should be suspended when so many countries need these loans for shocks that fall outside of their control,” stated LeCompte.

Finance ministers discussed proposals to increase development bank lending. US Treasury Secretary Janet Yellen called for development banks to devise new approaches to address global challenges without sacrificing their primary poverty-reduction goals.

"Responding to climate change and other global challenges means that development banks will need to do more,” said LeCompte. "At these meetings, we saw growing momentum to boost development banks so they can provide more aid and lending."

According to the IMF, developing countries will need $300 billion annually in additional funding to adapt to climate change. The World Bank estimates current climate finance amounts should quadruple.

"There is growing concern about the way the climate emergency disproportionately hurts the poor,” added LeCompte.

Jubilee USA, IMF and World Bank Vigil and Paper Chain Delivery: Saturday, October 15th, 11:30 AM, Community Park, outside of the IMF. The chains that we will display in front of the IMF and World Bank between 11:30 AM and noon, were made by churches and synagogues across the US to send messages of debt relief to world leaders. View the advisory here. Link to the online and in-person press registration here.

Eric LeCompte, Executive Director of the religious development group Jubilee USA Network and a United Nations finance expert who has monitored IMF meetings since 2010, releases the following statement on the IMF/World Bank Annual Meetings:

"As a global recession looms, we must take action more quickly.

 

"The war, rising interest rates and inflation are putting developing countries in an even more difficult situation.

G20 finance ministers conclude their meetings during the Annual IMF and World Bank Meetings. The ministers focused on the pandemic, Ukraine war and inflation shocks to the global economy, debt vulnerabilities in developing countries, food insecurity and the climate crises. 

"The G20’s internal rifts prevent the group from responding to multiple crises.

"As interest rates rise to tackle inflation we could see a number of disorderly defaults in developing countries.

"The financial system does not have the tools to deal with multiple debt crises.

"The G20 debt relief process has not, yet, passed key tests showing it can be speedy, reduce debt and involve the private sector.

"Beyond the progress on Zambia’s debt restructuring, which comes with significant delay, none of the signals the G20 provided today would encourage borrowers facing debt crisis to use the Common Framework.

"IMF penalty rates for countries taking loans should be suspended when so many countries need these loans for shocks that fall outside of their control.

"Food price inflation and the pandemic shocks led to a rise of 200 million people going hungry in the last two years.

"The IMF Food Shock Window that expands cheap loans to deal with the food crisis is important, but only a temporary and limited relief measure.

"The G20-commissioned expert group made proposals to expand development bank lending.

"It's up to the G20 to decide which proposals to implement that could yield hundreds of billions of dollars to respond to global challenges. 

"The G20 gave the green light to the Resilience and Sustainability Trust to provide long-term, cheap loans for pandemic and climate reforms in poor countries.

"Wealthy countries can donate their Special Drawing Rights to the Resilience and Sustainability Trust.

"With the Trust already in place, the G20 should focus on similar Special Drawing Rights funding to expand development bank lending."

 

Join us for a Jubilee USA, IMF and World Bank Press Conference: Friday, October 14th, 2:15 PM, Community Park Outside of IMF, view advisory and online and in-person press registration. (Link to registration here).

Find Jubilee USA's October 14th and 15th interfaith vigil, press conference and teach-in details here.

Read Jubilee USA's press release on the World Economic Outlook and Global Financial Stability reports here.

Read Jubilee USA's press release on IMF chief Kristalina Georgieva's curtain-raiser speech here. 

Read Jubilee USA's press release on the IMF Food Shock Window here.

The IMF releases the Global Financial Stability Report and raises global concerns over inflation, climate and recession.

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 IMF Meetings and the Global Financial Stability Report:

"As central banks in leading economies act to tame inflation, we see ripple effects on the debts of developing countries.

"The combination of high inflation and recession deeply affects the poor.

"Developing countries will need $300 billion a year just to adapt to the impacts of climate change, a figure that may grow larger by 2050."

Read the full Global Financial Stability Report here.

Read Jubilee USA's statement on the IMF World Economic Outlook report here.

Read Jubilee USA's press release on IMF chief Kristalina Georgieva's curtain-raiser speech here. 

Read Jubilee USA's press release on the IMF Food Shock Window here.

World leaders will gather in Washington, DC for G20, G7, IMF and World Bank Meetings from October 10th - October 16th. At these meetings, they will make consequential decisions affecting billions of people and our planet. In the face of shocks from the Ukraine war, the pandemic and food crisis, we are calling on world leaders to support jobs, vaccine distribution, debt relief, economic aid and climate change solutions.

Join us on Friday, October 14th for a vigil, teach-in and press conference outside of the IMF, World Bank and G20 Meetings. Hear how religious and community leaders from around the world are working for a Jubilee. On Saturday morning, October 15th, we will bring thousands of paper chains to the IMF calling for debt relief and economic aid.

To stay up to date on all of the events please register at the link below. If you have any questions feel free to contact [email protected] or [email protected].

G7 and African finance leaders should work together to remove the heavy burdens of debts in Africa, Catholic bishops and other faith leaders from the region said in Accra, Ghana, at the end of a two-day meeting. Representing churches in Cameroon, Cote d’Ivoire, Kenya, Ghana, Liberia, Nigeria, Senegal, Togo and South Africa, the dignitaries discussed the effects and responses to the pandemic, Russia-Ukraine war, food inflation and rising interest rates shocks in Africa.

“Less than three years after the biggest global recession in a century, the threat of recession looms again,” the bishops said. “Budget shortfalls and unpayable debts have reduced the room for our countries to take the actions needed to protect the most vulnerable and restore prosperity.”

On October 12th, G7 and African finance ministers will meet on the sidelines of the IMF/World Bank Annual Meetings in Washington DC. Debt, aid and future solutions for debt crises will be on the agenda.

"Africa's religious leaders see the suffering of their people and are calling on world leaders to provide the debt relief and aid needed to fight high food costs and the shocks from the pandemic," shared Eric LeCompte the Executive Director of the religious development group Jubilee USA Network. Jubilee USA works with faith leaders on pandemic and crisis response. "If we are to address global poverty, we need to address the debt and economic structures that are causing poverty around the world."

The African prelates recalled Popes John Paul II and Francis’ support for debt relief and asked for debt relief assessments to enshrine the principle that human development and climate investments come before debt payments.

“G7 countries, as key debt governing jurisdictions, should pass domestic legislations that prevent private creditor litigation from undermining international debt relief efforts,” added the bishops.

Under legislation currently before the New York State Assembly, private creditors would have to join international debt relief deals signed by public creditors. Jubilee USA supports the legislation, and is working with counterparts in key G7 jurisdictions to implement similar initiatives.

The faith leaders also highlighted the importance of the $650 billion in Special Drawing Rights – an emergency currency the IMF creates – released last year for pandemic crisis relief. They called on rich countries to transfer a significant portion of their share of SDRs to African countries.

“We want to highlight the enormous potential in [the] region of rechanneling through the African Development Bank,” faith leaders said.

The African Development Bank is one of the lenders seeking to fund new loans to its members with rich-country SDR contributions. The G20 committed to a global objective of $100 billion rich-country SDRs to countries in need.

Read the full African Catholic Bishops and religious leader statement here.