African Bishops Call for Debt Relief and Aid to Address Multiple Crises

Statement Precedes G7, African Finance Ministers and IMF Washington Meetings

Washington DC – 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.

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Presbyterian Mission Features Aldo Caliari on the International Debt Crisis

Presbyterian Mission features Aldo Caliari on the International Debt Crisis, private creditors, and the New York Taxpayer and International Debt Crises Protection Act. Below is a brief excerpt, and click here to read the full article.

Call to New York Presbyterians: Take Action on International Debt Crisis

By Aldo Caliari

In May, New York State Assembly member Patricia Fahy, Chair of the Banks Committee, introduced legislation that would ensure private creditors participate in debt relief initiatives at the same level as the US government, other governments and other creditors. Under the New York Taxpayer and International Debt Crises Protection Act, a debtor country cleared to have debt cuts in an international initiative would be protected from private creditor litigation. Should a private creditor sue, the legislation requires that the judge reduces their claim by the same proportion agreed in the applicable global debt initiative. Of course, with such ruling expected, the hope is that most creditors will likely not choose to go to court at all. Debtor countries can manage crises more efficiently, finding a quicker exit and lowering the economic and social costs to their people, especially the most vulnerable.

Read more here.

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IMF Provides Emergency Food Crisis Loans

Washington DC – The IMF launches the Food Shock Window to aid countries facing food shortages by expanding access to rapid, low-interest loans. The number of people facing food shortages rose by more than 200 million since the pandemic.

“All over the world people are struggling with food shortages because of the pandemic, the Ukraine war and soaring prices spurred by inflation,” said Eric LeCompte, Executive Director of Jubilee USA. "The IMF's action helps countries wrestling with food crises."

In 45 countries, 50 million people are on the verge of famine, the World Food Programme reported.

“The growing global food crisis can push countries into social unrest and instability,” added LeCompte. “While the Food Shock Window helps, it is only buying time. More loans as many countries struggle to pay debts is not a long-term answer."

Sixty per cent of the poorest countries and 30 per cent of developing middle-income ones are at risk of debt crises. 

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Available for interview: Eric LeCompte, Executive Director
Contact: Mizraim Belman Guerrero, Communications and Outreach Director
[email protected] / (202) 430-6975

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US Catholic Quotes Eric LeCompte on Rising Interest Rates and Debt

US Catholic quotes Eric LeCompte on the use of rising interest rates to combat inflation, and its implications for debt-ridden countries. Read an excerpt below, and click here for the full article.

We can’t fight inflation at the expense of the poor

By Kevin Clarke

In this time of converging crises, rising interest rates “mean developing countries have higher debt payments just when they need to invest more to protect their people,” Eric LeCompte, director of Jubilee USA Network, reminded policymakers as G20 finance ministers convened in Bali, Indonesia in July. “Countries need debt relief, not more debt.”

Raising interest rates to combat inflation can only be one aspect of a comprehensive approach to stabilizing the global economic order. A human factor, the church’s preferential option for the poor, must be part of the calculus among economists in Washington, Geneva, Brussels, and New York.

 

Read more here.

 

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Axios Quotes Eric LeCompte on the Numerous Crises in Puerto Rico

Axios quotes Eric LeCompte in an article detailing the numerous political and economic crises Puerto Rico faces. Read an excerpt below, and click here for the full article.

Puerto Rico's intersecting crises

By Nathan Bomey

Driving the news: Puerto Rico's entire power grid — which has been in bankruptcy for the last half decade — went down after Hurricane Fiona ripped through on Sunday. It's another humanitarian crisis for an island that was supposed to be keeping the lights on by now.

  • Only about 32% of Puerto Rico residents had power restored as of Thursday, while about 3 in 4 were still without clean water, according to Jubilee USA Network, an organization that has advocated for debt relief for Puerto Rico.
  • "Even relatively minor storms can shut down the power grid on the island," Jubilee executive director Eric LeCompte tells Axios. And "the water supply is dependent in many parts of the island on the electrical grid."

 

Read more here.

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Crux Quotes Eric LeCompte on Puerto Rico's Need for Disaster Recovery Aid

Crux quotes Eric LeCompte on Puerto Rico's need for disaster recovery aid after being hit by Hurricane Fiona. Read an excerpt below, and click here for the full article.

Puerto Rico devastated after Hurricane Fiona hits

By John Lavenburg

Eric LeCompte, the executive director of Jubilee USA Network, told Crux in August that Puerto Rico needed an additional $50 billion in disaster recovery aid, and an acceleration of the disbursement of the $55 billion in disaster recovery aid that Congress has already allocated for recovery efforts related to Hurricanes Maria and Irma, cautioning how bad things could get if it experienced another disaster.

He renewed that call Sept. 20, saying in a statement that “Puerto Rico will need more aid to address the damages from Hurricane Fiona, the island’s child poverty crisis and recovery from previous disasters.”

 

Read more here.

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Hurricane Fiona Damage Adds to Puerto Rico Aid Needs, Debt Woes

Washington DC  Hurricane Fiona caused floods and cut power across Puerto Rico as more than 2 feet of rain fell on the island. The category 1 storm - which strengthened to category 3 after hitting the island - comes five years after Hurricanes Maria and Irma led to 3,000 deaths and more than $100 billion in damages. Since then, Congress allocated $55 billion in disaster aid. The aid is still not fully disbursed and deployed. Additional recovery needs for Hurricanes Maria and Irma are estimated at $50 billion.  

“Fiona is the latest disaster to hit Puerto Rico,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. Jubilee USA Network has worked on debt and disaster relief efforts for the island since 2015. “Puerto Rico will need more aid to address the damages from Hurricane Fiona, the island's child poverty crisis and recovery from previous disasters."

In March, Puerto Rico concluded a bankruptcy process that took over four years and yielded cuts of about 50% of the island's $72 billion debt. In a statement, 26 Puerto Rico and US religious leaders welcomed the agreement but laid out a comprehensive economic agenda needed to prevent future debt crises. The plan includes building quality and sustainable infrastructure.

“Storms will continue to strike Puerto Rico and the electricity grid must be repaired to withstand future storms," stated LeCompte. "While debt relief for Puerto Rico is helpful, not enough debt was cut for Puerto Rico to be prepared for situations like Hurricane Fiona."

The religious leaders’ Puerto Rico plan calls for expanding manufacturing jobs, increasing disaster relief and winning the same funding as US states receive for nutrition, child poverty, health, disability and tax relief programs.

Read Religious Leaders Statement on Puerto Rico Debt Deal and Way Forward here.

Read Jubilee USA's Press Release on US and Puerto Rico Religious Leaders Statement here.

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Available for interview: Eric LeCompte, Executive Director
Contact: Mizraim Belman Guerrero, Communications and Outreach Director
[email protected] / (202) 430-6975

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WAMC Quotes Eric LeCompte on the New York Taxpayer and International Debt Crisis Protection Act

WAMC quotes Eric LeCompte on an article detailing Assemblywoman Pat Fahy and the New York Taxpayer and International Debt Crisis Protection Act. Below is a brief excerpt, and click here for the full article.

Fahy introduces bill to help developing nations recover from pandemic

By Ashley Hupfl

At the state Capitol Wednesday, Assemblywoman Fahy said the New York Taxpayer and International Debt Crises Protection Act would close that gap by ensuring private creditors participate alongside public creditors on comparable terms. The DSSI is set to expire at the end of the year if it is not once again extended, but the Common Framework does not.

Eric LeCompte is executive director of the Jubilee USA Network, a coalition of religious institutions and labor groups. He argues the bill would also help the United States, because the IMF says inequality is being driven by global debt.

“The problems that developing countries are facing, that emerging markets, middle-income countries are facing are also a part of the problems we're facing in the United States in terms of economic shocks and supply shocks. The reality in terms of the Trump administration and Biden administration continuing the bi- partisan calls for debt relief…it's more than just helping the most vulnerable people on Earth that we as the religious community deeply care about. It's also about protecting our investments.”

 

Read more here.

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Religious Leaders: New York Debt Bill Helps Solve Economic Crises in Developing Countries

New York and US Taxpayers, Global Economy Benefit from Legislation

Washington DC – Religious and labor leaders explained that New York laws can provide debt relief for countries struggling from the pandemic and shocks from the Ukraine war. Speaking at a press conference in the New York State Capitol Building, they expressed support for legislation introduced by Assemblymember Patricia Fahy, Chair of the Banks Committee.

“New York is the world’s global financial hub — positioning us well to enact basic changes that will ensure debt relief for developing nations through investments in sustainable growth, infrastructure and more,” said Fahy. “Not only will this legislation protect U.S. taxpayers, it will spur new development and growth within the global economy, reduce stress on international supply chains, and establish clear strategies for growth in nations burdened by massive amounts of debt.”

The New York Taxpayer and International Debt Crises Protection Act (A. 10595) ensures private creditors participate in debt relief initiatives at the same level as the US government, other governments and other creditors. Over 50% of the world's debt held by private creditors is contracted under New York State law.

“The pandemic pushed many developing countries into debt and economic crises,” stated Eric LeCompte, Executive Director of the religious development organization Jubilee USA Network. “Countries can get help resolving debt crises under New York law and the new legislation ensures countries get the relief they need. Because we trade with these countries, resolving debt crises helps resolve supply and economic shocks that we face at home.”

At 7:00 PM ET, Jubilee USA Network hosts a panel discussion featuring Fahy and LeCompte. Speakers include, Rabbi Matthew Cutler, Congregation Gates of Heaven Synagogue; Rev. Dustin Longmire, Messiah Lutheran Church of Schenectady, New York, and former President of the New York Council of Churches; Rev. Nicolle D. Jean-Simon, Pastor of Duryee Memorial African Methodist Episcopal Zion Church and NAACP President of Schenectady Branch #2175; Rev. Dr. Amaury Tanon-Santos, Executive Director of Schenectady Community Ministries and President of the Labor Religion Coalition of NY State; and Ron Deutsch, Executive Director of New Yorkers for Fiscal Fairness.

Watch livestream event “Funding Food, Vaccines and the Environment in Developing Nations,” at 7:00 PM ET.

Read NYS Assemblymember Patricia Fahy’s Office Press Release here.

View the NY Taxpayer and International Debt Crisis Protection Act and Bill Memo here.

Read a previous Jubilee USA press release on the bill here.

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Available for interview: Eric LeCompte, Executive Director
Contact: Mizraim Belman Guerrero, Communications and Outreach Director
[email protected] / (202) 430-6975

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Executive Director Eric LeCompte Speaks with Madison Public Radio on Student Debt Cancellation

Eric speaks with WORT 89.9 a Madison, WI public radio on student debt cancellation. Hear the full interview here

LeCompte: How Student Debt Cancellation Affects Communities

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Annual Federal Reserve Wyoming Meeting Hosts Central Bank Heads to Improve Global Economy

Inflation, Recession and Developing Country Debt Top Agenda of Jackson Hole Meeting

Washington DC – The future of interest rates and the threat of stagflation – a phenomenon where the economy and jobs shrink while inflation rises -- dominate the agenda at a three-day global central bank retreat starting on Thursday. This year’s traditional Jackson Hole, Wyoming symposium gathers the US Federal Reserve and other world central banks under the theme "Reassessing Constraints on the Economy and Policy."

“The meeting is focused on trying to tame inflation without causing more harm for developing countries in crisis,” said Eric LeCompte, Executive Director of the development group Jubilee USA Network. “We are reminded by the challenging decisions world leaders faced with the economy in the 1970s. At this point with greater threats to the global economy, we are in uncharted waters."

The US Federal Reserve raised interest rates more than two percentage points since the beginning of the year and consumer prices rose the fastest in four decades. The combination of interest rate increases and a strong dollar raises debt levels in developing countries. In July the IMF reported that debt in 60 percent of the poorest countries and 30 percent of emerging middle-income economies reached critically-high levels.

“While lowering inflation is important, we need to keep in mind the global impacts of increased debt, food crises and supply shocks that can undermine the economic stability we hoped to achieve through lower inflation,” shared LeCompte.

On Friday, Federal Reserve Chair Jerome Powell addresses the Jackson Hole meeting.

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Available for interview: Eric LeCompte, Executive Director
Contact: Mizraim Belman Guerrero, Communications and Outreach Director
[email protected] / (202) 430-6975

Read More