Hundreds of World Leaders and Development Groups Call for Debt Cancellation

Washington DC - The US Conference of Catholic Bishops and Jubilee USA Network, an interfaith religious group, is urging President Trump to lead the G20 on coronavirus global debt relief plans. The groups argue debt relief immediately allows developing countries to bolster healthcare and survive economic crises.

"As the G20 considers a suspension of debt payments from the 76 poorest countries in the world, the United States can lead the world, again, in calling on wealthy countries, the G20, the IMF and World Bank, to suspend debt  payments for developing countries," wrote Bishop David J. Malloy and Eric LeCompte in a letter to the President on Wednesday. "Suspending debt payments, with no interest, can immediately allow countries to access funds to bolster their health systems and support needed stimulus packages in the developing world—allowing these countries to provide for their own health, safety and security."

Thomson Reuters featured the US Catholic Bishops and Jubilee USA's joint letter to the White House calling for debt relief. Read an excerpt below, and click here for the full story.

Catholic bishops, faith groups urge Trump to back debt relief for poor countries

WASHINGTON (Reuters) - The U.S. Conference of Catholic Bishops and an alliance of faith groups have urged President Donald Trump to champion a moratorium on debt payments for poor countries hit by the coronavirus pandemic that has triggered a global recession.

In a letter sent to the U.S. president on Wednesday, the groups said U.S. leadership was needed to both to help the 76 poorest countries in the world combat the pandemic and safeguard U.S. economic interests.

A move by rich countries, the Group of 20 major economies, the International Monetary Fund and the World Bank to suspend debt payments for those countries would allow them to bolster their health systems and provide for their own health safety, the groups wrote in a letter dated Wednesday.

The novel coronavirus that emerged in China in December has raced around the globe, infecting 1.41 million people and killing 87,700, according to a Reuters tally.

The IMF and World Bank, backed by the World Health Organization, have called on China, the United States and other bilateral creditors to temporarily suspend debt payments by the poorest countries so they could use the money to halt the spread of the disease and mitigate its financial impact.

G20 finance ministers and central bankers are due to consider the issue when they meet online next week during the Spring Meetings of the IMF and World Bank.

The letter from the Catholic bishops and Jubilee USA Network, a non-profit alliance of religious, development and advocacy groups, comes amid growing concern about the high level of debt of developing countries and emerging market economies.

“The current financial crisis threatens U.S. imports and exports from and to the developing world,” the bishops and Jubilee USA wrote. “Providing a suspension of debt payments and debt relief will help safeguard our common interests of returning the U.S. economy to prosperity and growth.”

The groups said the debt payment moratorium should both be interest-free, and expose all debts, including private and predatory loans.

Such a decision could help better assess debt sustainability and vulnerabilities, and, if warranted, trigger a process to restructure debt, the groups told the U.S. president.

Lending by Western countries and multilateral institutions slowed after a major round of debt restructuring in 1996, but the Chinese government, banks and companies have dramatically expanded their lending to developing countries since then.

Read more here. 

PDF version available here

PDF version available here

Washington DC - IMF Head Kristalina Georgieva foreshadowed next week's Spring IMF and World Bank Meetings with her annual "curtain raiser" speech.

"Georgieva's speech acknowledges that we are now facing the worst economic crisis since the Great Depression.

"We're impressed by much of the forward thinking of the IMF. We need to deal with the health and economic crisis now and start to think about recovery.

"I agree with the Fund that we need to expand debt relief and poor countries should stop making debt payments. However, the IMF thinking on the amount of debt relief needed is not enough. We need at least hundreds of billions of debt relief measures, not billions."

Read Kristalina Georgieva's "Curtain Raiser" Speech here

Read Jubilee USA's March 23rd letter to IMF on a health and economic COVID-19 plan  here

Read Jubilee USA's April 1st letter to the IMF on reserve gold funds here

Click here to watch. 

The National Catholic Reporter featured Eric LeCompte's take on the future of the Catholic church's social mission. Read an excerpt below, and click here for the full story.

The church after coronavirus: new understandings of social mission

Click Lancashire cited Eric LeCompte on the IMF's coronavirus response. Read an excerpt below, and click here for the full story. 

IMF Working to Support Georgian Economy amid Coronavirus Crisis

"We believe the Fund should take additional, deeper actions to expand debt relief, aid to the poorest countries in the world as well as offer greater relief to the so-called Middle Income Countries", wrote Jubilee USA Executive Director Eric LeCompte in a letter to the head of the IMF, Kristalina Georgieva.

Read more here. 

The Catholic News Service featured Jubilee USA's work on moving debt relief for poor countries as a response to COVID-19 and the global recession as part of an article on Cardinal Tagle's call for debt relief. Crux, Catholic San Francisco and thousands of other news outlets included Eric's comments in their stories. Read an excerpt below, and click here for the full story.

Declare a jubilee: Pandemic is time to forgive debts, cardinal suggests

April 1, 2020

Kristalina Georgieva
The International Monetary Fund
700 19th St NW,
Washington, DC 20431

"And the crowds asked him, “What then shall we do?” And he answered them, “Whoever has two tunics is to share with him who has none, and whoever has food is to do likewise.” --- Luke 3:10-11

Managing Director Georgieva,

Since Jubilee USA leadership wrote you on March 23rd, we are pleased to see some critical Fund responses to protect the vulnerable and all of us from financial crisis in the face of the coronavirus.

We welcome the following actions: 

• The expansion and use of the Catastrophe Containment and Relief Trust to provide debt relief and health service aid for the poorest countries in the world
• Increased financing to support all countries who need resources to prevent financial crisis, increase social protection floors and ensure workers can continue to be paid
• The calls of the IMF and World Bank to the G20 to suspend all debt payments for the 76 poorest countries in the world
• Support of the G20 and world leaders to come up with a comprehensive action plan on debt vulnerabilities by mid-April
• Exploring processes with the G20 and Financial Stability Board to protect us from a global financial crisis

The above actions are positive steps and we are grateful for your leadership in moving forward these vital actions.

We believe the Fund should take additional, deeper actions to expand debt relief, aid to the poorest countries in the world as well as offer greater relief to the so-called Middle Income Countries.

This is possible if the fund were to access the $140 billion we believe to be held in the IMF's gold sales reserve. These monies should be utilized to expand debt relief for the 76 poorest countries and other developing countries.

If our calculations are correct, based on the latest IMF financial statements available from 2019 and calculating the current price of gold, we believe the fund has about $140 billion in a "rainy day” fund. We are witnessing a growing storm, perhaps the worst economic hurricane we will ever see in our lifetimes. The time to utilize and access these monies is now.

In our work together, we've accessed these monies before. In 2010 when Haiti was devastated by an earthquake and in 2014 when Sierra Leone, Guinea and Liberia fell prey to the Ebola epidemic, these funds were creatively used to cancel debt and provide emergency aid.

While the expansion of the Catastrophe Containment and Relief Trust is an incredible step, due to the limited funds in the account, 29 countries may be eligible for partial debt relief and aid. The funds available in the SDA gold sales reserve could provide full cancellation and additional aid for many countries facing great need. 

Further, we invite the IMF and World Bank to also suspend debt payments for poor and developing countries.

We again point to our letter of March 23rd and the analysis and four point plan that we detailed to lift the vulnerable and prevent a global financial crisis. Generally, that letter encourages urgent action along these points:

• Expand debt relief and aid for developing countries impacted by COVID-19 through the Catastrophe Containment and Relief Trust and other processes
• Enhance debt restructuring, issue debt payment moratoriums and create expedient debt reprofiling processes for countries impacted by the coronavirus
• Mobilize additional financing resources to support increased needs
• Advise countries on public budget transparency, financial crisis prevention and raising revenues

Managing Director Georgieva, we know that we are likely confronting the worst economic and health crisis in our lifetimes and we look forward to continue working with you to take bold, urgent and needed actions for our survival.

In hope,

Eric

Eric LeCompte
Executive Director

Full letter PDF here

Vatican Official Calls for "Jubilee"

Washington DC -  A United Nations agency that predicted the 2008 financial crisis is calling for $1 trillion in debt relief for developing countries to battle the economic impacts of the coronavirus. 

"We are in a recession and likely facing the greatest financial crisis since the Great Depression," stated Eric LeCompte, the Executive Director of the religious development group Jubilee USA. "Massive debt relief and aid is needed as developing countries attempt to withstand the economic shocks caused by the coronavirus."

The Associated Press quoted Eric LeCompte on the IMF Director Kristalina Georgieva's global recession remarks. Fox News, The New York Times, US News and World Report and tens of thousands of other news outlets included Eric's comments in their stories around the world. Read an excerpt below, and click here for the full story.