Washington DC -  Saudi Arabia chaired an emergency virtual G20 meeting for Presidents and Prime Minsters as the coronavirus wreaks havoc on the global economy. The leaders pledged to pump $5 trillion into the economy, cooperate on health efforts and address debt risks facing poor countries.

"World leaders are incredibly concerned about a crisis that is taking lives and could destroy our economy," shared Eric LeCompte, a United Nations finance expert and Executive Director of the religious development group Jubilee USA. "It's unfortunate that G20 leaders did not commit to the IMF and World Bank calls to suspend debt payments for the world's poorest countries."

Washington, DC -  The International Monetary Fund and World Bank announced that Somalia qualifies to receive debt relief. In three years time, Somalia's debt will be reduced from $5.2 billion to $557 million.

"Debt relief for Somalia is incredibly exciting news and can't come soon enough," said Eric LeCompte who leads Jubilee USA, a development group that advocated for debt relief for the African country. "Somalia is one of the poorest countries in the world and this relief is vital to confront extreme poverty in the country."

Washington, DC -  The International Monetary Fund asked G20 countries and other lending countries to stop collecting debt from poor countries due to the coronavirus pandemic.

"We urge lending countries to take up this call so billions of dollars can be freed up for poor countries dealing with impacts of the coronavirus," said Eric LeCompte who leads Jubilee USA. The religious development group sent a letter to the IMF on Monday urging debt payment moratoriums. "Debt payment moratoriums can get money to countries quickly."

Developing Countries Demand Debt Payments Stop

Washington, DC -  On Monday the heads of the IMF and World Bank stated support for debt relief for very poor countries as the coronavirus spreads. African Finance Ministers called for suspension of debt payments to free up $44 billion to fight Covid-19. Ecuador's Congress also demanded its government stop paying debt.

"Countries need to prioritize fighting Covid-19 and billions can be freed up right away by halting debt payments," stated Eric LeCompte who leads the development group Jubilee USA and serves on United Nations debt expert groups. "Both among lenders and borrowers, we see growing calls to stop paying debt to save lives during the pandemic."

Religious Development Group Proposes Solutions for Pandemic Economic Impacts

Washington, DC - The leadership of a religious development group wrote the head of the International Monetary Fund, Kristalina Georgieva, to help stop negative economic consequences of the Covid-19 virus.

“Economic forecasts warn that a possible financial crisis or depression, spurred by the coronavirus, could be worse than the 2008 financial crisis,” warned the letter sent on Monday to the IMF from Jubilee USA's executive officers, Celeste Drake, Reverend Steve Herder, Rabbi Matthew Cutler, Reverend Aniedi Okure and Eric LeCompte. “Nearly 100 million people, mostly women and children, were pushed into extreme poverty and 22 million jobs were lost worldwide in the 2008 crisis.”

Jubilee USA's Executive Committee released a letter today sent to IMF Managing Director Kristalina Georgieva about the fund's response to the COVID-19 pandemic. See the full letter below or access a PDF of the letter here. 

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March 23, 2020

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

"Then you will see and be radiant, And your heart will thrill and rejoice; Because the abundance of the sea will be turned to you, The wealth of the nations will come to you." --- Isaiah 60:5

Managing Director Georgieva,

Concerned about the economic impacts of the Covid-19 pandemic on the vulnerable and our world, we write on behalf of our 700 plus faith communities, global religious institutions and national religious denominations. 

Economic forecasts warn that a possible financial crisis or depression, spurred by the coronavirus, could be worse than the 2008 financial crisis. Nearly 100 million people, mostly women and children, were pushed into extreme poverty and 22 million jobs were lost worldwide in the 2008 crisis. The International Labor Organization says the numbers of jobs lost could surpass 50 million as a result of a new, deeper financial crisis.

Developing countries will struggle to limit the death toll and boost ill-prepared health systems. In many cases, healthcare exists in a weakened state in many developing countries because of long periods of austerity policy.

Export and supply shocks, subdued demand and falling commodity prices are a chief concern for developing countries. Revenue loss for countries is a significant concern as the pandemic forces work leaves, closes factories and restricts travel and tourism. At the same time, governments must increase spending on social protection measures and to mitigate business loss. For developing countries, all of these effects are compounded because of high-levels of unsustainable debt. Before this pandemic, 40% of low-income countries already faced debt crisis or high risk of debt distress. High debt leaves little space for fiscal and monetary policy interventions. Treasuries also lack billions in lost revenue because of illicit financial flows, corruption and tax evasion and tax avoidance.

A well-designed, globally-coordinated response from the international community can go a long way to prevent and mitigate the impacts of the Covid-19 crisis and move us towards a recovery path. The International Monetary Fund recently announced that it has $50 billion available under rapid access mechanisms that members can draw upon. In turn, the World Bank announced the deployment of $14 billion on a fast track to help developing countries cope with the health and economic impacts. While welcome steps, the crisis at hand warrants additional vital action.

Jubilee USA Network calls for the following urgent actions:

- Expand debt relief and aid for developing countries impacted by Covid-19 through the Catastrophe Containment and Relief Trust and other processes

Jubilee USA worked with the IMF, the G20, US Treasury and the White House to establish the IMF's Catastrophe Containment and Relief Trust during the Ebola epidemic in 2014. The trust provides debt relief and grant-like aid, which supported Guinea, Liberia and Sierra Leone to bolster their health systems as the countries wrestled with Ebola. The trust only has about $400 million available and countries can only receive support after a high level of economic damage occurs. To fully realize the potential of this instrument in the Covid-19 crisis response, it is urgent to increase the funding, allow its application to cancel debt stocks and ease the level and conditions of disbursement. The IMF is encouraged to lead the way in other processes that offer debt relief, innovative financing and vehicles to bolster healthcare financing.

- Enhance debt restructuring, issue debt payment moratoriums and create expedient debt reprofiling processes for countries impacted by the Coronavirus

In the face of the budgetary implications of Covid-19, many countries cannot meet debt payments without putting the health of their people at risk. The IMF should lead the way in determining that Covid-19 qualifies as a public health emergency, issue debt payment moratoriums and create a process for fast reprofiling of all its outstanding loans in order to help improve debt sustainability outlooks for borrowing members. By taking this measure, it will also enhance its moral authority to call on private creditors to offer a substantial restructuring of their debt claims. The IMF can play a helpful role in facilitating the process of creditor coordination in the negotiation of debt restructurings. 

- Mobilize additional financing resources to support increased needs

As a growing number of countries resort to increased borrowing, market access will likely be too expensive and add to debt burdens. The IMF can lend at below-market rates but will not be adequately equipped to support the increased demand without a substantial resource increase of at least 50 percent over current capacity. Previous crises show that multilateral development banks are primary providers of countercyclical, long-term financing. Their shareholders should commit to additional lending in the amount of $200 billion. This is achievable with a mix of easing conservative lending standards and fast-tracked capital injections. Jubilee USA will work with IMF and World Bank members to achieve these increases in lendable resources for international financial institutions.

- Advise countries on public budget transparency, financial crisis prevention and raising revenues

While the above immediate short-term actions should be implemented, a coordinated response should empower countries to emerge from the pandemic with new resources to support future resilience and prevent further economic loss. IMF advice to countries should ensure strong, consistent advice on public budget approval and transparency, responsible borrowing, building more robust social protection floors and raising revenues to cushion countries from future crises. Beyond public budget transparency, revenue-raising measures include curbing illicit financial flows, corruption, tax evasion and tax avoidance. In recent years, the IMF adopted the adage, "Fix the roof while the sun is still shining." Unfortunately, it's raining and we haven't fixed the roof. The IMF should encourage countries and global institutions to enact agreements on responsible lending, financial transparency and limiting risky market behavior.

Ms. Georgieva, during this moment when the fragility and sanctity of life is forefront on the global stage - we hold you, all at the Fund and our world in our prayers. We look forward to continue working with you to lift the vulnerable and protect all of us from financial crisis.

Sincerely,

Reverend Steve Herder 
Co-Chair

Celeste Drake
Co-Chair

Reverend Aniedi Okure
Executive Officer

Rabbi Matthew Cutler
Executive Officer

Eric LeCompte
Executive Director

PDF Version available here

Pittsburgh Catholic reported on Eric LeCompte's recent thoughts on Pope Francis' Jubilee Meeting with world leaders and economists. Read an excerpt below, and click here for the full story.

Vatican opens doors to leaders ready for economic reform

The leading “global decision-makers” all agree on the root causes of unsustainable inequality and are adamant about wanting to prevent yet another global financial crisis, said Eric LeCompte, executive director of Jubilee USA Network and an observer invited to the Vatican gathering.

He told Catholic News Service the problem comes in finding consensus on the solutions, “the ways forward for countries to get out of debt crisis and financial crisis and also for building an economy that’s more inclusive and where there is less of a distinction between the haves and the have-nots.”

Read more here. 

Eric LeCompte's analysis of recent IMF Chief Kristalina Georgieva were featured in Seeking Alpha. Read an excerpt below, and click here for the full story.

The Glub, Glub, Glub Of Recession Circling The Drain

Eric LeCompte, the head of debt charity Jubilee USA, said: "The IMF delivered a stark message about the potential for another massive financial disaster that we last experienced during the Great Depression.

Read more here. 

Chicago Catholic reported on Eric LeCompte's thoughts on the recent Vatican high-level seminar where Pope Francis urged the creation of new global debt and tax policies that can reduce inequality. Read an excerpt below, and click here for the full story.

Vatican opens doors to leaders ready for finance reform

The leading “global decision-makers” all agree on the root causes of unsustainable inequality and are adamant about wanting to prevent yet another global financial crisis, said Eric LeCompte, executive director of Jubilee USA Network and an observer invited to the Vatican gathering.

He told Catholic News Service the problem comes in finding consensus on the solutions, “the ways forward for countries to get out of debt crisis and financial crisis and also for building an economy that’s more inclusive, and where there is less of a distinction between the haves and the have-nots.”

LeCompte said, “Pope Francis really led his country as they were battling a type of predatory finance known as vulture funds,” so while he is continuing the same social teaching as his papal predecessors, “we see the Holy See talking more about very technical economic policies like derivatives and taxation and illicit financial flows.”

“There’s a real sense from this Holy Father that if we really want to change the structures that govern our economy, we need to be able to address these technical issues head-on,” he said.

The pope, in fact, made a point to stop by the pontifical academy in the early afternoon. His lengthy and detailed written speech continued to hammer home basic and reasonable ethical principles: an end to money laundering, the arms industry and tax havens that drain billions from national economies; stopping repeated tax cuts for the wealthy; and relieving crushing, unsustainable debt burdens, to name a few.

LeCompte said many of the solutions put forward “are ones that Jubilee has advocated for over 20 years, and we’ve worked very closely with the Holy See on developing those positions, as well as with all other major religious institutions around the world.”

Just as the pope’s encyclical, “Laudato Si’,” sets a clear way to examine current structures and advocates for the values of global solidarity and environmental and economic justice, the Feb. 5 gathering was a continuation of that call for a more just world.

“We actually have a very clear path that needs to be taken,” LeCompte said, which begins with God’s creation of a rich and abundant world.

And, he said, the path leads toward that “jubilee promise that Pope John Paul II was the first to exclaim — that we all deserve to live in an economy where we all have enough.”

Read more here.