Detroit Catholic Quotes Eric LeCompte on Ukraine's Debt

Detroit Catholic quotes Eric LeCompte on the need for debt relief in Ukraine. Read the full article here

Relief sought on Ukraine's debt to prevent global financial disruption

By Dennis Sadowski

Jubilee USA is calling on international financial institutions and the United States to signal additional support for Ukraine by restructuring the debt the war-ravaged nation owes before payments come due later this year.

Restructuring a large chunk of Ukraine's estimated $94.7 billion debt is necessary so the beleaguered country can avoid defaulting on loans, an outcome that would reverberate through the international economy, explained Eric LeCompte, executive director of the alliance of faith-based development and debt-relief advocacy organizations.

While welcoming the financial sanctions rapidly imposed by the U.S. and much of the world on Russia, LeCompte urged the World Bank, the International Monetary Fund and the United States to act soon on the debt question.

"In terms of reality, Ukraine is gong to start defaulting on its various debt payments as soon as this year," LeCompte told Catholic News Service.

LeCopmpte identified critical needs such as streamlined procedures to restructure debt, address bankruptcy and distribute economic aid to developing countries that would prevent a severe financial crunch like the one facing Ukraine.

For years, Jubilee USA has partnered with the Vatican Dicastery for Promoting Integral Human Development and its predecessors as well as the U.S. Conference of Catholic Bishops to urge global financial institutions to set in place procedures to quickly respond to crises, but has not seen significant movement, LeCompte said.

Despite financial challenges as an emerging economy, LeCompte said Ukraine has been able to make its required debt payments over the years.

Russia's invasion throws the country's finances into chaos, however, he said.

Ukraine's $94.7 billion debt is held by domestic and international institutions and individual countries. A breakdown provided by Jubilee USA shows that the World Bank, IMF and international development banks hold about $22 billion; the IMF alone holds more than half of the amount, or about $13.4 billion.

The World Bank is scheduled to debate an aid package for Ukraine March 4. The organization is seeking rapid approval for an emergency loan to help Ukraine defend against Russia's incursion, LeCompte said. Reuters reported the amount to be $350 million.

LeCompte said his organization is urging President Joe Biden's administration to ask Congress to pass an appropriation to cover the payment.

LeCompte said Biden can issue an executive order to delay payments to the private sector in the U.S. during a time when the country needs to spend its resources to respond to the growing humanitarian catastrophe in the country. President George W. Bush took a similar step regarding Iraq's debt during war in the first decade of the 21st century.

That leaves debt payments to Ukrainian banks and individuals. Defaulting on those payments would harm the Ukrainian economy, LeCompte said.

He reiterated the need for the world to be able to quickly respond to crises in whatever form they may take.

"While there's a lot of things that are happening and can happen," LeCompte said, "we're not able to do everything we need to be able to do with the Ukraine crisis or the global pandemic because we still don't have the tools in place that we and the church have been calling for since the last crisis."

 

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Crux Quotes Eric LeCompte on Ukraine's Economic Recovery

Crux quotes Eric LeCompte on Ukraine's economy recovery. Read the full article here.

Catholic expert says if you want to help Ukraine, restructure its debt

By John Lavenburg

“In order for Ukraine to get through the current crisis in terms of recovery and its economy, it’s essential they have access to resources. One of those resources is being able to have debt relieved and restructured, in addition to whatever kind of other aid they could get,” Eric LeCompte, the executive director of Jubilee USA Network, told Crux.

Ukraine’s total debt is about $94.5 billion, according to the International Monetary Fund. LeCompte said that as Ukraine faces the crisis of the Russian invasion, there are important steps the IMF, World Bank, and United States can take to alleviate some of its economic challenges.

Ukraine’s debt to the IMF is about $13.4 billion, more than $2 billion of which has to be paid this year unless it’s restructured.

“That’s a particular action the IMF has to look at now, and it would send a strong political signal in support of Ukraine if they were to restructure and move those debt payments to the future,” LeCompte said. “Even if they don’t act now, it’s very likely it’ll be something they have to do [eventually], because Ukraine isn’t going to have the money to pay that debt.”

Of the numerous, tough sanctions that the U.S. and world have placed on Russia in recent weeks, LeCompte said that “in the short term it’s something good to put pressure, but we also need to recognize that in some ways they’re kind of blunt instruments.” He added that the way the global system is set up will ultimately limit the amount of resources Ukraine receives.

“It’s unfortunate that we lack the tools and the financial system to really be able to support countries in crisis because all of the actions that we can take, which are important, are piecemeal, and without some kind of adequate bankruptcy and aid process we’re not going to be able to deliver the full amount of resources Ukraine needs,” LeCompte said.

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Congress Votes Pandemic, Ukraine, Vaccines

Dear Friend,

Our hearts and thoughts are with Ukraine and the media is covering our additional requests to the IMF, Congress and White House to support Ukraine, that you'll see below. First - in the next days, Congress votes on our pandemic response aid as part of the big budget vote scheduled to take place by March 11th. 

Thanks to your petitions and phone calls, we already put legislation in front of Congress that requests $22 billion in pandemic response aid and debt relief, and another $5 billion to help poor countries provide vaccines and treatments. Now we need to make sure it passes. Please call your Senators now.

In a recent commentary in the major Christian magazine, Our Sunday Visitor, Ambassador Sam Brownback and Jubilee USA Executive Director Eric LeCompte made the moral case for extending Special Drawing Rights aid and vaccines to developing countries. We speak about Africa, where less than 11% of the population are vaccinated and the pandemic continues to wreak havoc. You can read our column on pandemic response here.

As we write in Our Sunday Visitor, developing countries are facing a terrifying economic and humanitarian crisis. Please call your Senators now and ask them to support our Jubilee pandemic response package. Your calls now can make a big difference.

While your voice is needed now on pandemic response, we also see the growing suffering in Ukraine. Jubilee USA's Eric LeCompte offers our thoughts and analysis on what the IMF, Congress and White House can do now to aid and move forward debt relief for Ukraine. Our views are covered by CNN, Fox News and you can read Eric's conversations with Reuters, Catholic News Service and Devex

In the Catholic News Service feature, we highlight that many of the challenges we face with global pandemic response and the Ukraine crisis is because world leaders failed to implement the crisis response tools that Jubilee USA called for since the 2008 crisis.

Thanks for taking action ahead of the Senate voting. Next week we'll need you to do more as we prepare for Puerto Rico votes in Congress.

In partnership,

Aldo

Aldo Caliari
Senior Director of Policy and Strategy
Jubilee USA Network
[email protected]
www.jubileeusa.org/support-us

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Eric Speaks with Devex on Ukraine's IMF Loans

Devex quotes Eric on Ukraine's IMF Loans. Read the full article here

China-based AIIB and NDB halt work in Russia as sanctions hit

by Shabtai Gold

The China-led Asian Infrastructure Investment Bank has stopped “all activities relating to Russia and Belarus” pending a review, citing the war in Ukraine.

Separately, the New Development Bank — which finances projects in emerging and developing markets and is sometimes known as the “BRICS bank,” in reference to founding members Brazil, Russia, India, China, and South Africa — said Thursday that it had “put new transactions in Russia on hold” amid “unfolding uncertainties and restrictions.”

Eric LeCompte, executive director at the Jubilee USA Network, told Devex that Ukraine has payments due on IMF loans, which the country will now struggle to make given the dire circumstances.

IMF could “give Ukraine some breathing space,” by agreeing to delay repayments, said LeCompte, whose organization advocates for poverty reduction around debt issues.

“The IMF will likely take that action, but it should do it sooner rather than later, to signal support,” he said.

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Reuters Quotes Eric LeCompte on Ukraine

Reuters quoted Eric LeCompte on Ukraine's debt burden. Read the full article here

Ukraine tapped lion's share of IMF reserve allocation, debt pressures building

By Andrea Shalal

The U.S. Treasury Department and the IMF could take several steps to ease Ukraine's debt burden and avert a payments crisis, Eric LeCompte, executive director of Jubilee USA Network, told Reuters.

Treasury could seek congressional authorization to freeze the $2 million in service payments Ukraine owes the United States this year on its $790 million bilateral debt, he said.

U.S. President Joe Biden could also issue an executive order deferring debt payments to private creditors located in the United States, he said, citing a similar move made by former President George W. Bush during the Iraq war in 2004-2005.

Doing so, he said, would send a "strong signal of support for Ukraine beyond the really good things that the administration has already been doing".

It would also ensure that private creditors don't "use this moment to try and exploit Ukraine", he said.

 

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Devex Quotes Eric LeCompte on Growing Debt Crisis

Devex Invested quoted Eric LeCompte on the growing debt crisis. Read the full article here.

Devex Invested: IFC’s focus on Africa: Makhtar Diop 1 year on

By Shabtai Gold and Adva Saldinger

Experts are worried about a distinct lack of urgency at the G-20 around the growing debt crisis, with the wealthiest nations likely to escape a major economic contraction.

“We are going to see a wave of defaults,” Eric LeCompte, executive director at the Jubilee USA Network, tells Shabtai.

While IMF and the World Bank are also concerned, the sense emerging from last week’s meeting of G-20 finance ministers is that we won’t see serious movement on an international debt relief framework until at least the leaders’ summit in Indonesia toward the end of the year — if at all.

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Yahoo Finance and South China Morning Post Quote Eric LeCompte on Debt, China and the G20

Why is China being blamed for the stalled G20 debt relief plan for distressed countries?

Yahoo Finance and South China Morning Post quoted Eric LeCompte on China, debt relief and the G20. Read the full article here

Eric LeCompte, Jubilee USA's executive director and a United Nations finance expert, who has monitored G20 and G7 meetings since 2010, said the debt discussion was one of the most difficult conversations at the G20 meeting.

"Developing countries struggled with a lack of resources before the pandemic hit. Now they struggle with low revenues and rising debts. Without debt relief, we will see a wave of defaults and countries will run out of money to pay their creditors," LeCompte said.

He said the promise of the G20's Common Framework was that it could bring together all creditors, including China and the private sector, under one umbrella. Unfortunately, the private sector was refusing to cooperate, and China was slowing the process down, LeCompte said.

"It appears China wants to cut its own debt deals before the Common Framework process is more fully implemented. This means that the G20 is still lacking consensus to move forward their debt reduction process in a robust and quick way," he said.

"It will probably take more defaults and increased crises, when developing countries run out of money to pay debts, for world leaders to move more rapidly."

 

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Eric LeCompte speaks on KPFA News about the G20 and pandemic response

Eric LeCompte spoke on KPFA's evening news show about the role of the G20 in pandemic response. Read an excerpt below and click here to listen to the full show.

The KPFA Evening News (Saturday) – February 19, 2022

Selected Statements from Eric LeCompte

"We were expecting stronger language on pandemic response, on vaccines as well as debt relief."
"Right now, the majority of the world's countries, which are developing countries, are either in or facing financial crisis."

"The finance ministers of the G20, who make most of the decisions for the world, including decisions for the developing countries, fell short at these meetings at delivering strongly on debt relief, ensuring vaccines are getting to developing countries, as well as a more robust response on getting aid to these countries as they are facing crisis."

Listen more here from 25:24 till 22:50.

 

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Reuters Quotes Eric LeCompte on G20 Discussions

Reuters quoted Eric LeCompte on G20 Discussions. Read the full article here

Russia, China water down G20 text on geopolitical tensions

By Gayatri Suroyo and David Lawder

The G20 talks, held virtually and in the Indonesian capital, Jakarta, were also marked by disagreements over the group's stalled debt restructuring framework.

The final communique failed to endorse International Monetary Fund and World Bank proposals for an immediate debt service suspension for poor countries that seek restructurings and an expansion to include some middle-income countries.

"The G20 discussions on debt were really disappointing," said Eric LeCompte, executive director of the Jubilee USA Network, a faith-based organization campaigning for debt relief for poor countries. He said China was resisting steps to strengthen the bankruptcy-like G20 debt framework "so that they can cut deals on the side" with debtor countries.
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Jubilee USA Statement on G20 Finance Ministers Meeting and Communiqué

Washington DC – G20 finance ministers and central bank governors concluded their first meetings under the Indonesian Presidency on COVID response, recovery and preparing for future crises. The finance ministers released a communiqué on their two days of deliberations.

Eric LeCompte, Executive Director of the religious development group Jubilee USA Network and a United Nations finance expert who monitored G20 meetings since 2010, releases the following statement on the G20 finance ministers meeting and communiqué:

"Much of the focus of the meetings was on inflation and supply chain shocks.

"While inflation and supply chain shocks are challenges for all countries, G20 countries are focusing on how these issues impact their own economies. For developing countries with debts pegged to the dollar it means their debts are higher. Supply chain shocks for poor countries mean more people are going hungry.

"The IMF estimates by 2024 pandemic losses to the world economy will reach $14 trillion.

"We are disappointed by the current status of getting COVID vaccines, tests and treatments to developing countries.

"It seems less and less likely that we will reach the goal of vaccinating 70% of the world's population this year.

"The finance ministers stated support of distribution of vaccines and therapeutics. We need urgent action to fund the distribution. The $75 billion that is needed for the pandemic preparedness fund should be quickly funded by wealthy countries.

"The discussion on debt was one of the most difficult conversations at these G20 meetings.

"The World Bank and IMF are warning of a wave of defaults and we've failed to implement the G20 debt restructuring commitments for vulnerable countries.

"Many developing countries faced crisis and a lack of resources before the pandemic hit. Now they struggle with low revenues and rising debts. 

"The commitment of the finance ministers to ensure that the G20's debt restructuring process is orderly, timely and coordinated is important as we need to act quickly to prevent greater debt crises in developing countries.

"Unfortunately, it seems the G20 is still lacking consensus to move forward their debt reduction process in a robust and quick way.

"The G20 finance ministers are trying to rapidly implement rules to curb tax evasion and avoidance.

"The challenge with the tax agreements at this point is they do little to raise revenues in developing countries. 

"The Indonesian meetings reviewed progress for wealthy countries to use their IMF emergency pandemic response funds to support developing countries.

"Wealthy countries need to do more to get IMF Special Drawing Rights to developing countries.

"There is good progress on a new vehicle to use Special Drawing Rights to fight the pandemic and the impacts of climate change.

"The Resilience and Sustainability Trust, which could use $50 billion in Special Drawing Rights from wealthy countries, can support developing countries to take action on climate and pandemic preparedness.

"We need options that allow wealthy countries to share Special Drawing Rights through development banks in order to get more support to developing countries.

"IMF loan surcharges continue to deprive countries of critical resources they need at this time and the G20 should find a solution.

"The G20 finance ministers continue to raise the alarm on climate change. The G20 has a big role to play in financing climate commitments and developing rules in the financial system to fight climate change." 

Read the full communiqué here.

Jubilee USA Network is an alliance of more than 75 US organizations and 750 faith communities working with 50 Jubilee global partners. Jubilee USA builds an economy that serves, protects and promotes the participation of the most vulnerable. Jubilee USA wins critical global financial reforms and won more than $130 billion in debt relief to benefit the world's poorest people. www.jubileeusa.org

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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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Voice of America Quotes Eric LeCompte on Debt Relief

Voice of America quoted Eric LeCompte on the COVID-19 Debt Crisis. Read the full article here

Poorer Nations Face 'Lost Decade' Over COVID-19 Debt Crisis, UN Warns  

Eric LeCompte, executive director of the Jubilee USA Network, which campaigns for debt relief for poorer nations, said creditors must act now.

In response to the pandemic, the IMF issued Special Drawing Rights — an emergency currency, effectively — worth $650 billion. Wealthy nations were the main recipients, however, drawing $400 billion from the fund.

LeCompte of the Jubilee USA Network said the G-20 should rectify the imbalance.

"The G-20 could affirm the direction of a pandemic response vehicle that could accept donations of Special Drawing Rights from wealthy countries. The IMF's Resilience and Sustainability Trust could fund long-term, affordable loans to developing countries," he said.

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Voice of America Quotes Eric LeCompte on G20

Voice of America quoted Eric LeCompte in an article on the G20. Read the full article here

UN warns poor countries at risk of 'losing a decade' due to COVID-19 debt crisis

The finance ministers of the G-20, a group of 20 industrialized countries, will begin a two-day meeting in Jakarta on Thursday (2/17), when many poor countries face a worsening debt crisis.

The coronavirus pandemic has left many developing countries piling up debt, which activists in debt relief campaigns say is undermining their ability to provide basic services such as health and education.

Eric LeCompte, executive director of Jubilee USA Network, which campaigns for debt relief for poor countries, said creditors must take action now.

“The G-20 needs to offer rapid and deep debt relief and encourage private creditors to take similar steps. History teaches us that the longer we wait for a debt crisis to be resolved, the harder it is to resolve it," he wrote in an email sent to VOA.

The G-20 also launched a debt reduction program in November 2020, known as the Common Framework. Under the program, participating countries will agree on debt restructuring with bilateral creditors and the IMF, and then seek to obtain similar debt relief on loans in the private sector.

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