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

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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Biden Cancels Student Debts and Extends Loan Payment Suspension

The Biden Administration announced plans to cancel $10,000 in student debt for borrowers earning under $125,000 a year. Borrowers who received a college federal Pell grant, given to students that have the greatest need, qualify for up to $20,000 in student debt relief. The White House action extended a freeze on student loan payments that President Trump initiated in 2020 as part of pandemic relief. This is the fifth time President Biden continued the moratorium on student debt payments.

“President Biden’s historical student debt cancellation is a bold step that goes beyond previous support and will help vulnerable communities,“ said Eric LeCompte, Executive Director of religious group Jubilee USA Network. LeCompte's organization advocated for the student relief measures with the Biden and Trump White House. “Soaring food and gas prices are putting more pressure on vulnerable communities still reeling from the pandemic.”  

Jubilee USA mobilized thousands of messages to Congress and the Trump and Biden White Houses urging student debt relief to help confront the economic crisis spurred by the coronavirus.

“While the student loan forgiveness helps those hit by the pandemic and inflation, more student debt relief will be needed,” added LeCompte. 

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Crux Features Jubilee USA Network and Eric LeCompte on Puerto Rico's Economic Crisis

Crux features Jubilee USA Network and Eric LeCompte on the topic of Puerto Rico's increasingly severe economic challenges in light of efforts in creating debt restructuring plans. Read an excerpt below, and click here for the full article.

Puerto Rico ‘at a crossroads’ as economic crisis takes toll

By John Lavenburg

“We’re at a crossroads,” Eric LeCompte, executive director of Jubilee USA Network told Crux.

“If Puerto Rico receives more economic shocks – natural disasters, the COVID-19 pandemic – without more aid or resources, it’s really going to get much worse,” LeCompte said. “On the other hand, if Puerto Rico gets the resources it needs to deal with disaster relief, child poverty, climate, to be able to support new jobs; if these things move forward not only will it help make Puerto Rico’s debt sustainable, but it will ensure there’s positive economic growth.”

Jubilee USA Network is a faith-based organization that promotes debt relief around the world. Since 2014 it has monitored Puerto Rico’s financial and debt crisis, growing child poverty rates and policy implementation and has advocated alongside Puerto Rico’s religious leaders.


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Presbyterian Mission Features Aldo Caliari on the International Community's Response to the Debt Crisis

Presbyterian Mission features an article by Aldo Caliari detailing the need for a more robust response to the debt crisis borne from the COVID-19 pandemic and Ukraine invasion, particularly from the G-20. Read a brief excerpt below, and click here for the full article.

The International Community Must Respond to the Debt Crisis

By Aldo Caliari

Paying debt service also comes at the expense of infrastructure investments critical for recovering and building resilience to climate and other shocks. Under-investment eventually takes its toll. Many weaknesses in developing countries’ response to the pandemic can be traced back to years of skimping on health and jobs infrastructure. Jubilee USA and LATINDADD’s Atlas of Vulnerability found that in all but two of the developing countries for which it has data, health spending per person is less than a quarter the average in industrialized countries. Africa, with the highest share of population affected by food crises – at 346 million – and dependent on Ukraine and Russia for a high share of food imports, is also the region most vulnerable to climate change. Lack of climate change preparedness, amidst rising floods, water scarcity and other weather-driven events, dramatically lower agricultural output and add to COVID- and war-induced food access barriers.


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Barbados Simultaneously Tackles the Challenges of Debt and Climate Change

The New York Times published an article detailing the struggle of Barbados as it faces the challenges of paying its debt to the financial institutions and being further hampered by climate change disasters, with significance to Prime Minister Mia Mottley's work on the matter. Read an excerpt below, and click here for the full story.

The Barbados Rebellion

By Abrahm Lustgarten

With Lagarde on the phone, Mottley made her pitch. Barbados, she said, was going to default on the debt it owed to private banks and investors. She wanted Lagarde’s support in persuading them to renegotiate its terms. The I.M.F. is both the assessor and the enforcer of global economic policy, the de facto gatekeeper to the world’s capital markets. Mottley knew that banks and investors would work with her only if Barbados were participating in a formal I.M.F. program for economic reform — and it had to start immediately.

Mottley told Lagarde that Barbados was prepared to do voluntarily what most countries have to be coerced to do: cut its budget and raise taxes. But she needed something in return. With the effects of climate change bearing down on the region, the kind of austerity the I.M.F. demanded from developing nations — slashing the size of government agencies and firing thousands of public employees while auctioning off real estate and other national assets — would no longer work. Mottley wanted Lagarde to endorse an economic program that would still allow her to raise salaries of civil servants, build schools and improve piping and wiring for water and power. “Before you carry people on a long journey,” she told Lagarde, “you have to give them a little breakfast.”


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Barron's Quotes Eric LeCompte on Lack of G-20 Joint Communique

Barron's quotes Eric LeCompte in an article detailing the divisions within the G-20 in inviting Russian representatives to meetings in light of the Ukraine invasion and the financial crises borne from it. Read an excerpt below, and click here for the full article.

G20 Finance Talks Overshadowed By Ukraine End Without Joint Communique

By Marchio Gorbiano

Observers said the failure to agree on a joint communique would hinder coordinated efforts to solve rising inflation and food shortages.

"The lack of a G20 finance ministers' communique means it will be more difficult for the G20 to forge a consensus on vital issues in the fall," said Eric LeCompte, executive director of Jubilee USA Network, an NGO that lobbies for developing nation debt relief.

"Internal divisions hinder the G20's ability to act decisively and leaves the world in uncharted waters."


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Jubilee USA Network Statement on G20 Finance Ministers Meeting

The G20 finance ministers concluded their meetings in Bali, Indonesia. The ministers focused on the global economy impacted by the pandemic, Ukraine war, high country debt levels and rising inflation. 

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

“The lack of a G20 finance ministers communiqué means it will be more difficult for the G20 to forge a consensus on vital issues in the fall.

"Tensions over Russia's war in Ukraine translated to the G20 failing to take more action on inflation, food shortages and pandemic response.

“Internal divisions hinder the G20’s ability to act decisively and leaves the world in uncharted waters.

“Countries lack the resources to deal with food shortages and we are concerned that the food shortages can lead to unrest.

“As more countries risk defaulting on their loans, we face more threats for stability of the global economy.

“We are waiting for the G20's debt reduction framework to be running so developing countries can receive relief to address food shortages and respond to the pandemic.

“A critical part of the G20 meetings was reviewing proposals that can increase development bank lending by hundreds of billions.

“Getting more resources to development banks would be a significant step to prevent future pandemics and food crises."

Read Jubilee USA's press release about the meetings here.  
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G20 Finance Ministers Meeting Focuses on Response to Global Economic Crises

On Friday, G20 finance ministers descend on Bali, Indonesia, to discuss a global economy impacted by the pandemic, Ukraine war, high country debt levels and rising inflation. Food shortages, climate and tax issues will also be on the agenda at the two-day talks.

“Developing countries lack the resources to confront economic crises and food shortages,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. “The G20 must act quickly to prevent a recession and address food and debt crises."

The World Bank warns that due to the impacts of the pandemic and the Ukraine war, average incomes in 40% of developing countries will remain below 2019 levels.

"Rising interest rates mean developing countries have higher debt payments just when they need to invest more to protect their people,” added LeCompte. “Countries need debt relief, not more debt."

Three countries applied to a G20 debt reduction process created in 2020 and have yet to see any debt relief.

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G7 Summit Focuses on Global Crisis Response, Ukraine War, Food Security and Climate

Leaders Urge Debt Relief for Developing Countries

African Religious Groups Call on G7 to Address Poverty

In a concluding statement of the G7 Summit in the Bavarian Alps, the group addressed the global economy, the COVID crisis, the Ukraine war, climate, debt and vaccines. Presidents and prime ministers of the G7 highlighted the urgency to improve debt relief frameworks and address debt vulnerabilities. 

"Debt relief is critical as developing countries struggle with the pandemic and food shortages due to the Ukraine war," said Eric LeCompte, Executive Director of Jubilee USA Network. “The G7 noted the importance for China and the private sector to participate in debt relief processes so developing countries can withstand current crises."

Up to 73 of the world’s poorest countries can seek debt relief through a G20 process. To date, Chad, Ethiopia and Zambia applied for the debt relief framework. 

"The G20 debt relief process needs to be implemented more quickly," stated LeCompte. "We need the process expanded to cover other countries in need like Sri Lanka."

In May, the New York State Assembly began consideration of a bill that requires private creditors, which hold the majority of developing country debt, to join in relief deals. The legislation would apply to the more than 50% of the world's private debt contracts because they are issued under New York law.

“Legislation adopted by G7 countries can ensure the private sector and commercial banks participate in debt relief,” added LeCompte.

In a statement addressed to G7 leaders, the Justice, Peace and Development Commission of the Catholic Symposium of Episcopal Conferences of Africa and Madagascar (SECAM) warned about the deteriorating debt situation on the continent.

“Worsening global conditions and rising interest rates will push more African countries to make impossible choices between saving lives and jobs or paying creditors,” stated Bishop Sithembele Siphuka, First Vice-President of SECAM and Commission Chair.

The G7 launched an infrastructure plan that plans to tackle developing countries taking on too much debt. Pledging $600 billion in developing country infrastructure by 2027, the terms and quality of projects under the Global Partnership for Infrastructure and Investment seek to keep debt levels in check.

"The G7 plan to invest in countries from Angola to the Ivory Coast means less debt and positive economic returns for developed and developing countries,” shared LeCompte. "The G7's investment in sustainable infrastructure is good news for developing countries."

Leaders focused on the global food crisis pledging an additional $4.5 billion to protect the vulnerable from hunger and malnutrition. The war in Ukraine worsened food shortages and more than 193 million people face hunger.

On climate, the G7 announced the creation of a “Climate Club." The club or group of countries would focus on actions to meet climate goals. The G7 renewed pledges to deliver $100 billion in annual funds to address climate change through 2025.

"The Ukraine war, pandemic and climate crisis are a triple threat that developing countries don't have the resources to combat,” expressed LeCompte.

Read the full G7 communiqué here

Read the African Catholic Bishops' statement to G7 leaders here.

Read Jubilee USA's press release on the New York Taxpayer and International Debt Crises Protection Act here.

Read Jubilee USA's press release on the G7 finance ministers meeting here.

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G7 Summit Focuses on Ukraine War, Pandemic, Climate, Vaccines and Debt

Gathering in Bavarian Alps, President Biden and G7 Prime Ministers Confront Global Inflation, Food Security and Economic Crises

On Sunday, G7 presidents and prime ministers begin their three-day summit under the German Presidency. Meeting at the Schloss Elmau resort, the leaders deliberate on the pandemic, Ukraine war, food shortages, vaccines and climate issues.

“We are dealing with crisis on top of global crisis,” shared Eric LeCompte, Executive Director of the religious development group Jubilee USA Network and a United Nations finance expert. “Most countries were struggling to get through the pandemic and couldn't confront the challenges of climate change. Now the Ukraine war is creating a growing food crisis for many of those same countries.”

In a petition to G7 leaders, more than 50 African religious leaders asked for relief measures for the continent struggling with food, climate and health crises. Jubilee USA worked with religious leaders in Africa on the statement. Signers of the statement include Bishops and representatives from the Catholic Symposium of Episcopal Conferences of Africa and Madagascar, Caritas Africa, the Church of Pentecost in Ghana and the All Africa Conference of Churches. In addition to other measures, the religious leaders requested “debt relief initiatives for African countries, and . . . measures, including domestic legislation, to compel full public and private creditor participation and transparency.”

Legislation currently before New York State lawmakers requires private creditors to provide debt relief at the same level that governments and public institutions provide to struggling countries. More than 60% of developing country debt is in private sector hands.

“Inflation, economic shocks and food shortages are all tied to the debt crises developing countries are facing,” stated LeCompte. “The single most meaningful commitment the G7 could make is to support legislation in G7 countries that ensures private and commercial lenders contribute to debt relief."

While debt and inflation will be key focuses of the upcoming meetings, leaders are set to endorse a global initiative for food security and a plan to address climate change.

“G7 countries hold about $400 billion in emergency pandemic currency that could be given to development banks and used to tackle climate and food challenges,” noted LeCompte.

The International Monetary Fund created $650 billion in emergency currency known as Special Drawing Rights for coronavirus relief last year. The majority of these funds were received by developed countries who can donate the funds to developing countries. Several of these wealthy countries pledged $60 billion of their Special Drawing Rights to fund IMF cheap loans to developing countries.

Read the African religious leaders' petition to G7 leaders here

Read Jubilee USA's press release on the New York Taxpayer and International Debt Crises Protection Act here

Read Jubilee USA's press release on the G7 finance ministers meeting here.

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West Orlando News Quotes Eric LeCompte on WTO Vaccine Decision

West Orlando News quotes Eric LeCompte on the recent WTO vaccine decision with regards to developing countries facing challenges in accessing vaccines. Read an excerpt below, and click here for the full story.

World Trade Organization Vaccine Decision Falls Short, Says Development Group

“For countries struggling to protect their people against continued COVID outbreaks, this decision won’t do enough,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA. “After more than two years of a pandemic that cost millions of lives, developing countries need a suspension of multiple WTO rules in order to boost access to vaccines, tests and treatments.”


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