The International Monetary and Financial Committee of the IMF released their communiqué of the Spring meetings, noting, "The window of opportunity remains open and should be used expeditiously to advance policies and reforms that sustain the current upswing, enhance resilience, and raise medium-term growth for the benefit of all." The IMF raised serious concerns this week that the global economy is in for a "bumpy road ahead."

Eric LeCompte, the Executive Director of the religious development group Jubilee USA, has monitored IMF meetings for 10 years and releases the following statement:

"On the anniversary of the 2008 financial crisis, the IMF issued a series of warnings about the future of the global economy. 

"We still have not done enough to improve debt restructuring and enact measures for responsible lending and borrowing. Beyond preventing the next crisis, the IMF is warning that we could have a recipe for greater inequality that further divides the rich and the poor.

"The IMF is saying that now is the time for countries to get their houses in order to prevent and prepare for future financial crises. The IMF is warning that rising debt levels are a growing risk around the world."

Read the April 2018 Communiqué of the International Monetary and Financial Committee

Read the April 2018 World Economic Outlook

Read the International Monetary Fund's April 2018 Global Financial Stability Report

Read about the Thursday IMF event on the 10th Anniversary of the Financial Crisis

Read about Jubilee USA's Friday event on Global Renewal and improving debt restructuring 

Archbishop Roberto Gonzalez, Reverend Heriberto Martinez and Reverend Enrique Camacho, religious leaders from Puerto Rico and Eric LeCompte, Executive Director of Jubilee USA wrote and Op-ed featured in The Hill called "Human lives must be focus of Puerto Rico fiscal plan" talks about need of a fiscal plan that focuses on the people in need.

Read excerpt below and follow link to the full article.

Human lives must be focus of Puerto Rico fiscal plan

By: Archbishop Roberto Gonzalez, Reverend Heriberto Martinez, Reverend Enrique Camacho, and Eric LeCompte

As Puerto Rico continues to wrestle with power outages across the island, the federally appointed Financial Oversight and Management Board soon votes on a fiscal plan for economic growth. We are concerned that the current proposed fiscal plans fail to focus on improving and protecting the lives of 3.5 million U.S. citizens living in Puerto Rico.

A final fiscal plan should meet the following criteria:

• There should be "breathing space" for the island from debt payments. Earlier proposed fiscal plans included a 5 year moratorium on all debt payments. This debt payment moratorium should be part of the new plan. Additionally, during this period interest must not accrue on the debt.
• Beyond this five year debt moratorium period, no debt should be paid until Puerto Rico sees positive economic growth, a reduction in child poverty and the island has rebuilt from the hurricanes.
• Ultimately, the total debt must be restructured and the principal of the debt must be cut. The fiscal plan should reflect the need for definitive debt cancellation of at least 80 percent of Puerto Rico's debt.
• The fiscal plan should prevent further austerity measures, set goals to reduce child poverty, ensure adequate social protections, defend against corruption and stem migration from the island. 

Eric LeCompte, Executive Director of Jubilee USA was recently cited in Bretton Woods speaking on the current financial crisis. This discussion was held at the International Monetary Fund/ World Bank Spring Meeting Civil Society Forum event. Read the excerpt below and follow the link to full article.

Financial crisis 10 years on. Has the response to 2008 laid the foundations for the next?

By: Miriam Brett

Since January in the USA, there has been an attempt to repeal financial regulation measures put in place following the financial crisis.

The proposed repeal of section 1504 of the Dodd-Frank Act – also known as Cardin-Lugar anti corruption law – poses a significant threat. This is the portion of the legislation that called for greater transparency, recording payment processes, which acted as an anti-bribery law and covered areas such as illicit financial laws, tax evasion, and corruption. 1504 was under sustained attack and repealed in the House of Representatives.

This was significant as it had been used as a model for regulation and legislative measures post crisis, and a consensus was brought about on this.

A model law could offer a different approach and a legislative remedy to deal with 51 per cent of where the world’s debt stock is marketed. The US and UK have between an 85 and 90 per cent share of the debt market, and Germany, Singapore and Japan also charting high.

There is a possibility to change New York law as a model law, to say that if ¾ of investors agrees to a structuring, we have to move things forward for debt to be arbitrated, which could offer a viable and clear path forward.

Read more here.

Metro Puerto Rico covers a letter form Religious Leaders in Puerto Rico to the Financial Oversight and Management Board.  Eric LeCompte, Executive Director of Jubilee USA was also featured in the article. 

Read excerpt below and follow link to full article.

Religiosos hacen peticiones a la Junta en nueva carta:Los religiosos enviaron hoy la carta a la Junta de Control Fiscal

By: Metro Puerto Rico

Por su parte, Eric LeCompte, director ejecutivo de Jubilee USA, expuso en una comunicación escrita que "Puerto Rico no puede pagar ninguna deuda hasta que se recupere de los huracanes, ve un crecimiento económico sostenido y una reducción de la pobreza infantil". "Además de cancelar la mayor parte de la deuda de Puerto Rico, un nuevo plan fiscal debería evitar una mayor austeridad, reducir la corrupción y respaldar protecciones sociales adecuadas", agregó.

Finalmente, Jubilee USA indicó que en la carta que los líderes religiosos enviaron a la Junta el martes, pidieron una moratoria de pago de la deuda de 5 años. "Instamos a todas las partes interesadas a dialogar y trabajar juntas por el renacimiento, la libertad y la nueva vida para la gente de Puerto Rico".

As Puerto Rico's oversight board considers a fiscal plan, major religious leaders say the final plan should cut debt, prevent austerity and reduce child poverty. San Juan's Catholic Archbishop, Puerto Rico Evangelical Bible Society leader and the Executive Director of the island's Catholic Charities sent a letter to the oversight board.

Read the full religious leader letter

Lea la carta completa del líderes religiosos

Global Renewal: Debt Relief and Financial Investments Towards a Sustainable Future

What: IMF/World Bank Spring Meetings Panel

Debt crises and rising debt levels pose challenges to global growth and sustainable economies. Market fluctuations, commodity issues and natural disasters press countries to borrow. Countries across Africa and Caribbean islands like Puerto Rico are struggling with unsustainable debt. We will discuss solutions for economies faced with debt crisis.

Who: Mark Flanagan, IMF Debt Policy Division; Reverend Heriberto Martinez, Puerto Rico Bible Society; Bodo Ellmers, EURODAD; Tirivangani Mutazu, AFRODAD and Eric LeCompte, Jubilee USA Network (moderator)

Sponsors: Jubilee USA Network and AFRODAD

When: April 20, 2018
2:00 - 3:30 pm
Where: IMF/World Bank Spring Meetings
IMF HQ2
Room 03B - 838B

Eric LeCompte, Executive Director of Jubilee USA was recently featured in the National Catholic Reporter speaking on Puerto Rico's fiscal future. Read excerpt below and follow link to full article.

Puerto Rico needs bold, visionary effort, especially in energy

By: Michael Sean Waters

Beyond the challenges inflicted by the hurricane, the fiscal crisis has only worsened. "Early last year, Puerto Rico's oversight board and governor authorized a fiscal plan with high debt payment cuts and austerity measures," Eric LeCompte, executive director of JubileeUSA told NCR. JubileeUSA has been very active monitoring the debt crisis negotiations. "When the hurricanes hit, the oversight board eliminated the previous plan to make room for a new plan that took into account the storm devastation. As we were working on a new fiscal plan early this year, there were some serious improvements, including a complete stop on debt payments." For a variety of reasons, Puerto Rico’s public debt soared in the past 10 years as economic activity on the island never rebounded from the 2008 recession and the phasing out of special tax breaks for manufacturing on the island in 2006. 

"Unfortunately, the governor's most recent plan looks largely similar to the plan before the hurricanes and doesn't stop debt payments or take into account the magnitude of hurricane damage," says LeCompte. "In the next few weeks, the oversight board will likely certify a new fiscal plan and we need to be sure that a new plan stops all debt payments for at least five years, supports a high total principle cut of the debt, lessens austerity and has specific measures to only pay debt in the future if we see sustained economic growth and child poverty reduction." 

LeCompte is also worried that Congress may not authorize the reconstruction money the island needs. "Puerto Rico can't succeed if Congress does not authorize the remaining recovery funds the island needs," he told me. "We continue to work with congressional leadership to get the remaining installments of relief aid over the coming months." 

Read more here.

Eric LeCompte, Executive Director of Jubilee USA was recently featured in ValueWalk speaking on Puerto Rico's debt. Read excerpt below and follow link to full article.

Puerto Rican Debt Negotiations At Critical Crossroads

By: Mark Melin

Eric LeCompte, Executive Director of Jubilee USA, a debt relief advocacy group, told ValueWalk negotiations have become “a Kabuki dance over what should and should not be in the plan.”

The fiscal plan will set the framework for a final solution, which could occur through two routes.

One solution can occur through direct negotiations between all interested parties, including creditors. The other is for Judge Laura Taylor Swain, who was appointed to supervise the bankruptcy process, to issue a ruling on the final settlement. The negotiation process includes input from creditors while Judge Swain, who has shown a propensity to side with those advocating debt relief, is not required to negotiate with creditors.

Pushing for a solution comes as US lawmakers authorized Promesa in June 2016 to create a board and iron out a turnaround plan which, to date, has not materialized.

LeCompte, who negotiated with Congress to set up the current process and advocates against austerity measures until hurricane relief is complete, would like to see a long-term solution. He advocates creating a new type of bond that increases its payout to investors as the economy picks up steam but automatically suspends debt payments if or when another natural disaster occurs.

If a permanent solution is created that gives investors an extra payout during times of strong economic growth it would set a precedent. Currently being discussed are solutions where a Puerto Rican bond might pay 6% or 7% during “normalized” conditions. If the economy improves beyond clear benchmarks investors might receive 10%, LeCompte said. But if a natural disaster were to occur, the bond payments would be halted until the humanitarian crisis subsides.

At issue in negotiations are government workers taking a 10% cut in their pensions while creditors might take an 80% cut in their payments until the current hurricane relief program is complete.

“If we don’t get it right, if Puerto Rico doesn’t get back to economic growth, no one wins,” LeCompte said. “Consumers need to consume in order for an economy to grow and there can only be promise if good economic policies are in place.”

Read more here.

Friends -

Eric LeCompte
Executive Director
Jubilee USA Network
[email protected]

Twitter: @Eric_LeCompte
www.jubileeusa.org/support-us

Jubilee USA Network
212 East Capitol St NE - Washington, DC 20003
(202) 783-3566 - [email protected]