IMF Discusses $30 to $50 Billion Pandemic and Climate Response Process for Developing Countries

Washington DC – On Friday, the International Monetary Fund's Board discusses the proposed "Resilience and Sustainability Trust." The new vehicle could aid developing countries with pandemic response and challenges faced from climate change with low-interest, long-term loans. 

“The IMF proposal is another way that wealthy countries can use their surplus pandemic response funds to support developing countries struggling with the COVID crisis, poverty and climate challenges,” said Eric LeCompte, the Executive Director of the religious development group Jubilee USA Network.

The loans would come from a trust with $30 to $50 billion in assets from the IMF-created reserve funds of wealthy countries, also known as Special Drawing Rights (SDRs).  In August, wealthy countries received more than $400 billion in SDRs that could be used to support this trust and other processes for developing countries. Developing countries received about $230 billion in this relief aid. 

"Developing countries categorized as middle-income economies continue to face some of the worst poverty increases and job losses. Yet these countries are not included in many of the previous pandemic relief processes," noted LeCompte, a United Nations finance expert whose group advocated for SDRs to fight the pandemic. "An important aspect of the new trust is that it could support developing countries left out of previous pandemic processes."

Some donor countries already use their SDRs to support zero-interest loans through the IMF’s Poverty Reduction and Growth Trust, but only the poorest countries are eligible to access it.

Friday's IMF meeting reviews possible economic reforms for developing countries to access loans from the new trust.

“As the health and economic crises persist across developing countries, it would be totally unacceptable if this new process has economic reforms that hurt vulnerable communities or prevent recovery from the crisis," added LeCompte.

The IMF plans to have agreement on basic principles to guide the new trust by their April, Spring meetings.

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Congress COVID Relief, Student Loans, Puerto Rico Aid

Dear Friend,

Thanks to your partnership, Jubilee USA's campaigns on student loans, Puerto Rico and global pandemic aid and debt relief are moving forward. I'm writing to update you on these campaigns and ask you to take urgent action. 

As part of upcoming budget votes, Congress decides on Jubilee USA requests for $22 billion in pandemic response aid and debt relief for developing countries. Please call your Senators and ask them to support pandemic debt relief and aid so vulnerable communities can get through the crisis.

As we continue to move Congress on debt relief and IMF Special Drawing Rights aid, we won new action on student loans from President Biden. In the last days of 2021, Biden extended the pandemic freeze on student loan payments and interest. This happened because of the thousands of messages you sent to Congress and the Biden and Trump White Houses. We continue to work for student debt cancellation for the vulnerable and those facing economic hardship.

The news is not as good for our Puerto Rico efforts. 

We had hoped the Senate would vote in December on action passed for Puerto Rico by the House of Representatives. In the last days of the year, Senate negotiations failed to pass disability payments for 300,000 low-income people, $3.6 billion in healthcare aid and measures to increase jobs for the island. As we push for a Puerto Rico deal in the Senate, your thousands of phone calls are pushing Senators to take action as the island struggles with debt crisis, natural disasters and the pandemic.

Your partnership is critical in the coming months as some of the most consequential decisions on Jubilee USA's pandemic response campaigns will be made by the G20, IMF, G7, World Trade Organization, Congress and White House.

Lack of vaccines and the COVID-spurred health and economic crisis continue to push hundreds of millions into hunger and poverty around the world. Please take action and leave a message for your Senators as they prepare to vote on $22 billion in pandemic debt relief and aid. The Capitol Switchboard is open 7 days a week and 24 hours a day.

Thanks for taking a moment to call your Senators ahead of important budget votes.

In partnership,

Aldo

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

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Biden Extends Student Loan Payment Relief to May

Religious Group Urges Additional Student Debt Relief for Borrowers Facing Pandemic Hardship

Washington DC – In the last days of December, President Biden extended a freeze on student loan repayment until May to assist borrowers amidst the coronavirus crisis. This is the third time that Biden extended executive action began by President Trump to pause federal student loan payments and interest.

“For many struggling borrowers, the canceling of interest and deferring student loan payments is a crucial source of aid,” noted Jubilee USA Network Executive Director Eric LeCompte. “For vulnerable communities and people struggling with the pandemic and economic hardship, we will need to eliminate more of their student debt.”

Jubilee USA Network generated 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. The pause in interest benefits 41 million people. Almost 27 million borrowers have not made payments since the program began.

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IMF Extends Debt Cancellation for Poorest Countries into April

Washington DC – The IMF extends debt payment relief for 25 countries through April 2022. The IMF's Catastrophe Containment and Relief Trust (CCRT) was activated early in the pandemic to provide debt relief and aid for the world's poorest countries. In all, 29 countries received nearly one billion dollars in relief.

“Debt relief remains a critical part of the global pandemic response,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. “Debt relief has helped countries respond to the health and economic crises. More debt relief will be needed for many developing countries.”

The IMF CCRT debt relief process was initially used for disaster-hit Haiti and then three African countries responding to Ebola. As the CCRT provided debt relief since the dawn of the pandemic, after the next phase of relief - CCRT resources will be depleted to $95 million.

“More commitments and donations are essential to provide debt relief for developing countries struggling with the pandemic,” added LeCompte. 

Read the IMF release on the CCRT extension here.

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Donors Announce $93 Billion in COVID and Development Aid for Poorest Countries

Washington DC – A World Bank fund that aids the poorest countries will receive $93 billion over the next three years. The International Development Association (IDA) announcement came Wednesday at the end of a two-day donor pledging meeting in Tokyo.

“As poor countries struggle with the pandemic and high levels of debt, they need more support,” said Eric LeCompte, the Executive Director of the religious development organization Jubilee USA Network. "Religious groups pushed world leaders to increase humanitarian aid for developing countries struggling with the pandemic."

The US Conference of Catholic Bishops and Jubilee USA Network wrote a joint letter to President Biden in February urging additional funds for IDA and other development lenders to respond to increased COVID-spurred needs.

“The committed donations are important as these countries need to spend more on social needs and climate challenges," stated Jubilee USA's Aldo Caliari, the group's Senior Director of Policy.

IDA normally receives new funds every three years. The IDA replenishment is the 20th in its history and was originally scheduled for 2023 but rapid depletion of the previous one due to the COVID crisis, prompted donors to advance new funding by one year. The new IDA commitments were 13% higher than the previous replenishment. The Tokyo meeting was the last of four donor meetings to negotiate contributions.

“More money for IDA is good news,” added LeCompte. "As we continue to confront the global health and economic crises, developing countries will also need debt relief and other sources of aid."

Major US churches and international religious groups also signed a letter that Jubilee USA coordinated to the White House, G20 and IMF calling for additional aid to confront the pandemic. The nearly 300 signers included the Union for Reform Judaism, the Unitarian Universalist Association and the Episcopal, Evangelical Lutheran, Presbyterian, Methodist and United Church of Christ Churches.

Read Jubilee USA and the US Conference of Catholic Bishops joint letter to the White House here.

Read Jubilee USA's COVID response letter calling for additional aid and development bank support with nearly 300 signatories here.

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White House Hosts Democracy Summit and Highlights Global Anti-Corruption Commitments

Treasury Releases Draft Rule Improving Transparency for "Anonymous" Shell Companies

Washington DC – More than 100 leaders showcase initiatives to counter dictatorships, fight corruption and promote human rights at a virtual summit the White House hosts December 9-10. 

“The White House meetings are incredibly important as we must make sure that pandemic relief aid gets to the people who need it most around the world,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. “Democracy and civic participation are powerful forces that can prevent corruption and hold leaders accountable during a crisis."

In advance of the summit, the US released a strategy to counter corruption.

“A critical part of the US anti-corruption strategy is stopping tax evasion and avoidance at home and abroad,” added LeCompte.

The US strategy follows a National Security Study Memorandum that President Biden issued to lead efforts to strengthen transparency for the US and international financial system.

On Wednesday, Treasury released a draft rule to enforce higher transparency in shell companies. The rule comes after Jubilee USA Network worked for more than 10 years on legislation that requires companies to disclose their true owners. The Corporate Transparency Act passed in January and Treasury shared the draft enforcement rule ahead of the White House summit.

“Treasury’s transparency rule takes us closer to ending the use of anonymous shell companies to support corrupt regimes and criminal networks,” shared LeCompte.

Jubilee USA organized nearly 300 religious, human rights, labor and environmental organizations to advocate that the Administration uses its voice in the G20, G7, IMF and United Nations to promote transparency and accountability in COVID crisis relief measures.

“Corruption is always an enemy of poor and vulnerable people," stated LeCompte. "For more than 20 years, we've worked with Republican and Democratic Administrations to strengthen transparency and promote citizen empowerment in the debt relief and aid we've won for developing countries."

The Biden Administration announced a second summit in a year's time to evaluate the implementation of the summit commitments.

Read Treasury's transparency rule here.

Read Jubilee USA's Corporate Transparency Act letter supported by over a hundred groups here.

Read Jubilee USA's COVID-19 White House, IMF, G20 Letter with 286 supporting groups here

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Global Pandemic Aid for Developing Countries is Focus of High-Level Event

Washington DC – On Wednesday, a high-level panel explores the role of IMF emergency currency or Special Drawing Rights in pandemic recovery. The event, Special Drawing Rights and Global Pandemic Recovery, is convened by Jubilee USA Network and features Ambassador Sam Brownback, former US Senator and US Ambassador at Large for International Religious Freedom, Africa Union Ambassador Hilda Suka-Mafudze and President of Bread for the World, Reverend Eugene Cho.

“We need to do more to address the health and economic crises spurred by the coronavirus," shared Jubilee USA Executive Director Eric LeCompte. LeCompte will introduce and moderate the panel. “The event focuses on a type of aid that countries can use for pandemic recovery.”

In August, the IMF issued $650 billion in Special Drawing Rights (SDRs) or emergency currency for countries to address the coronavirus crises. More than $400 billion of the aid went to wealthy economies, with the US receiving $113 billion. Wealthy countries can transfer their unused SDRs to countries in need.

“Already this aid is making a difference for countries responding to the crisis,” added LeCompte. "Wealthy countries can share the SDRs they won't use with developing countries."

The IMF accepts SDRs from countries to finance zero-interest loans for the poorest countries. Another IMF vehicle under development will accept SDR contributions to assist developing small states and vulnerable middle-income countries. Recent research released by Jubilee USA Network and LATINDADD determined the emergency currency can help overcome pandemic-related weaknesses in 24 Latin America/Caribbean countries.

To receive a link to ask questions and virtually attend, "Special Drawing Rights and Global Pandemic Recovery," register here. Alternatively, you can join through Facebook Live: https://www.facebook.com/jubileeusa/

Read about Jubilee USA's research on SDRs and pandemic challenges facing Latin and Caribbean countries here.

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Climate Home News Quotes Aldo Caliari on Special Drawing Rights

Climate Home News quoted Aldo Caliari on China's recent commitment to donate a quarter of its IMF pandemic recovery funds, known as Special Drawing Rights, to African countries. Read an excerpt below or read the full article here.

China ‘trumps’ the west by pledging larger share of IMF relief to African nations

In his opening speech to the Forum on China-Africa Cooperation (Focac) in Senegal, president Xi Jinping pledged to donate 600 billion doses of Covid-19 vaccines and redistribute $10 billion worth of rare IMF reserve assets, known as special drawing rights (SDRs), to African countries. China’s allocation of 29bn SDRs is worth about $40bn.

“It puts pressure on western donors. It will be difficult for advanced economies to justify that they are not in a position to contribute that share when China is able to do it,” Aldo Caliari, of the Jubilee USA Network, an NGO which advocates for debt relief, told Climate Home News.

The IMF injected $650bn of SDRs into the global economy in August to help countries recover from Covid-19 by buying vaccines, alleviating debt and investing in sustainable development.

 

Read more here.

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New COVID Variant Forces Postponement of World Trade Ministers Meeting

Meeting Agenda Had Included Vaccine Access for Developing Countries

Washington DC – The World Trade Organization postponed a meeting where trade ministers planned to decide on vaccine access and production issues for developing countries. The meeting, scheduled for Geneva, Switzerland, was canceled because of new travel restrictions due to the COVID Omicron variant. Waiving pharmaceutical company patents on COVID vaccines and treatments featured prominently on the agenda.

“The World Trade Organization can help ensure that everyone around the world can access coronavirus vaccines and treatments," said Eric LeCompte, the Executive Director of the religious development organization Jubilee USA Network. "In spite of the lack of an in-person ministers meeting, the WTO can still take action on waiving vaccine patents."

The highest WTO decision-making body in between ministerial meetings is the General Council.

The IMF estimated that failure to achieve a 70% vaccination rate globally by mid-2022 will result in more than $5 trillion in global economic losses over the next five years. While vaccination rates in high-income countries approach 70% of the population, less than 5% of people in low-income countries received even one dose, according to a group of World Health Organization experts.

"Distributing vaccines is essential to stop food shortages and prevent economic shocks," stated LeCompte.

In the summer, Jubilee USA organized leaders of the Catholic, Methodist, Episcopal, Lutheran, Presbyterian and United Church of Christ Churches and AFL-CIO to meet US Trade Representative Ambassador Katherine Tai on the vaccine and trade proposals. Tai supports temporarily waiving COVID vaccine patents. 

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Call the Senate: Urgent Puerto Rico Healthcare, Jobs, Poverty Relief

Call the Capitol Switchboard at 202-224-3121 and ask for your Senators. You will need to call twice to reach each of your US Senators. The switchboard is open 24 hours a day and 7 days a week to leave a message for your Senator.

If you need help finding your Senators, you can ask the Capitol Switchboard attendant by telling them in what state you reside or use this link.

Once you are connected, ask to leave a time-sensitive message for your Senator.

"Thank you for taking my call. I live in your state, my name and address is______________. The Build Back Better Act contains provisions that will help Puerto Rico recover from debt crisis, natural disasters and tackle a nearly 60% child poverty rate. I want the Senator to promote recovery and opportunity for the people of the island by:

1.) Supporting Supplemental Security Income payments that could benefit more than 300,000 low-income people; 

2.) Support child tax credits and fully fund a permanent expansion of the healthcare Medicaid program;

3.) Passing measures to increase manufacturing jobs in Puerto Rico."  

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National Catholic Reporter Praises Jubilee USA's Support for Puerto Rico

The National Catholic Reporter praised Jubilee USA's work in support of more social services funding for Puerto Rico. Read an excerpt below and find the full article here.

Links: The Rittenhouse verdict; Catholic Worker reaction to Archbishop Gomez; Bosnia on the verge of breakup

Our friends at Jubilee USA are not exactly unsung heroes: Many people know of their good work. But the special interest they have shown for the suffering of the people of Puerto Rico, combined with both their expertise about fiscal issues and their deep commitment to Catholic social doctrine, has made the organization a real hero to the island's people. This press release, with links to their letter to members of Congress, looks at the provisions of the Build Back Better bill, which will help alleviate the poverty in Puerto Rico.

Read the full article here.

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House Build Back Better Act Supports Puerto Rico

Washington DC – The House of Representatives voted to increase Medicaid funding and incentives to support manufacturing jobs in Puerto Rico as part of the Build Back Better Act.

“This legislation means that Puerto Rico can access more resources that the island desperately needs,” said Eric LeCompte, Executive Director of Jubilee USA Network, which worked on debt and disaster relief for the island since 2015. "Faced with high poverty rates, debt crisis and natural disasters, Puerto Rico can really use the aid."

The Build Back Better Act provides Supplemental Security Income disability payments to Puerto Rico, benefiting 300,000 Puerto Rico residents. The bill includes the territory in child tax relief increases for the states. The legislation now heads to the Senate and if passed could be enacted into law this year.

In February, 20 major religious leaders representing Catholic, Methodist, Lutheran, United Church of Christ and Evangelical Churches wrote to President Biden to support Puerto Rico. Leaders of the National and Puerto Rico Council of Churches, Catholic Charities and the General Bible Society also signed the letter to Biden.

Read the Jubilee USA Puerto Rico and US Religious Leaders Letter to President Biden here.

Read the Puerto Rico Religious Leader Stimulus Letter to Congress here.

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