Common Dreams quoted Eric LeCompte in an article regarding the Puerto Rico Debt Plan. Read an excerpt and the full article here.
Critics Warn Puerto Rico Debt Plan Will Lead to More Austerity
By Julia Conley
Progressives and anti-austerity campaigners on Wednesday were wary of a federal judge's ruling which wiped out 80% of Puerto Rico's debt—the product of four years of negotiations between the U.S. territory's government, creditors, and a fiscal control board that Puerto Ricans derisively call "la junta."
Executive Director Eric LeCompte comments "We remain concerned by some of the assumptions of the debt deal. The island's ability to resume growth and avoid cuts in anti-poverty programs are both chief concerns".
Puerto Rico's debt exceeded $70 billion and it owed $55 billion in unfunded pensions when it entered bankruptcy in 2017. Its debts were partially brought on by decades of lost tax revenue after the U.S. Congress repealed a tax break for businesses on the island in 1976.
Jubilee USA said while "there is room for optimism, only time can tell if the debt cuts were deep enough to prevent Puerto Rico from needing another debt restructuring in a few years."
Washington DC –Against the backdrop of pandemic-caused economic shocks and social disruptions, the World Economic Forum hosts world and business leaders for its annual meeting. Headquartered in Davos, Switzerland the mission of the forum is to foster global economic cooperation. The January 17th through 21st meetings take place virtually for the second year in a row.
“As new virus variants emerge, the global economy faces increasing uncertainty," noted Eric LeCompte, a United Nations finance expert and Executive Director of the religious development group Jubilee USA Network. Jubilee USA Network monitors the work of the World Economic Forum. “Inflation, supply chain disruptions, growing social discontent and the lack of recovery in developing countries are all big concerns at this year's forum."
The World Bank projects half of developing countries will spend less in 2023 than they did in 2019. On January 1st, 46 countries benefiting from a G20 pandemic-related debt payment suspension initiative had to resume debt payments.
"Developing countries are struggling with rising debt levels and revenue loss," stated LeCompte. "With no certain recovery in sight, parts of the private sector are wrestling with economic losses during the Davos meetings."
Washington DC –The judge in charge of Puerto Rico's bankruptcy, Laura Taylor Swain approved a debt restructuring settling $35 billion in debt. Negotiations involved the island's government, its creditors and a federal oversight body over the past four years.
“Puerto Rico's debt payments are now reduced by two-thirds,” said Eric LeCompte, Executive Director of Jubilee USA Network. With Puerto Rico religious leaders, Jubilee USA advocated for debt and disaster relief for the island since 2015. “We remain concerned by some of the assumptions of the debt deal. The island’s ability to resume growth and avoid cuts in anti-poverty programs are both chief concerns."
The $35 billion Puerto Rico debt deal means that bondholders receive $7 billion in cash and other benefits.
“While there is room for optimism, only time can tell if the debt cuts were deep enough to prevent Puerto Rico from needing another debt restructuring in a few years,” cautioned LeCompte.
An act of Congress put in place a federal oversight board in 2016 that worked on the bankruptcy process. The oversight board remains on the island until Puerto Rico can show four years of balanced budgets.
Available for interview: Eric LeCompte, Executive Director
Contact: Mizraim Belman Guerrero, Communications and Outreach Director
[email protected] / (202) 430-6975
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.
Senior Director of Policy and Campaigns
Jubilee USA Network
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.
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.
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.
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.
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.