As Atlantic Region Braces For Another Damaging Hurricane Season, Concern Grows: Islands are unprepared as forecasters predict three hurricanes again

Eric LeCompte, Executive Director of Jubilee USA was recently featured in a video speaking on the Financing for Development meetings at the United Nations last week in New York with Reverend Osbert James. Read excerpt below and follow link to full video.

“Moving Forward on Debt and Debt Sustainability: With a special focus on the situation of Caribbean Countries”

On the sidelines of the 2018 FfD Forum, FES and partners have teamed up to present a luncheon and roundtable - with a special focus on the situation of Caribbean countries - to discuss sovereign debt & debt sustainability.

The 2018 FFD draft outcome document calls for movement toward a global consensus on guidelines for debtor and creditor responsibilities in borrowing by and lending to sovereigns, building on existing initiatives. UN Member States are requesting the Inter-agency Task Force – in its 2019 report – to carefully analyze these initiatives, as well as to advance the analysis of state-contingent debt instruments, GDP-linked bonds, insurance coverage and other innovative mechanisms, as a means of reducing risks to sovereign balance sheets, particularly in SIDS, LDCs, LLDCs and open economies more vulnerable to disasters.

To take meaningful steps toward a global consensus on sovereign debt sustainability ahead of next debt crisis, against which the IMF and Civil Society Organisations, are raising their warnings, it is imperative that stakeholders move quickly to identify 1) where there is already agreement (such as on causes, if not solutions to crises, on concerns regarding predatory behavior, on the need to improve restructuring procedures), 2) where there is possible agreement (such as on illicit financial flows, or on the need to turn external debt into an instrument of support in case of natural disasters), and 3) where there is a lack of agreement (such as the design of an improved debt restructuring regime).

On the sidelines of the 2018 Financing for Development Forum, the Permanent Mission of Antigua and Barbuda, Friedrich-Ebert-Stiftung (FES), erlassjahr.de, and Jubilee USA have teamed up to present a luncheon and roundtable, which was held under Chatham House Rule, to discuss – with a special focus on the situations of Caribbean countries, who have suffered serious natural disasters in recent years –different views and perspectives on what is needed to move forward within the multilateral system on sovereign debt and debt sustainability. In addition to representatives from the co-organizers, the discussion was attended by representatives of UN Member States, as well as members of the secretariat of the FFD Office, UNCTAD and the IMF.

Eric LeCompte, Executive Director of Jubilee USA was recently featured in Devex speaking on the Financing for Development meetings at the United Nations last week in New York. Read excerpt below and follow link to full article.

UN financing forum sees focus on debt relief for vulnerable Caribbean nations

So far, there is no specific debt relief action plan for the Caribbean region, but it’s something to watch for at upcoming global summits, including the opening of the U.N. General Assembly in the fall, said Eric LeCompte, the executive director of the Washington, D.C.-based Jubilee USA Network.

“We see a consensus emerging about the need for a debt relief process for Caribbean islands to protect them from hurricanes and other natural disasters,” LeCompte said. “What people are really talking about now, is how do we have a permanent process in place that looks to structure and relieve debt after a crisis occurs?”

“There is momentum with the hurricane season, trying to get anything in place,” LeCompte explained. “I’ve been doing this for a long time and I have never seen a moment where global decision makers are taking the situation as seriously as they are now. The seriousness is incredibly significant. If Jamaica gets hit by a Category Five, what does that do to the entire region?”

Read more here. 

Eric LeCompte, Executive Director of Jubilee USA was recently featured in ValueWalk speaking on global debt following the Spring International Monetary Fund and World Bank meetings in Washington, D.C. and the Financing for Development meetings at the United Nations last week in New York. Read excerpt below and follow link to full article.

At UN Meetings, Global Leaders Raise “Undiplomatic” Concerns Regarding Debt

By: Mark Melin

For the past ten years, the global economy has been growing and on a sustainable path, the IMF has reported in typically polite and diplomatic language. But the warnings contained in recent reports have been the focus of concerned global leaders attending UN meetings in New York this week, said Eric LeCompte, Executive Director of Jubliee USA and a UN consultant on sovereign debt.

LeCompte, attending the UN meetings, said that discussions were “less diplomatic” than normal as concerns were raised that a debt crisis could materialize if steps are not taken to avert the problem.

Looking at the emerging world economy, sovereign debt has reached levels where it is becoming non-productive. In areas such as Africa, for instance, debt to GDP levels is reaching 55%, up from 30%. “When debt in the developing world reaches 55%, the increased debt is used to make interest payments and does not go directly into the Economy,” LeCompte notes.

As the IMF looks at the financial landscape, it sees debt levels moving to unsustainable levels and speculative financial behavior, led by the roll-back of Dodd-Frank legislation, creating a toxic brew. “This is the formula that ushered in the 2008 financial crisis,” LeCompte said, noting his surprise that the IMF would be considering a universal basic income at the same time they are expressing serious concern over debt levels. He said concerns over rising populism, particularly if there is an economic downturn, are driving the IMF to get ahead of the issues.

Read more here. 

Eric LeCompte, Executive Director of Jubilee USA was recently featured in All Africa speaking on global debt. Read excerpt below and follow link to full article.

Ghana: IMF Warns Ghana Over Financial Crises

By: Felix Dela Klutse

"IMF sees continued economic growth, but it's warning that continued growth is short lived," Executive Director of Jubilee USA, Eric LeCompte, has stated during the 2018 Spring Meetings of the IMF and the World Bank Group in Washington DC, USA.

He continued: "Rising debt levels are a growing risk around the world. Now is the time for countries to get their houses in order to prevent and be prepared for future financial crises."

Mr LeCompte said countries need to rebuild fiscal buffers, enact structural reforms, and steer monetary policy cautiously in an environment that is already complex and challenging in order to prevent any future financial crises.

Read more here.

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".