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.
"We are writing as you prepare to certify a new fiscal plan for Puerto Rico that takes into account the devastation and immense suffering of Puerto Rico's people due to hurricanes, Irma and Maria," wrote Archbishop Roberto González, Reverend Heriberto Martinez and Reverend Enrique Camacho. "We are concerned that the current fiscal plan under debate fails to consider the serious impact of these storms. We are concerned that monies Congress authorized for healthcare and hurricane relief could be used to pay creditors."
In the summer of 2016, Congress passed emergency debt crisis legislation that created a federally appointed oversight board to implement a fiscal plan for an island that wrestles with a 58% child poverty rate. After the hurricanes struck, the oversight board withdrew their original plan in order to create a new plan to take into account the impact of the storms.
Puerto Rico's Governor submitted a new plan that the oversight board is scheduled to certify this week. The new proposed fiscal plan pays 40 cents on the dollar for debt service when the previous plan in place before the hurricanes paid 25 cents on the dollar to creditors. Governor Ricardo Rosselló and the oversight board have disagreed about implementing a debt payment moratorium and cuts to public pensions.
"Puerto Rico can not pay any debt until it recovers from the hurricanes, sees sustained economic growth and a reduction in child poverty," noted Jubilee USA Executive Director Eric LeCompte who advises Puerto Rico's religious leaders. "In addition to canceling most of Puerto Rico's debt, a new fiscal plan should prevent further austerity, curtail corruption and support adequate social protections."
In the letter that the religious leaders sent to the oversight board on Tuesday
, they called for a 5 year debt payment moratorium, for at least 80% of the total debt to be cut and urged that a focus of the plan should be to stem migration from Puerto Rico.
"We urge all stakeholders to dialogue and work together for rebirth, freedom and new life for Puerto Rico's people. Puerto Rico can be reborn after the hurricanes," stated Puerto Rico's religious leaders in their letter to the oversight board. "Puerto Rico's people can be free from debt, corruption and constraining economic policies."
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
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.