IMF Coronavirus Action: Protect Vulnerable, Prevent Financial Crisis

Friends,

The coronavirus impacts all of us.

My family and all of us at Jubilee USA are holding you and our world in prayer. Please keep us and our vital mission in your thoughts and prayers as well.

As the coronavirus takes lives, impacts the markets, affects health care and drives a potential global financial crisis – will you sign our urgent IMF petition to cancel debt and expand aid to bolster healthcare for countries affected by Covid-19?

When you sign our petition, you urge actions that can protect all of us from financial crisis, lift the vulnerable and ensure our world emerges to be more resilient in the face of this pandemic.

Because of our work together, we created global processes to bolster healthcare in the developing world when disaster strikes and deathly diseases spread. Ten years ago, when earthquakes decimated Haiti, we moved the International Monetary Fund to create a process to relieve Haiti’s debt and strengthen Haiti’s health and education systems. In 2014, as the Ebola epidemic devastated Guinea, Liberia and Sierra Leone, we successfully transformed that IMF process. The Catastrophe Containment and Relief Trust created innovative healthcare grants, debt relief and hundreds of millions of dollars to fight Ebola and put better clinics in place.

Yesterday the head of the IMF told the G20 she wanted to raise the capacity of this catastrophe relief process that can help poor countries wrestling with the health and economic impacts of the coronavirus.

This is very welcome news.

Now we need your help to ensure that more countries can access this and other IMF processes that deliver aid, cancel debt and help our world mitigate the economic and health impacts of the coronavirus. Our petition calls for debt payments to stop while countries battle the coronavirus and its economic impacts.

And yesterday - the President of the World Bank encouraged the G20 to stop debt payments for very poor countries.

African Finance Ministers called for suspension of debt payments to free up $44 billion to fight Covid-19. Ecuador's Congress also demanded its government stop paying debt.

On Monday, the leadership of Jubilee USA wrote the head of the IMF and urged:

  • Bolstering healthcare in developing countries affected by Covid-19 by increasing debt relief and aid through the Catastrophe Containment and Relief Trust and other expanded processes

  • Mobilizing additional financing resources to support all countries impacted by the economic and health impacts of the coronavirus

  • Enhancing debt restructuring, issuing debt payment moratoriums and creating expedient debt reprofiling processes for countries impacted by the coronavirus

  • Advising countries to emerge from the crisis with more resilience by encouraging policies and agreements to increase protections for the vulnerable, instill greater public budget transparency, implement financial crisis and market protections, promote responsible lending and borrowing and curb corruption and tax evasion

 Jubilee USA's executive committee, Reverend Steve Herder, Celeste Drake, Rabbi Matthew Cutler, Reverend Aniedi Okure and myself noted in our letter to the head of the IMF:

"Economic forecasts warn that a possible financial crisis or depression, spurred by the coronavirus, could be worse than the 2008 financial crisis. Nearly 100 million people, mostly women and children, were pushed into extreme poverty and 22 million jobs were lost worldwide in the 2008 crisis. The International Labor Organization says the numbers of jobs lost could surpass 50 million as a result of a new, deeper financial crisis... A well-designed, globally-coordinated response from the international community can go a long way to prevent and mitigate the impacts of the Covid-19 crisis and move us towards a recovery path."

Please join us now and urge International Monetary Fund action.

In the coming days and weeks, Jubilee USA will offer more analysis and recommendations for US and international decision makers. More than ever, we are counting on you to take action and join our campaigns.

With our voices joined together, we can recover from this moment and build a more resilient global community.

In hope,

Eric LeCompte

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Amidst Covid-19 Spread, IMF and World Bank Signal Debt Relief for Poor Countries

Developing Countries Demand Debt Payments Stop

Washington, DC -  On Monday the heads of the IMF and World Bank stated support for debt relief for very poor countries as the coronavirus spreads. African Finance Ministers called for suspension of debt payments to free up $44 billion to fight Covid-19. Ecuador's Congress also demanded its government stop paying debt.

"Countries need to prioritize fighting Covid-19 and billions can be freed up right away by halting debt payments," stated Eric LeCompte who leads the development group Jubilee USA and serves on United Nations debt expert groups. "Both among lenders and borrowers, we see growing calls to stop paying debt to save lives during the pandemic."

At G20 Finance Minister and Central Bank meetings on Monday, World Bank President David Malpass encouraged world leaders to allow very poor countries to stop paying debt. At the same meeting, the IMF's leader, Kristalina Georgieva noted the replenishing of funds in an IMF debt relief and aid mechanism that was used during the 2014 Ebola epidemic that struck 3 African countries.

"The IMF and World Bank calls for debt relief are critical in order to immediately strengthen health systems in the developing world," stated LeCompte. "In order to support all countries who need help and stop a global financial crisis we will need to broaden debt relief efforts, raise aid monies and move forward agreements that can stabilize the economy."

The leaders of LeCompte's organization, Jubilee USA, sent a letter to the head of the International Monetary Fund on Monday to take action to stop negative economic impacts of the Covid-19 virus.

The letter urges expanded debt relief and aid to bolster health-care for developing countries impacted by the coronavirus. Additional letter recommendations include debt payment moratoriums, improved debt restructuring, encouraging public budget approval processes for countries and raising revenue by curbing corruption, tax evasion and tax avoidance.

Read Jubilee USA's Letter to IMF on COVID-19 here
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Jubilee USA Urges Immediate IMF Covid-19 Action

Religious Development Group Proposes Solutions for Pandemic Economic Impacts

Washington, DC - The leadership of a religious development group wrote the head of the International Monetary Fund, Kristalina Georgieva, to help stop negative economic consequences of the Covid-19 virus.

“Economic forecasts warn that a possible financial crisis or depression, spurred by the coronavirus, could be worse than the 2008 financial crisis,” warned the letter sent on Monday to the IMF from Jubilee USA's executive officers, Celeste Drake, Reverend Steve Herder, Rabbi Matthew Cutler, Reverend Aniedi Okure and Eric LeCompte. “Nearly 100 million people, mostly women and children, were pushed into extreme poverty and 22 million jobs were lost worldwide in the 2008 crisis.”

The letter urges expanded debt relief and aid to bolster health-care for developing countries impacted by the coronavirus. Additional letter recommendations include debt payment moratoriums, improved debt restructuring, encouraging public budget approval processes for countries and raising revenue by curbing corruption, tax evasion and tax avoidance.

One of the specific solutions advocated in the letter was expanding an IMF process which delivered health-care aid through debt relief and a grant-like process during the 2014 Ebola epidemic that devastated Liberia, Guinea and Sierra Leone. Jubilee USA worked with the IMF, G20, US Treasury and the White House to establish this process, the Catastrophe Containment and Relief Trust.

“We have processes that can be tailored to offer immediate aid for poor countries impacted by the pandemic,” said Jubilee USA Executive Director, Eric LeCompte who signed the IMF Covid-19 letter and worked on the Catastrophe Containment and Relief Trust. "The IMF needs to make it easier for countries to qualify for the aid as the virus spreads."

The global Covid-19 death toll surpassed 15,000, the stock market lost one-third of its value and some unemployment projections balloon to 20-30%.

“A well-designed, globally-coordinated response from the international community can go a long way to prevent and mitigate the impacts of the Covid-19 crisis and move us towards a recovery path," the letter continued. “The IMF should encourage countries and global institutions to enact agreements on responsible lending, financial transparency and limiting risky market behavior.”

Read Jubilee USA's Letter to IMF on COVID-19 here
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Jubilee USA Letter to IMF on COVID-19 Response

Jubilee USA's Executive Committee released a letter today sent to IMF Managing Director Kristalina Georgieva about the fund's response to the COVID-19 pandemic. See the full letter below or access a PDF of the letter here

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March 23, 2020


Kristalina Georgieva
The International Monetary Fund
700 19th St NW
Washington, DC 20431

"Then you will see and be radiant, And your heart will thrill and rejoice; Because the abundance of the sea will be turned to you, The wealth of the nations will come to you." --- Isaiah 60:5

Managing Director Georgieva,

Concerned about the economic impacts of the Covid-19 pandemic on the vulnerable and our world, we write on behalf of our 700 plus faith communities, global religious institutions and national religious denominations. 

Economic forecasts warn that a possible financial crisis or depression, spurred by the coronavirus, could be worse than the 2008 financial crisis. Nearly 100 million people, mostly women and children, were pushed into extreme poverty and 22 million jobs were lost worldwide in the 2008 crisis. The International Labor Organization says the numbers of jobs lost could surpass 50 million as a result of a new, deeper financial crisis.

Developing countries will struggle to limit the death toll and boost ill-prepared health systems. In many cases, healthcare exists in a weakened state in many developing countries because of long periods of austerity policy.

Export and supply shocks, subdued demand and falling commodity prices are a chief concern for developing countries. Revenue loss for countries is a significant concern as the pandemic forces work leaves, closes factories and restricts travel and tourism. At the same time, governments must increase spending on social protection measures and to mitigate business loss. For developing countries, all of these effects are compounded because of high-levels of unsustainable debt. Before this pandemic, 40% of low-income countries already faced debt crisis or high risk of debt distress. High debt leaves little space for fiscal and monetary policy interventions. Treasuries also lack billions in lost revenue because of illicit financial flows, corruption and tax evasion and tax avoidance.

A well-designed, globally-coordinated response from the international community can go a long way to prevent and mitigate the impacts of the Covid-19 crisis and move us towards a recovery path. The International Monetary Fund recently announced that it has $50 billion available under rapid access mechanisms that members can draw upon. In turn, the World Bank announced the deployment of $14 billion on a fast track to help developing countries cope with the health and economic impacts. While welcome steps, the crisis at hand warrants additional vital action.

Jubilee USA Network calls for the following urgent actions:

- Expand debt relief and aid for developing countries impacted by Covid-19 through the Catastrophe Containment and Relief Trust and other processes

Jubilee USA worked with the IMF, the G20, US Treasury and the White House to establish the IMF's Catastrophe Containment and Relief Trust during the Ebola epidemic in 2014. The trust provides debt relief and grant-like aid, which supported Guinea, Liberia and Sierra Leone to bolster their health systems as the countries wrestled with Ebola. The trust only has about $400 million available and countries can only receive support after a high level of economic damage occurs. To fully realize the potential of this instrument in the Covid-19 crisis response, it is urgent to increase the funding, allow its application to cancel debt stocks and ease the level and conditions of disbursement. The IMF is encouraged to lead the way in other processes that offer debt relief, innovative financing and vehicles to bolster healthcare financing.

- Enhance debt restructuring, issue debt payment moratoriums and create expedient debt reprofiling processes for countries impacted by the Coronavirus

In the face of the budgetary implications of Covid-19, many countries cannot meet debt payments without putting the health of their people at risk. The IMF should lead the way in determining that Covid-19 qualifies as a public health emergency, issue debt payment moratoriums and create a process for fast reprofiling of all its outstanding loans in order to help improve debt sustainability outlooks for borrowing members. By taking this measure, it will also enhance its moral authority to call on private creditors to offer a substantial restructuring of their debt claims. The IMF can play a helpful role in facilitating the process of creditor coordination in the negotiation of debt restructurings. 

- Mobilize additional financing resources to support increased needs

As a growing number of countries resort to increased borrowing, market access will likely be too expensive and add to debt burdens. The IMF can lend at below-market rates but will not be adequately equipped to support the increased demand without a substantial resource increase of at least 50 percent over current capacity. Previous crises show that multilateral development banks are primary providers of countercyclical, long-term financing. Their shareholders should commit to additional lending in the amount of $200 billion. This is achievable with a mix of easing conservative lending standards and fast-tracked capital injections. Jubilee USA will work with IMF and World Bank members to achieve these increases in lendable resources for international financial institutions.

- Advise countries on public budget transparency, financial crisis prevention and raising revenues

While the above immediate short-term actions should be implemented, a coordinated response should empower countries to emerge from the pandemic with new resources to support future resilience and prevent further economic loss. IMF advice to countries should ensure strong, consistent advice on public budget approval and transparency, responsible borrowing, building more robust social protection floors and raising revenues to cushion countries from future crises. Beyond public budget transparency, revenue-raising measures include curbing illicit financial flows, corruption, tax evasion and tax avoidance. In recent years, the IMF adopted the adage, "Fix the roof while the sun is still shining." Unfortunately, it's raining and we haven't fixed the roof. The IMF should encourage countries and global institutions to enact agreements on responsible lending, financial transparency and limiting risky market behavior.

Ms. Georgieva, during this moment when the fragility and sanctity of life is forefront on the global stage - we hold you, all at the Fund and our world in our prayers. We look forward to continue working with you to lift the vulnerable and protect all of us from financial crisis.

Sincerely,

Reverend Steve Herder 
Co-Chair

Celeste Drake
Co-Chair

Reverend Aniedi Okure
Executive Officer

Rabbi Matthew Cutler
Executive Officer

Eric LeCompte
Executive Director

 

PDF Version available here

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Pittsburgh Catholic Publishes Eric LeCompte's Thoughts on Pope Francis Jubilee Meeting

Pittsburgh Catholic reported on Eric LeCompte's recent thoughts on Pope Francis' Jubilee Meeting with world leaders and economists. Read an excerpt below, and click here for the full story.

Vatican opens doors to leaders ready for economic reform

The leading “global decision-makers” all agree on the root causes of unsustainable inequality and are adamant about wanting to prevent yet another global financial crisis, said Eric LeCompte, executive director of Jubilee USA Network and an observer invited to the Vatican gathering.

He told Catholic News Service the problem comes in finding consensus on the solutions, “the ways forward for countries to get out of debt crisis and financial crisis and also for building an economy that’s more inclusive and where there is less of a distinction between the haves and the have-nots.”

 

Read more here

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Eric LeCompte's IMF Analysis Featured in Seeking Alpha

Eric LeCompte's analysis of recent IMF Chief Kristalina Georgieva were featured in Seeking Alpha. Read an excerpt below, and click here for the full story.

The Glub, Glub, Glub Of Recession Circling The Drain

Eric LeCompte, the head of debt charity Jubilee USA, said: "The IMF delivered a stark message about the potential for another massive financial disaster that we last experienced during the Great Depression.

 

Read more here

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Chicago Catholic Reports on Eric LeCompte's Jubilee Seminar with Pope Francis

Chicago Catholic reported on Eric LeCompte's thoughts on the recent Vatican high-level seminar where Pope Francis urged the creation of new global debt and tax policies that can reduce inequality. Read an excerpt below, and click here for the full story.

Vatican opens doors to leaders ready for finance reform

The leading “global decision-makers” all agree on the root causes of unsustainable inequality and are adamant about wanting to prevent yet another global financial crisis, said Eric LeCompte, executive director of Jubilee USA Network and an observer invited to the Vatican gathering.

He told Catholic News Service the problem comes in finding consensus on the solutions, “the ways forward for countries to get out of debt crisis and financial crisis and also for building an economy that’s more inclusive, and where there is less of a distinction between the haves and the have-nots.”

LeCompte said, “Pope Francis really led his country as they were battling a type of predatory finance known as vulture funds,” so while he is continuing the same social teaching as his papal predecessors, “we see the Holy See talking more about very technical economic policies like derivatives and taxation and illicit financial flows.”

“There’s a real sense from this Holy Father that if we really want to change the structures that govern our economy, we need to be able to address these technical issues head-on,” he said.

The pope, in fact, made a point to stop by the pontifical academy in the early afternoon. His lengthy and detailed written speech continued to hammer home basic and reasonable ethical principles: an end to money laundering, the arms industry and tax havens that drain billions from national economies; stopping repeated tax cuts for the wealthy; and relieving crushing, unsustainable debt burdens, to name a few.

LeCompte said many of the solutions put forward “are ones that Jubilee has advocated for over 20 years, and we’ve worked very closely with the Holy See on developing those positions, as well as with all other major religious institutions around the world.”

Just as the pope’s encyclical, “Laudato Si’,” sets a clear way to examine current structures and advocates for the values of global solidarity and environmental and economic justice, the Feb. 5 gathering was a continuation of that call for a more just world.

“We actually have a very clear path that needs to be taken,” LeCompte said, which begins with God’s creation of a rich and abundant world.

And, he said, the path leads toward that “jubilee promise that Pope John Paul II was the first to exclaim — that we all deserve to live in an economy where we all have enough.”

 

Read more here

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U.S. Launch of the 2020 Financial Secrecy Index

WHATAs Congress considers measures to combat financial secrecy and end the formation of anonymous companies in the United States, the Tax Justice Network and the Financial Accountability and Corporate Transparency (FACT) Coalition ask you to join them on Capitol Hill for the U.S. launch of the 2020 Financial Secrecy Index (FSI).

Since 2009, the Tax Justice Network has produced the Financial Secrecy Index biennially, analyzing the level of secrecy in the world’s financial centers. It is the only comprehensive ranking that seeks to apply a methodical approach to defining secrecy jurisdictions. The previous iteration of the FSI, released in January 2018, rated the United States as the 2nd largest secrecy jurisdiction in the world, behind only Switzerland.

The 2020 FSI Launch Event will feature a presentation by TJN on the 2020 Financial Secrecy Index results, including where the U.S. falls in the new rankings and why. A panel of experts will then discuss the national security, law enforcement, human rights, and economic implications of financial secrecy in the United States as well as bipartisan legislation (such as the ILLICIT CASH Act and the Corporate Transparency Act) currently pending in Congress to tackle financial secrecy.

WHO: Jack Blum, Tax Justice Network; Annie Boyajian, Freedom House (TBC); David Luna, Chair, Anti-Illicit Trade Committee, U.S. Council for International Business (TBC); Tim Richardson, Fraternal Order of Police; Jodi Vittori, Transparency International Defense & Security; Eric LeCompte, Executive Director, Jubilee USA Network; Clark Gascoigne, The FACT Coalition - moderator 

WHEN: 9: 30 AM – 10:30 AM ET Wednesday, February 19

WHERE:  SD-106 Dirksen Senate Office Building
Washington, DC 20002

Jubilee USA Network is an alliance of more than 70 US organizations and 700 faith communities working with 50 Jubilee global partners. Jubilee builds an economy that serves, protects and promotes the participation of the most vulnerable. Jubilee USA has won critical global financial reforms and more than $130 billion in debt relief to benefit the world's poorest people. www.jubileeusa.org

 

 

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Child Poverty in Puerto Rico: How Much It Costs and What Can We Do About It?

WHAT: Join us for a discussion about one of Puerto Rico's pressing challenges, how it affects its economic future and sustainability and what Congress can do. Hosted by the House Natural Resources Committee and featuring its Chairman Rep. Raul Grijalva (D-AZ) and Committee Member Rep. Jenniffer Gonzalez (R-PR) as opening speakers. 

WHO: Dr. Maria E Enchautegui, Director of Research and Policy, Youth Development Institute of Puerto Rico; Mr. Brayan Rosa, Public Policy Manager, Youth Development Institute of Puerto Rico; Mr. Eric LeCompte, Executive Director, Jubilee USA Network; Mr. Bruce Lesley, President, First Focus; Mrs. Natividad Flores, Community Leader; Moderator, Mrs. Amanda Rivera, Executive Director, Youth Development Institute of Puerto Rico. 

WHEN: 2: 00 PM ET Tuesday, February 11, 2020

WHERE: Longworth House Office Building
Capitol Hill, Washington DC

Jubilee USA Network is an alliance of more than 70 US organizations and 700 faith communities working with 50 Jubilee global partners. Jubilee builds an economy that serves, protects and promotes the participation of the most vulnerable. Jubilee USA has won critical global financial reforms and more than $130 billion in debt relief to benefit the world's poorest people. www.jubileeusa.org

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