The World Bank just announced that it did not properly monitor resettlement projects connected to World Bank-funded development programs. The news agency Reuters reported that the Bank "had no idea how many people may have been forced off their land and lost their jobs due to its projects in developing countries, and whether these people were compensated fairly and on time."
This announcement is a reminder of the urgency of implementing responsible lending and borrowing principles at international financial institutions like the World Bank and International Monetary Fund. Responsible Lending and Borrowing is a key component in addressing poverty, protecting poor communities from unsustainable debt burdens, harmful loans to repressive regimes and the unintended consequences of large development projects. Jubilee USA is at the forefront of promoting responsible lending and borrowing and played a significant role in developing the United Nations Conference on Trade and Development's (UNCTAD) major report on the topic.
Development projects that displace whole communities are a perfect example of the problem. The World Bank's internal auditor found that the Bank's projects weren't directly linked to intimidation and harassment of evicted residents, but that the Bank didn't plan to properly mitigate risk. Lenders, like borrowers, have a responsibility to ensure that their loans do not bring harm to a community. As the World Bank announces plans to address the problems, Jubilee will continue to advocate for enshrining responsibility in the lending practices of major financial institutions.
Greece, the world's third most indebted country, sought to extend its loan by six months. Last week, Greece was able to negotiate a deal with the Eurozone to secure a four-month bailout extension.
On Wednesday, February 25 Jubilee's Executive Director Eric LeCompte discussed the debt crisis in Greece and the steps needed to be taken to address Greece's financial crisis. He highlighted the importance of understanding the role of the IMF and the issues of debt relief, tax justice and debt restructuring. Listen to Eric's interview here.
A US House of Representatives Judiciary sub-committee is discussing legislation to give Puerto Rico's public utilities access to US bankruptcy protection. The Subcommittee on Regulatory Reform, Commercial and Antitrust law is meeting to debate HR 870, a bill introduced by Puerto Rico's Representative in Congress. Puerto Rico has more than $70 billion in public debt, about $20,000 per resident. The island's government attempted to restructure its public utility company's debts but was stopped by a court ruling. As a territory, Puerto Rico cannot access International Monetary Fund (IMF) loans and isn't eligible for the bankruptcy laws that govern US cities and states.
"Puerto Rico is in a debt trap and this bill could be a way out," noted Eric LeCompte, executive director of the religious anti-poverty group, Jubilee USA Network. "In this case, bankruptcy laws can help, just as a global bankruptcy process could help all countries around the globe."
Some financial firms that hold Puerto Rican bonds oppose the bill. Those funds won a recent court decision to block the island's public utility company's $9 billion debt restructuring. Meanwhile, some hedge funds involved in Puerto Rico have been involved in allegedly predatory behavior elsewhere, including Aurelius Management, one of the lead plaintiffs in the Argentine debt dispute.
Greece is the world's third-most indebted country, and the most indebted in Europe. Five years ago, in the midst of a significant financial crisis, Greece received emergency loans from the International Monetary Fund, European Central Bank and European Union. As part of that agreement, Greece undertook a number of harmful austerity measures that worsened its economic situation.
Nearly a third of Greeks live in poverty. Youth unemployment has reached 50% and at one point the economy contracted for 5 years in a row. Against this backdrop, Greece elected a new government last month that pledged to renegotiate the country's debts and end the austerity policies.
One of Greece's biggest concerns is tax collection - in January alone, Greece came up 1 billion euros short of collection targets. This lost revenue is a big reason for Greece's debt and austerity problems. The new government, as part of a deal with the Eurozone, is pledging to crack down on tax evasion.
Our Executive Director Eric LeCompte was on CCTV America last night to talk about this issue. CCTV is the world's largest tv broadcaster, reaching more than 1.2 billion people. You can watch Eric's interview here and please share the link with family and friends.
Jubilee USA Network is an alliance of more than 75 US organizations and 400 faith communities working with 50 Jubilee global partners. Jubilee's mission is to build 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
Greece reached a deal with Eurozone Finance Ministers to extend the country's financial support package. Greece will submit a list of potential economic reforms by Monday for review. The deal extends loans to Greece for four months. Greece had sought a six-month extension. Greece's government came to power last month amid calls to end the country's loan program with the European Central Bank, European Union and International Monetary Fund and to cancel the country's austerity programs and renegotiate its debt. Greece is the world's third most indebted country.
Eric LeCompte, Jubilee's Executive Director, released the following statement:
"It's exciting that Greece and the European Union have reached some deal. This should give Greece some breathing space to provide the kind of relief the country needs.