The Jubilee Blog

Nepal Struggles to Rebuild One Year After Massive Earthquake: Financial System Unprepared for Disasters

by Greg Williams

Nepal faces significant humanitarian challenges one year after its devastating 7.8 magnitude earthquake. According to the Red Cross, four million Nepalis still live in sub-standard housing. The earthquake killed 8,000 people and caused roughly $10 billion in economic damage.

"This anniversary is an important reminder that Nepal's people still need help," noted Eric LeCompte, executive director of the religious development coalition Jubilee USA. "Nepal was already a desperately poor country before the earthquake struck."

The International Monetary Fund (IMF) created a debt relief fund for poor countries in the aftermath of Haiti's 2010 earthquake that helped cancel Haiti's external debt. In February 2015, the IMF expanded the fund to include health crises and cancelled $100 million in debt for Ebola-impacted countries. Under the new fund, 38 of the world's poorest countries are eligible for relief in the event of a disaster or health crisis, including Nepal. 

However, Nepal did not qualify for relief because its earthquake damage did not meet the fund's criteria. The quake impacted one-third or more of Nepal's people, meeting the first criteria, but failed to meet the second criteria because it did not cause damage equal to the size of Nepal's economy. According to the most recent World Bank numbers, Nepal owes $4 billion in debt, including more than $1.5 billion to the World Bank.

The World Bank since the Ebola outbreak has worked on a type of insurance fund to protect poor countries facing disasters or shocks. The World Bank still has not enacted the new policies.

"While the IMF deserves credit for its emergency fund, it's clear the criteria for relief needs to be expanded," said LeCompte. "The World Bank needs to implement new policies to address crises like this. The World Bank should start with Nepal."

Some Nepalis report aid money is still not flowing to disaster-impacted areas one year after the quake. Nepal lost $5.6 billion over the past decade to corruption, crime and tax evasion according to the anti-corruption think tank Global Financial Integrity.

"Corruption and debt have real human consequences in Nepal," stated LeCompte.‎

Read more about Nepal's earthquake

Read more about the IMF's emergency debt relief fund

Read more about the IMF's emergency fund and Nepal

National Puerto Rico Call-In Day

By Andrew Hanauer

A critical battle is taking place on Puerto Rico in Congress. No matter where in the world you live, faith communities around the globe and across the United States can sign up and Pray with Puerto Rico.

For our partners in Puerto Rico and the mainland US, we really need your help with a National Call-in day to Congress on Wednesday, April 27th. We need to win legislation that reduces the debt, fights child poverty and ensures participation from the people of Puerto Rico in any solution.

 

Can you please e-mail me ([email protected]) and let me know if you can participate in our national Congress Call-in day?

Jubilee USA is setting up a new call and contact Congress system that we will send you the details on once you RSVP. 

You can also see our website with call information for Congress at this link or create your own call script. We'll have that page updated with the latest information for next Wednesday April 27th.

 

Argentina Returns to Bond Market after Debt Settlement

By Greg Williams

Argentina returns to the bond market after 15 years with access to limited international financing. Argentina will use part of the money it raises to pay hold-out funds from the country's 2001 default.‎ Those funds rejected previous settlement offers and instead sued Argentina for full repayment. Argentina agreed to terms with the funds in February ending a decade-long legal dispute.

Puerto Rico's Humanitarian Crisis Deepens as Congress Debates Legislation

By Greg Williams

As Congress debates legislative solutions for Puerto Rico's financial crisis, new reports indicate that the island's child poverty rate is worse than previously feared and that migration is increasing. Congress delayed legislation to resolve disagreements on its key provisions, including debt restructuring tools for Puerto Rico.

"Congressional action must include strong, comprehensive and orderly restructuring tools to bring the debt back to payable levels," said Eric LeCompte, a debt expert and executive director of Jubilee USA, a religious development coalition. "Legislation must also set clear targets to reduce child poverty. American children are suffering on the island."

According to a new report from the Institute for Youth Development, 57 percent of youth under 18 in Puerto Rico live below the poverty line. Nearly 41 percent of households with youth under 18 receive food stamps.

"We knew things were bad already for kids living in Puerto Rico, but new data suggests it's even worse than we thought," shared LeCompte who wrote a letter to Congress‎ urging that proposed Puerto Rico legislation makes reducing child poverty a priority.

According to Pew Research Center, in 2014 84,000 people left the island for the U.S. mainland. This represents a 38 percent increase from 2010. As of 2013, there are more Puerto Ricans living on the US mainland than on the island itself.

"The hardest thing to buy in Puerto Rico is a suitcase," stated LeCompte. "Puerto Ricans are American citizens and are fleeing to the mainland United States in search of work in increasing numbers."

Read a timeline of the crisis in Puerto Rico 

Read Jubilee USA's letter to Congress on the Puerto Rico Oversight, Management and Economic Stablity Act (PROMESA)

Read the report from the Institute for Youth Development

Read the report from Pew Research Center

House Republicans Convene to Discuss Puerto Rico Legislation

By Greg Williams

Speaker Paul Ryan is holding a special meeting with Republicans to discuss the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA). ‎The legislation was to be debated on Thursday, but Republican leadership slowed the process down because of negotiations on the legislation. Ahead of the Republican special session, the religious development group Jubilee USA sent a letter from its executive director stating, "We believe legislation has made positive, forward progress on key elements and, while not perfect, we believe there are several improvements that will provide consensus for bill passage." 

In his letter to Congress, Jubilee USA's Eric LeCompte urges changes to the bill to protect Puerto Rico from debt litigation, improve budget transparency, give Puerto Ricans a greater voice in the proposed oversight board and set clear targets for reducing child poverty in Puerto Rico.

Puerto Rico Archbishop Invites Prayers for Congress, Creditors and Political Leaders around Financial Crisis

By Greg Williams

As Congress introduces legislation to address Puerto Rico's financial crisis, San Juan's Catholic Archbishop is inviting prayers that all "work together to find a solution to the crisis that respects the rights and dignity of all sides." The Archbishop's thoughts come as the House Committee on Natural Resources is in the introduction process of a legislative solution. Congress holds a special hearing on Wednesday on the new legislation.

"I invite the people of Puerto Rico and all people of faith around the world to join me and pray for the US Congress as they consider action around Puerto Rico," said Puerto Rico's Catholic Archbishop, Roberto Octavio González Nieves, O.F.M.  "We also must pray for Puerto Rico's leaders and creditors to work together to find a solution to the crisis that protects the rights and dignity of all sides. Finally we pray that any solutions will ensure that the debt is brought to payable levels, without further sacrifice to our social services."

"Panama Papers" Release Highlights Need for US Shell Company Legislation

By Greg Williams

More than 11 million leaked documents from a major Panama-based "off-shore" law firm reveal how the global financial system enables corruption and tax evasion. The "Panama Papers" highlight the role that anonymously formed companies play in facilitating money laundering and crime. The leak is the largest known to date and involves heads of state and other prominent officials.

"The Panama Papers is the biggest leak we've ever seen on how global corruption and tax evasion is facilitated," noted Eric LeCompte, Executive Director of the religious development group Jubilee USA. "This leak is a blueprint for how the most vulnerable people in the world are harmed by financial secrecy." 

On February 3rd, Republicans and Democrats in Congress introduced the Incorporation Transparency and Law Enforcement Assistance Act (HR 4450, S 2489) to collect ownership records for companies incorporated in the US and give law enforcement access to that information. The legislation would make it more difficult to set up anonymous companies in the United States. 

"Congress should pass legislation to make it more difficult to set up anonymous companies here in the US," noted LeCompte. "These companies fuel corruption, poverty, human trafficking and armed conflict."

Read more about the Incorporation Transparency and Law Enforcement Assistance Act

Read more about the crime and corruption facilitated by shell companies