The Jubilee Blog

United Nations Warns of Famine, Urges Debt Relief and Calls for New Debt Process to Confront Coronavirus

Over the last 48 hours, United Nations agencies warned the coronavirus could spread famine to hundreds of millions, called for new debt relief processes and the UN's chief urged expanding debt relief and aid to more countries.

"Without debt relief and emergency aid, too many countries do not have the ability to feed their people, strengthen health services or help their people survive the economic impacts of the coronavirus," stated Eric LeCompte, a UN finance expert, who leads the religious development group, Jubilee USA Network.

On Thursday, United Nations Secretary General António Guterres called for expanded debt relief and aid for broader groups of developing countries to confront the coronavirus pandemic. Guterres spoke to the virtual meetings of the UN Financing for Development Forum and he specifically noted the plight of Middle Income Countries.

His remarks come as the UN World Food Programme released analysis this week, that the impacts of COVID-19 could spread famine to 265 million people.

"Almost all of the countries that face increased numbers of people suffering from famine are poor countries with debts that cannot be paid," said LeCompte. "Not only do these countries need debt relief, they also need emergency aid so people don't starve to death."

The UN Conference on Trade and Development also released Thursday a template for a new process, the International Developing Country Debt Authority, to create a mechanism to negotiate the debt of countries facing crisis.

"The efforts of the United Nations are critical now to immediately expand aid and debt relief to more countries in the face of this unprecedented global health and economic crisis."

Last Friday, the International Monetary Fund and World Bank noted that increased resources and debt relief would be needed as the coronavirus economic crisis deepens.

Read the UN Secretary General's Remarks here

Read Jubilee USA's April 1st letter to the IMF on reserve gold funds here

Read Jubilee USA's March 23rd letter to IMF on a health and economic COVID-19 response plan here

Read about the Major Religious Institutions Letter to the President, IMF and G20 to Cancel Debts and Use Reserves to Protect Poor here

Economic Crisis Could Get Much Worse Says IMF

The International Monetary and Financial Committee, the leadership of the IMF, released their Spring Meetings communiqué calling coronavirus economic impacts, "unprecedented" and that "the global economic outlook is subject to high uncertainty."

"The IMF is saying that our economic prospects are terrible, our economy could even face further disaster and they don't know how much worse it can actually get," noted Eric LeCompte, who leads the religious development group Jubilee USA. "World leaders are taking some strong actions, but even stronger actions are needed if we hope to minimize the loss of life and protect jobs."

Jubilee USA advocated for several IMF crisis solutions since mid-March including dept payment suspensions and expanding an IMF process which delivered health-care aid through debt relief and grants during the 2015 Ebola epidemic. On Monday, the Fund announced the expansion of this Catastrophe Containment and Relief Trust to cancel 6 months of debt for the world's poorest 25 countries. These funds will bolster health systems and support crisis prevention measures in the countries.

On Wednesday the G20 announced a suspension of debt payments and interest for the world's 76 poorest countries and Angola in order to confront the coronavirus.

"We welcome steps taken so far to increase aid, financing and debt relief," stated LeCompte a United Nations finance expert who monitors IMF reports and meetings. "A critical action that the world must take is to access financial reserves so all countries can survive this crisis. The leaders of the IMF and G20 must approve access to these reserves, or what's also known as the special drawing rights or SDRs."

The G20 continues to struggle to reach a consensus on allowing the use of the special drawing rights.

On April 1st, Jubilee USA Network wrote the leader of the IMF urging the selling of gold reserves to provide greater aid to developing countries, after analyzing Fund balance sheets and the current market price of gold.

"The IMF holds $140 billion in gold reserves. Portions of this money can be used to get more aid and relief to the world's most vulnerable countries," shared LeCompte.

In a March 23rd letter to the IMF, Jubilee USA called for a “well-designed, globally-coordinated response from the international community" to the health and economic impacts of the crisis. The development group detailed a plan to expand debt relief, aid, financing, improve debt restructuring and move forward financial crisis protections and transparency initiatives.

"We're only in the bottom of the first inning in dealing with this health and economic crisis," said LeCompte. "We need everyone's help through the last inning. The stakes of playing ball have never been higher and this game's outcome determines how many of us will survive."

Read Jubilee USA's April 1st letter to the IMF on reserve gold funds here

Read Jubilee USA's March 23rd letter to IMF on a health and economic COVID-19 plan here

Read about the IMF World Economic Report here

Read about the Major Religious Institutions Letter to the President, IMF and G20 to Cancel Debts and Use Reserves to Protect Poor here

G20 Suspends Debt Payments for Poor Countries As the Coronavirus Spreads

The G20 announced a suspension of debt payments and interest for the world's 76 poorest countries in order to bolster health services to confront the coronavirus. IMF head, Kristalina Georgieva and World Bank President, David Malpass spoke to the G20 Finance Ministers and Governors urging all types of debt holders, including banks, to offer debt relief for poor countries.

"The most innovative piece of the G20 commitment to suspend debt payments for the poorest countries, is to create a process that involves private creditors, banks and other commercial creditors to also offer debt relief," said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. "While we see progress, we still need to answer a lot of questions. What about other developing countries and emerging markets who need relief? How will a process move forward to cut debt when debt is unsustainable for countries?"

Kristalina Georgieva, the IMF's Managing Director at a press conference, urged that every resource possible be deployed to protect lives and livelihoods as the world struggles with the health and economic impacts of the COVID-19 pandemic.  

"Georgieva's speech hits the right notes. All of us need to do everything we can and deploy every resource to save lives and protect jobs in the face of the coronavirus," noted LeCompte who monitors IMF reports and serves on United Nations debt expert groups. "A critical action that the world must take is to access financial reserves so all countries can survive this crisis. The leaders of the IMF must approve access to these reserves, or what's also known as the special drawing rights or SDRs."

Read about the IMF World Economic Report here

Read Remarks by IMF's Kristalina Georgieva During the G20 Finance Ministers and Central Bank Governors Meeting here

Read World Bank President David Malpass's Remarks to G20 Finance Ministers here

Read about the Major Religious Institutions Letter to the President, IMF and G20 to Cancel Debts and Use Reserves to Protect Poor here

Read Jubilee USA's March 23rd letter to IMF on a health and economic COVID-19 plan  here

Read Jubilee USA's April 1st letter to the IMF on reserve gold funds here

Major Religious Institutions Urge President, IMF and G20 to Cancel Debts and Use Reserves to Protect Poor

Many of the largest religious institutions are calling for financial crisis protections, debt relief and additional resources to protect the world's poor in what the IMF calls the greatest financial crisis since the Great Depression. The 80 groups joined a letter organized by Jubilee USA Network to confront the coronavirus crisis and it was delivered to the White House, G20 and IMF on Tuesday.

Signers include: The Episcopal Church, Evangelical Lutheran Church in America, National Council of Churches, Presbyterian Church (USA), Unitarian Universalist Association, United Church of Christ, United Methodist Church, Jubilee USA Network, American Friends Service Committee, Church World Service, Buddhist Association of the United States and the Religious Action Center of Reform Judaism. The largest labor union in the United States, the AFL-CIO joined the Jubilee USA letter.

The signers join calls from Pope Francis, the US Catholic Bishops and 165 world leaders encouraging additional resources, aid and debt relief to ensure all countries can withstand the crisis.

"Religious institutions and their partners are making a moral call for all people on the planet to be able to have enough resources to weather the health and economic impacts of the coronavirus. There is already momentum behind debt relief and emergency financing," stated Jubilee USA Executive Director Eric LeCompte. LeCompte is a United Nations finance expert and has monitored IMF meetings since 2008. "We are urgently calling on the G20 and IMF to access global reserve funds so that both developed and developing countries can get through the greatest financial crisis of our time. We need to use the special drawing rights or SDRs like we did after the 2008 crisis."

"Special drawing rights," debt relief and additional emergency financing are the issues that the G7, G20, IMF and World Bank are focusing on during virtual spring meetings this week. On Tuesday, the IMF released a report dubbing the "Great Lockdown" as the greatest financial crisis since the Great Depression.

The US Treasury released a statement Tuesday after a virtual meeting with G7 leaders expressing support for the world's 76 poorest countries to stop debt payments to provide health services in the developing world.

On Monday, the IMF announced it would cancel 6 months of debt payments for 25 poor countries in an effort to boost their health systems and economies.

"Urgent and bold actions are needed now if we are to survive the greatest health and economic crisis of our lifetimes," said LeCompte.

Read Religious Leader's Letter the President Trump, IMF and G20 here

Read about the April 2020 World Economic Outlook here

Read about the IMF's Debt Relief for 25 Poor Countries here

Read about the Catholic Bishops Letter to Urge President Trump to Lead Global COVID-19 Debt Relief here

Read Jubilee USA's March 23rd letter to IMF on a health and economic COVID-19 plan  here

Read Jubilee USA's April 1st letter to the IMF on reserve gold funds here

 

 

IMF Calls "Great Lockdown" Worst Economic Crisis Since the Great Depression

The IMF says we face the worst economic crisis since the Great Depression because of the coronavirus. As world leaders gather virtually for the Spring International Monetary Fund and World Bank Meetings, the Fund released its April World Economic Outlook Report, dubbing the crisis, the "Great Lockdown" and reporting that the global economy will lose at least $9 trillion in 2020 and 2021.  

"This is the most frightening news the Fund has ever released on the status of our global economy," noted Jubilee USA Executive Director Eric LeCompte, who tracked IMF meetings and reports since the 2008 financial crisis. LeCompte's organization detailed a financial crisis plan to the IMF on March 23rd. "When you analyze what the IMF is actually saying, the message is things could even get worse and they really don't know how bad it can actually get."

The IMF report forecasts that if "lockdowns" and the spread of the virus becomes more limited in the Fall, we could see economic growth for some countries in 2021. However, those growth projections would already be below previous IMF 2021 growth projections.

The IMF report forecasts the economy will contract 3% in 2020 before coronavirus containment policies can be gradually loosened, with economic growth of 5.8% predicted as the economy stabilizes.

Over the next three days, the G7, G20, IMF and World Bank will meet to determine solutions to deal with the growing crisis.

"Urgent action is required by the IMF and G20 this week," stated LeCompte, a United Nations finance expert. "During the meetings this week world leaders must move forward aid, financing and debt relief for developed and developing countries so people can survive the devastating health and economic impacts of the coronavirus crisis."

Read the April 2020 World Economic Outlook here

Read about the IMF's Debt Relief for 25 Poor Countries here

Read about the Catholic Bishops Letter to Urge President Trump to Lead Global COVID-19 Debt Relief here

Read Jubilee USA's March 23rd letter to IMF on a health and economic COVID-19 plan  here

Read Jubilee USA's April 1st letter to the IMF on reserve gold funds here

Catholic Bishops Urge President Trump to Lead Global COVID-19 Debt Relief

The US Conference of Catholic Bishops and Jubilee USA Network, an interfaith religious group, is urging President Trump to lead the G20 on coronavirus global debt relief plans. The groups argue debt relief immediately allows developing countries to bolster healthcare and survive economic crises.

"As the G20 considers a suspension of debt payments from the 76 poorest countries in the world, the United States can lead the world, again, in calling on wealthy countries, the G20, the IMF and World Bank, to suspend debt  payments for developing countries," wrote Bishop David J. Malloy and Eric LeCompte in a letter to the President on Wednesday. "Suspending debt payments, with no interest, can immediately allow countries to access funds to bolster their health systems and support needed stimulus packages in the developing world—allowing these countries to provide for their own health, safety and security."

Malloy, writing on behalf of the US Catholic Bishops, chairs international policy for the largest single religious denomination in the United States. Pope John Paul II, Pope Benedict and Pope Francis along with other major Christian, Jewish and Muslim leaders championed debt relief policies with Jubilee USA Network since the 1990s.

The letter lands at the White House as hundreds of world leaders and development groups are calling on the G20, IMF and World Bank to stop collecting debt of developing countries. The United Nations Conference on Trade and Development last week called for a trillion dollars of debt to be cancelled in the face of the coronavirus pandemic.

"Developing countries are unprepared to deal with the economic and health impacts of the coronavirus," said LeCompte who serves on United Nations finance expert groups. LeCompte's organization detailed a plan to the IMF in March to deal with the global crisis. "Most of Africa only has about 50 critical care beds per country. Without action, tens of thousands of people will die because they can't access life saving health services."

On Thursday, IMF Head Kristalina Georgieva foreshadowed next week's Spring IMF and World Bank Meetings. Georgieva warned that our current financial crisis is on par with the Great Depression and encouraged debt cancellation and relief plans for the 76 poorest countries in the world.

 

"I agree with the Fund that we need to expand debt relief and poor countries should stop making debt payments," shared LeCompte. "However, the IMF thinking is too small on the amount of debt relief needed. We need to start with at least hundreds of billions of dollars in debt relief measures, not billions."

On Tuesday, groups representing "Jubilee" organizations around the world wrote the heads of the Fund and the World Bank to press broader aid and debt relief efforts. The letter was sent from the African Forum and Network on Debt and Development, the European Network on Debt and Development, Jubilee Debt Campaign UK, Jubilee Germany, the Latin American Network on Debt and Development and Rights, Oxfam International, the French Catholic - La Plateforme Française Dette & Développement, the Society for International Development and Jubilee USA Network.

Read US Catholic Bishops, Jubilee USA Letter here

Read Kristalina Georgieva's "Curtain Raiser" Speech here

Read Jubilee USA's March 23rd letter to IMF on a health and economic COVID-19 plan  here

Read Jubilee USA's April 1st letter to the IMF on reserve gold funds here

Read Global Jubilee Groups Letter on Aid and Debt Relief here