The Jubilee Blog

G20 Discusses Stimulus, Climate and Aid for Developing Countries

By Zachary Conti

 

G20 finance ministers met Friday to discuss global coronavirus response. The group endorsed continuing stimulus plans in wealthy countries and supporting plans to increase aid and vaccine access for developing countries.

"If the stimulus plan in the United States moves forward, it translates to about 2 percent in global economic growth," noted the Executive Director of the religious development group Jubilee USA Network, Eric LeCompte. "The G20 is moving forward debt relief, vaccine distribution and accessing global reserve funds for developing countries. The question is will it be enough and can it happen quickly enough."

On Thursday, Treasury Secretary Janet Yellen expressed support for a process to deploy global reserve funds (Special Drawing Rights) to help low-income countries. She also highlighted implementation of the G20 debt reduction process agreed last year. The G20 tasked the International Monetary Fund to create a plan for the Special Drawing Rights for upcoming meetings.

“US leadership is pushing G20 actions on debt relief and the Special Drawing Rights,” LeCompte, a United Nations finance expert, added.

Earlier this week, Jubilee USA Network and the US Conference of Catholic Bishops sent a detailed letter to Yellen and President Biden expressing support for debt relief, financial system changes to prevent future crises and a $3 trillion allocation of global reserve funds. Jubilee USA Network with Latin American partner, Latindadd coordinated a letter signed by more than 200 organizations urging the G20 to move forward Special Drawing Rights or global reserve access.

G20 talks also covered global policies to fight climate change and tax avoidance.

“The G20 hopes to agree on a plan by 2021 to curb tax avoidance,” stated LeCompte. "Perhaps the most important aspect of the G20 meeting was to acknowledge that G20 decisions on finance will have some of the most significant impacts on climate change."

G20 finance ministers meet again ahead of the International Monetary Fund meetings in April.

Read the press release from the Italian G20 Presidency here.

Read Secretary Yellen's letter here.

Read the letter from the US Conference of Catholic Bishops and Jubilee USA Network here.

Read the press release about the Catholic Bishop and Jubilee USA letter here.

Read the press release and letter from more than 215 groups on Special Drawing Rights to the G20 here.

International Cooperation Can Fight Corruption and Stop Tax Evasion, Say UN Experts

By Zachary Conti, 

 

A UN experts report offers 14 recommendations to stop the loss of trillions in public revenues. The UN group argues that money lost to transnational crime, corruption and tax avoidance could be used to address the pandemic, poverty and climate change.

“The lack of transparency in the financial system impacts the vulnerable and our planet,” stated Eric LeCompte, the Executive Director of the religious development group Jubilee USA Network. “Capturing the trillions in lost revenue is an important way to fight the pandemic and economic crises that countries face.”

The United Nations High-Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda (FACTI Panel), includes former heads of state, past central bank governors, business leaders and prominent academics. Report recommendations range from identifying the owners of shell companies to international detections on hiding money and corporate disclosure of what monies are spent in the countries they operate in.

The FACTI Panel proposes a UN tax convention to set international tax and transparency norms as well as a tax dispute settlement system.

“The big lesson of the report, is that more international cooperation is needed to stop corruption, tax evasion and tax avoidance,” said LeCompte who serves on United Nation finance expert groups.

 

Read more here. 

Treasury Secretary Announces Support for Global Reserve Access, Debt Relief and Tackling Climate Change

By Zachary Conti, 

 

In a letter to the G20, Treasury Secretary Janet Yellen expressed support for the G20 to determine a process for how global reserve funds (Special Drawing Rights) could be deployed to help low-income countries.

"Yellen's letter is incredibly positive news and signals support for the creation of Special Drawing Rights or reserve funds to support developing countries," noted Jubilee USA Executive Director Eric LeCompte. LeCompte has pressed the G20 on Special Drawing Rights for the last year. "Secretary Yellen is right that the G20 debt relief process must be implemented in an effective way to deal with the debt burdens of numerous developing countries."

The letter also highlighted the need to implement a debt relief process or the G20 "Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative." Yellen also encouraged the need for countries to tackle climate change.

"The letter from Yellen acknowledges that some of the most consequential decisions regarding climate change will be a part of financial decisions made by the G20," stated LeCompte, a United Nations finance expert. "These climate decisions must be made transparently and out in the open."

The letter comes a day before Yellen is set to meet with other G20 finance ministers. Earlier in the week the US Conference of Catholic Bishops and Jubilee USA Network sent a detailed letter to Yellen and President Biden expressing support for debt relief, financial system changes to prevent future crises and a $3 trillion allocation of the Special Drawing Rights. On Wednesday more than 200 groups wrote the G20 expressing support for Special Drawing Rights.

Read Secretary Yellen's letter here.

Read the letter from the US Conference of Catholic Bishops and Jubilee USA Network here.

Read the press release about the Catholic Bishop and Jubilee USA letter here.

Read the press release and letter from more than 215 groups on Special Drawing Rights to the G20 here.

More than 215 Groups Call on G20 to Access $3 Trillion in Global Reserve Funds for Developing Countries

By Zachary Conti, 

 

Catholic Bishops and Jubilee USA Network Urge President Biden to Aid World's Poor

More than 215 organizations sent a letter to the G20 and IMF to issue $3 trillion in global reserves, known as Special Drawing Rights (SDRs). Spanning the globe, the signers argue that SDRs will help countries suffering from the coronavirus crisis and, "send a strong signal of renewed multilateral coordination..."

"For many countries, access to Special Drawing Rights is the only way to afford urgent coronavirus spending needs while avoiding a debt crisis," said Aldo Caliari, Senior Director of Policy and Campaigns of Jubilee USA Network, one of the letter drafters and leaders of the initiative.

On Friday, G20 finance ministers meet on the global coronavirus crisis response for the first time under the Italian G20 Presidency and will discuss SDRs.

"A new and significant allocation of SDRs would bring liquidity that countries urgently need and help stabilize their economies," explained Patricia Miranda, Advocacy Coordinator of the Latin American network LATINDADD, another drafter of the letter.

On Tuesday, the US Conference of Catholic Bishops and Jubilee USA Network sent a letter to President Biden also urging SDRs action. The letter from the largest religious group in the United States and the interfaith development group encouraged the US to lead on a range of global pandemic response efforts, including increasing development funds and expanding debt relief. The letter sent to Biden also raised the need to put in place measures to prevent another economic crisis from happening.

Read the letter from 217 groups to the IMF and G20 here.

Read the press release on the letter to President Biden from the US Conference of Catholic Bishops and Jubilee USA Network here.

Read the letter to President Biden from the US Conference of Catholic Bishops and Jubilee USA Network here.

Catholic Bishops and Jubilee USA Network Ask Biden for Global COVID Aid and Debt Relief

By Zachary Conti

$3 Trillion in Global Reserve Funds Should be Released to Support Developing Countries, Encourage Faith Leaders

 The Biden Administration should support the release of $3 trillion in global reserve funds to support developing countries confront the COVID pandemic, say the US Catholic Bishops and Jubilee USA Network in a letter to President Biden. The letter also encourages the G20 and private groups to cancel debts for suffering developing countries, stopping tax avoidance, increasing aid, and creating a permanent global bankruptcy process to prevent future economic crises.

"The U.S. should support policies that include public budget transparency, raising revenues in the developing world through stopping corruption and tax evasion, responsible lending and borrowing, common good trade agreements and implementing a global bankruptcy or crisis resolution process," wrote Bishop David J. Malloy, Chairman of the Committee on International Justice and Peace of the US Conference of Catholic Bishops and Eric LeCompte, Executive Director of Jubilee USA Network. 

The letter to Biden comes after he attended last week's G7 Summit and Treasury Secretary Janet Yellen meets this week with G20 finance ministers on pandemic response. The G7 and G20 are currently debating debt relief and the size of creation of general reserve funds or Special Drawing Rights.

"Given the pandemic’s effects in developing countries, the U.S. Government must lead the world in accessing emergency reserve funds, or what’s known as the creation of the IMF’s Special Drawing Rights (SDRs). These generated funds were crucial in supporting economies to survive the 2008 financial crisis," noted Malloy and LeCompte. "We welcome the emerging consensus in the G20 to create $500 billion in SDRs. We urge your Administration to lead a response with the G20, IMF and Congress, that would generate a $3 trillion SDR issuance that would immediately deliver $1 trillion to all developing countries."

The letter on behalf of the largest US religious group, the Catholic Church, and the interfaith religious development group, Jubilee USA detailed concerns of the pandemic's impact on poverty and inequality, "...more than 495 million jobs are lost across the global economy, and the World Bank says that as many as 150 million people will fall into extreme poverty this year." The letter also thanked the Biden Administration for commitments on debt relief and for making changes to the financial system.

"The Catholic Bishops and Jubilee USA are urging both short-term solutions to resolve the current crisis and long-term solutions to prevent the next one," stated LeCompte. "We need more aid and debt relief now for developing countries. We need a bankruptcy process, better trade agreements and to stop tax avoidance and corruption to prevent the next crisis."

Read the joint US Conference of Catholic Bishops/Jubilee USA Network Letter to President Biden here. 

G7 Discusses Vaccines, Debt Relief, Tax Plans and Climate Change

By Zachary Conti, 

 

G7 presidents and prime ministers, hosted by the United Kingdom, met virtually on coronavirus recovery plans. The G7 Summit focused on vaccine access, debt relief, curbing tax avoidance and climate change. President Biden pledged $4 billion to bring vaccines to poor countries at his first international summit.

“G7 vaccine commitments are essential. Without global access to vaccines, we don't have a path out of the health or economic crisis,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. Jubilee USA Network tracked G7 meetings for the last 20 years. “Developing countries will need more aid and significant debt relief to be able to fully combat the health and economic shocks caused by the pandemic.”

The G7 leaders picked up from last week's G7 finance ministers discussion on a process to reduce debts of poor countries and using global reserve funds or Special Drawing Rights (SDRs). The leaders endorsed the full and transparent implementation of a G20 process to reduce debt for poor countries, the "Common Framework for Debt Treatment beyond the Debt Service Suspension Initiative."

"For countries to get through this crisis, they need to have debts cancelled," noted LeCompte, a United Nations finance expert. "Debt reduction processes must include the private sector and be expanded to more developing countries who need relief."

The current G20 debt relief process, authorized last year, is available to the 77 poorest countries. However, development groups argue many developing countries cannot access the current process. Further on the economic front, the summit agreed to move forward stronger international tax plans later in the year.

Climate was another priority focus during the G7 meeting. The US recently rejoined the Paris Agreement, a global agreement on climate, and the UK hosts a climate summit at the end of the year.

“Given the influence of the G7, strong G7 commitments on combating climate change can translate into stronger global climate policies,” stated LeCompte.

President Biden committed to come in person to Great Britain in June for the G7 Summit, planned to take place in the seaside town of Cornwall. In addition to the US and UK, the G7 includes Germany, France, Italy, Canada and Japan.

Read about the Feb. 19th G7 finance ministers meeting and agenda here.

Read the G7 Summit communiqué here.

Puerto Rico and US Religious Leaders Urge Biden on Jobs, Disaster Aid and SSI

By Zachary Conti

Administration Legal Move Could Release $2.3 Billion for Vulnerable Puerto Ricans Say Faith Leaders

In a letter sent to President Biden, 20 major Puerto Rico and US religious leaders urged actions on disaster relief, job creation, and a legal move to aid people on the heavily indebted island.

"Please immediately instruct the Department of Justice to withdraw the suit, filed by the previous administration, that blocks $2.3 billion in annual Supplemental Security Income (SSI) payments. About 300,000 poor and vulnerable US citizens with disabilities are critically impacted," wrote the religious leaders representing major religious institutions from Puerto Rico and the United States. "We look forward to working with you so Puerto Rico can emerge with renewed resilience from our debt and child poverty crises, challenges with ongoing natural disasters, and the impacts of the pandemic."

The letter also requests that Biden implement measures to return manufacturing pharmaceutical jobs to Puerto Rico to help in the fight against COVID. Actions to reduce the island's 60% child poverty rate were noted in the letter from the religious leaders.

“Debt and disasters mired Puerto Rico in multiple crises, and then COVID-19 hit,” stated Eric LeCompte the director of Jubilee USA, the organization that coordinated the letter with Puerto Rico and US religious leaders. "The White House and Congress can move forward critical actions to address the crises facing Puerto Rico."

The heads of US and Puerto Rico churches signed the letter representing Catholic, Methodist, Lutheran, United Church of Christ, Christian (Disciples) and Evangelical churches. The 20 signers include leaders of the National and Puerto Rico Council of Churches, Catholic Charities, the General Bible Society and Jubilee USA Network.

Since 2015, religious leaders pressed Republican and Democratic White Houses and Congressional leaders to address the island's debt, child poverty and jobs crises. In 2017 after hurricanes Irma and Maria decimated the island, US and Puerto Rico religious leaders included disaster relief in their advocacy efforts.

Read the Puerto Rico letter to President Biden and the 20 Puerto Rico and US religious leaders signers in English and Spanish here. 

Leer carta en espanol aqui. 

Global Economic Recovery, Debt, Climate, Vaccines Top G7 Finance Agenda

By Zachary Conti, 

G7 finance ministers met virtually to discuss economic recovery in the face of the coronavirus. The G7 agenda included global debt problems, vaccine distribution for developing countries and accessing global reserve funds or Special Drawing Rights. The United Kingdom, hosting this year's G7 process, prioritized climate as a key issue of the UK's G7 presidency.

“The G7 is looking at the most crucial issues for a global recovery that includes everyone,” said Eric LeCompte, the Executive Director of the religious development group Jubilee USA Network and a United Nations finance expert. “Debt, vaccine distribution, protecting our planet and getting enough aid to vulnerable populations are the critical issues.”

Japan's Finance Minister Tarō Asō noted that accessing Special Drawing Rights, a type of currency that could be generated to support all countries, was an important G7 discussion point.

"While no decisions on Special Drawing Rights have been made yet, we continue to see progress," stated LeCompte. "We are seeing more movement on debt relief for developing countries."

The G7 sees debt relief as a critical global response tool for developing countries. Last year the G20 adopted a debt reduction process that allows up to 73 of the world's poorest countries to seek support. Since the beginning of the year, three African countries already sought support under the mechanism. 

Climate issues were raised as an important focus for finance ministers.

“The UK and the US believe now is the time to focus on climate and ensuring our planet can emerge with resilience from the current crisis,” noted LeCompte.

President Biden, as one of his first acts in office, rejoined the Paris Agreement on climate and signed an executive order putting the climate crisis at the center of the US foreign policy. Treasury Secretary Janet Yellen noted the need for significant global stimulus and increasing cooperation with other G7 governments, according to a statement Treasury released.

After Default, Zambia Becomes Third Country Seeking G20 Debt Relief

By Zachary Conti

Zambia requested the G20 coronavirus debt relief process, the "Common Framework for Debt Treatment beyond the Debt Service Suspension Initiative." The process allows up to 73 of the world’s poorest countries to seek support under the mechanism.

“The pandemic is hitting the economies of poor countries pretty hard and many more countries will be requesting debt relief," noted Eric LeCompte who leads the religious development group Jubilee USA and advises the United Nations on debt issues. "Zambia needs serious debt relief. Before the pandemic, 60% of Zambians lived below the poverty line."

Zambia joins Chad and Ethiopia who already triggered the G20 debt reduction process. Zambia was the first African country to default on its debt since the COVID-19 crisis began.

Africa faces its first recession in 25 years as the region struggles with spreading infections and lack of access to vaccines.

“An important part of this debt reduction process is that countries need to ask the private sector to also provide debt relief,” said LeCompte. “As the G20 works out this process, it's essential that they compel the private sector to participate.”