The Jubilee Blog

IMF Creates Historic $650 Billion in Emergency Funds to Fight Pandemic

Jubilee USA Estimates Wealthy G7 Countries Receive $280 billion and Developing Countries Receive $230 billion from an IMF Currency Creation

By Olivia Engling

On Monday, the IMF creates $650 billion of Special Drawing Rights (SDRs), the largest IMF emergency currency creation in history in order to fight the pandemic. 

"Most countries are dealing with severe health and economic crises spurred by the coronavirus," noted Eric LeCompte who directs the religious development group Jubilee USA Network. Since March of 2020, Jubilee USA advocated for SDRs and organized 268 organizations to support the IMF action. "From buying food to providing healthcare, developing countries can use these emergency funds to respond to the coronavirus crisis in their own countries."

More than $230 billion of SDRs goes to developing low-income and middle-income countries. The G7 countries will receive more than $280 billion.

“About 40% of all of the emergency currency will be received by seven of the world's wealthiest counties,” explained LeCompte. "The G7 and other wealthy countries don't need these reserve funds and should donate them to developing countries for pandemic response."

Countries can use SDRs to increase government savings, fund programs or donate them to other countries. Based on current publicly available IMF data, Jubilee USA calculated that the United States receives $113 billion and all of Africa receives $33 billion in SDRs.

See Jubilee USA's calculation of the approximate amount each country will receive in emergency SDRs currency here.

Read Jubilee USA's IMF COVID response letter calling for Special Drawing Rights aid with nearly 270 signatories here.

Read the SDR letter signed by 240 global groups organized by Jubilee USA and Latindadd here.

Read Jubilee USA and the US Conference of Catholic Bishops joint letter to the White House on SDRs here.

Read About the March High-Level Treasury Secretary Yellen/Jubilee USA Network Religious Leader roundtable that Included SDRs here.

 

Haiti Earthquake Calls for Debt and Aid Relief

By Olivia Engling

On Saturday a 7.2 magnitude earthquake hit Haiti. The death toll is 1,300 and rising. Haiti is one of the poorest countries in the world and owes $2.2 billion in external debt, most of it to other countries and international financial institutions.

“In addition to this tragic loss of life, Haiti is dealing with COVID-related health and economic crises, and never fully rebuilt after the 2010 earthquake,” said Eric LeCompte, Executive Director of Jubilee USA Network. “Haiti spends $8 on health per person annually, with 60% of people living below the poverty line.”

Since April 2020, as part of the IMF's response to COVID, Haiti saved $17 million through a process to cancel debt payments of 28 poor countries called the Catastrophe Containment and Relief Trust (CCRT). However, without a decision to extend the relief period, Haiti will resume debt payments in November. The same process also allows IMF debt relief for countries hit by a natural disaster causing large-enough damage. Haiti’s debt to the IMF stands at $185 million.

Initially, the CCRT was a post-disaster debt relief mechanism that Jubilee advocated for in response to Haiti's 2010 earthquake, which killed more than 250,000 people and inflicted financial losses amounting to 120% of the economy. Jubilee's efforts led to more than $1 billion in debt relief for the Haitian people at that time. Later Ebola-hit countries received debt relief through the CCRT and last year, IMF members used it again in response to COVID.

“The international community needs to mobilize all its aid and debt relief tools to contain this calamity,” LeCompte added.    

Trade Rep Tai and Major Religious Leaders Hold Historic Meeting on Vaccines and COVID Response

By Olivia Engling

 

Some of the highest ranking religious leaders met with US Trade Representative Katherine Tai to express support for waiving vaccine patents. The measure, the religious leaders argue, will increase COVID vaccine access for developing countries. 

“The meeting with Tai was positive and she understands the urgent need to increase vaccine production for developing countries,” shared Eric LeCompte, the Executive Director of Jubilee USA which organized the Tai meeting with religious leaders. “Waiving vaccine COVID patents will help produce more vaccines and save lives in the developing world.”

According to the United Nations, poor countries received less than 1% of COVID vaccine doses. The World Trade Organization is considering temporarily waiving pharmaceutical patents so developing countries could produce vaccines, tests and treatments.

Leaders of the Catholic, Methodist, Episcopal, Lutheran, Presbyterian and United Church of Christ Churches and AFL-CIO joined Jubilee USA for the meeting. Beyond COVID response, the group discussed trade policies that protect the environment and jobs and prevent future crises in developing countries. 

"Religious institutions and voices are strongly urging that all COVID solutions protect the vulnerable, jobs and our planet," noted LeCompte. "This is the first time a US Trade Representative met with major religious leaders. The meeting was important because all of the faith leaders represent communities in the developing world who are facing devastating third and fourth waves of the pandemic."

In March, Jubilee USA organized a meeting between high-ranking faith leaders and Treasury Secretary Janet Yellen on pandemic response.

View the US Trade Representative Tai/Jubilee USA Network roundtable agenda and speakers list here.

Read about the WTO COVID vaccine patent waiver process here.

Read about the Secretary Yellen/Jubilee USA Network roundtable here.

IMF Approves $650 Billion in Emergency Currency to Combat Pandemic

By Olivia Engling

The IMF Board of Governors convened a special virtual session for final approval of US $650 billion in emergency reserve currency or Special Drawing Rights (SDRs). Countries will receive their share of Special Drawing Rights on August 23rd.

“More than $200 billion of these new reserve funds will go to developing countries to support pandemic relief and recovery efforts,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. “While these resources are needed, developing countries must receive more aid to get beyond the crisis.”

More than $400 billion of the emergency currency goes to wealthy countries. Wealthy countries can donate their SDRs to developing countries directly, or through initiatives from the IMF or development banks.

“Most wealthy countries don't need their share of Special Drawing Rights and they need to donate them quickly to developing countries struggling with the health and economic crisis,” stated LeCompte.

Read Jubilee USA's IMF COVID response letter calling for Special Drawing Rights aid with nearly 270 signatories here.