The Jubilee Blog

Wealthy Countries Must Share Pandemic Relief Aid, Organizations Say

By Jack Scott

In a letter to finance ministers, 250 organizations call on wealthy countries to donate IMF emergency currency they don't need to poor countries. In August, the IMF created $650 billion in Special Drawing Rights (SDRs) to support global coronavirus response. More than $400 billion went to wealthy countries and $230 billion went to developing countries.

“Wealthy countries recovering from the pandemic don't need the currency, while poor countries need the aid for vaccinations and the growing amount of people living in poverty,” said Aldo Caliari, one of the letter’s organizers and Senior Director of Policy for religious development organization Jubilee USA Network.

Letter signers said SDR sharing should provide debt-free and unconditional aid. The 250 groups raised concerns about the needs of middle-income developing countries.

“The pandemic revealed all developing countries, no matter their income, are vulnerable,” stated United Nations finance expert and Jubilee USA Executive Director Eric LeCompte. "The worst job losses and poverty increases during this crisis are taking place in developing middle-income countries, which are most of the world's countries," continued LeCompte. "The IMF and G20 need to support more options to get Special Drawing Rights to help these countries."

The letter states SDRs can finance health, education and efforts to protect the environment.

On October 1, Jubilee USA sponsors an event featuring IMF, UN and developing country speakers to discuss pandemic vulnerabilities in middle-income developing countries. On October 4, letter signers present their asks during an event with IMF Managing Director Kristalina Georgieva and Director of the IMF Strategy Policy and Review Department, Ceyla Pazarbasioglu.

Read the CSO letter here.

Watch the Civil Society Policy Forum event "Mapping Pandemic Vulnerabilities in Developing Countries" here.

Watch the Civil Society Policy Forum event "Making the Most of Special Drawing Rights: Approaches to Maximize Impact and Create a Sustainable and Just Recovery" here.

Read Jubilee USA's press release on the creation of Special Drawing Rights here.

White House Holds Global COVID Summit at United Nations

By Mahati Kalaparthy

On the sidelines of the UN General Assembly, President Biden virtually hosts world leaders to make commitments for global vaccine and health equipment distribution. 

“As many developing countries struggle with a fourth wave of the pandemic, vaccines and treatment cannot come soon enough," noted Eric LeCompte who is attending the White House summit. LeCompte is the Executive Director of Jubilee USA Network and a UN finance expert. "The longer it takes to vaccinate the majority of the world's population translates to more virus variants and shocks to the global economy."

The White House summit focuses on targets of vaccinating at least 70% of every country's population, regional distribution hubs for protective equipment and global access to COVID treatments. 

"Bringing together heads of state and business leaders, Biden is filling a global leadership void to save lives and prevent more challenges to the global economy,” added LeCompte. "We face a more dire situation because the G20 failed to deliver on financing global vaccine distribution this summer."

In August, LeCompte and major religious leaders met with US Trade Representative Katherine Tai on waiving COVID vaccine patents to increase vaccine production and access for developing countries.

"We agree with the White House on waiving vaccine pharmaceutical patents to boost global production of vaccines," stated LeCompte. "We don't expect the summit to focus on this critical issue."

Read about the US Trade Representative Tai/Jubilee USA Network roundtable here.

Most Countries to Lose a Decade of Development Progress says United Nations as Global COVID Crisis Continues

By Jack Scott

Poor countries will lose a decade of development and face slow economic recovery according to United Nations analysis. Developing countries will lose $12 trillion through 2025 because they lack vaccines and the resources that wealthy countries use to stimulate their economies.

“The economic and health crisis is getting worse in most countries,” said Eric LeCompte, a UN finance expert and head of the religious development group Jubilee USA Network. “Developing countries need vaccines and more resources to confront the pandemic. Without more aid, there is little chance that poor countries can meet development goals."

According to the flagship report from the United Nations Conference for Trade and Development, developing country debt increased during the crisis. From 2019 to 2020, developing country debt increased while sales from their exported products fell.

“Debt relief must move more quickly and must include all developing countries mired in this crisis,” noted LeCompte. "Developing countries that are categorized as middle-income countries, face the worst extreme poverty increases and job losses because of the pandemic. Unfortunately, these countries are currently left out of processes to cut their debts."

The G20 agreed to suspend debt payments for 73 of the poorest countries through December and created a process for the same countries to reduce debt. The G20 Common Framework debt relief process excludes most developing middle-income countries.

The report welcomed the August creation of $650 billion in emergency reserve currency, also known as Special Drawing Rights, to fight the pandemic. At the same time, the UN agency warned that the resources fall short of the current needs of developing countries. More than $230 billion of the reserve funds reached developing countries.

The United Nations report concludes that more aid, debt relief and changes to the financial system are needed for most countries.

“After the 2008 financial crisis world leaders worked on crisis resolutions tools to make the financial system more stable. Unfortunately, we failed to implement those tools, the tools that may have limited or prevented the current crisis," stated LeCompte. "Now we face a greater economic crisis and we must implement strong crisis resolution tools to help solve the current crisis and prevent the next one."

UNCTAD members meet on October 3-7, hosted by Barbados, to adopt its next four-year work plan.

Read the 2021 UNCTAD report here.

Read Jubilee USA's statement on the creation of Special Drawing Rights here.

Treasury Secretary Yellen Encourages Tax and Aid Deals to Confront Pandemic

By Jack Scott

Improving tax collection raises needed resources for countries, noted Treasury Secretary Yellen at a virtual G7 finance ministers meeting. Yellen praised a July G20 agreement to curb corporate tax avoidance. The agreement is supported by 134 countries.

“We are seeing significant progress on curbing global corporate tax avoidance,” said Eric LeCompte, Executive Director of the religious development organization Jubilee USA Network. “As new tax agreements move forward, developing countries must be included. Too many countries lack the resources to combat the pandemic because they aren't collecting adequate tax revenue."

Yellen encouraged her G7 counterparts to lend their shares of a recent emergency currency creation of $650 billion for global pandemic response. In August, the International Monetary Fund authorized the emergency response funds known as Special Drawing Rights. G7 countries received more than $280 billion and developing countries received around $230 billion of the emergency currency. Wealthy countries can donate or lend their Special Drawing Rights to developing countries.

“Rich countries don't need their share of emergency pandemic response funds," noted LeCompte who serves on United Nations finance expert groups. “Given the level of suffering in developing countries, wealthy countries should donate their funds instead of lending them to poor countries."

Read Treasury's readout of the G7 meeting here.

Read about the historic $650 billion SDR allocation here.

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