The Jubilee Blog

G7 Presses China and Private Creditors on Debt Relief

Ukraine War, Debt and Inflation were Focuses of the G7 Meeting

Washington DC – G7 finance ministers issued their strongest statement to date pressing China and the private sector to engage in debt relief efforts for developing countries. Germany, holding the G7 presidency this year, hosted the meetings in Bonn and Königswinter.

“The G7 put the spotlight on the need for China and the private sector to participate in debt relief initiatives,” noted Eric LeCompte, Executive Director of Jubilee USA Network. LeCompte has monitored the G7 meetings for more than a decade.

G7 countries stressed the need for private creditors to participate in debt relief. On Thursday, New York State Assemblymember Patricia Fahy introduced the New York Taxpayer and International Debt Crises Protection Act. The bill compels private creditors operating under New York State law to participate in debt relief initiatives at the same level as the US government, other governments and other creditors.

“New York legislative action ensures private creditors will participate in the debt relief that the G7 is calling for,” added LeCompte.

The G7 pledged to support Sri Lanka debt restructuring efforts as the developing country became the latest one to default.

“The fact that Sri Lanka is not covered by current debt relief agreements shows the urgency of expanding relief initiatives to more countries facing crises,” stated LeCompte.

The Ukraine war, inflation, food and climate action were key aspects of the three-day meetings. G7 presidents and heads of state meet in Schloss Elmau, Germany in June.

Read our press release on the newly-introduced New York Private creditor bill here.

Read the full G7 Finance Ministers Communiqué here.

New York Legislation Focuses on Pandemic Aid for Developing Countries and Requires Private Creditors Join in Debt Relief Deals for Poor Nations

US Taxpayers, Consumers and Economy Poised to Benefit from Action

Washington DC – A newly introduced bill in New York State aims to help resolve debt and economic crises that developing countries face in the wake of the pandemic.

"Most of the world's private debt is contracted and arbitrated under New York State law," noted Eric LeCompte, the Executive Director of the religious development coalition, Jubilee USA Network. LeCompte serves on United Nations debt working groups. "As most countries face terrible economic and debt crises due to the pandemic and the Ukraine war, decisions made in New York will impact how developing countries can resolve their debt crises."

Under the New York Taxpayer and International Debt Crises Protection Act, private creditors would participate in debt relief initiatives at the same level as the US government, other governments and other creditors. State Assemblymember Patricia Fahy sponsors the legislation introduced on Thursday.

The supporters of the legislation point out that the bill will benefit New York residents too.

“The bill addresses debt crises in developing countries, protects US taxpayers and helps limit economic and supply shocks,” said LeCompte whose organization has won more than $130 billion in debt relief initiatives for poor countries.

The pandemic accelerated economic crises in developing countries, which saw debt rise in 2020 by five times the average increase of previous years. The US led the G20 to create a process that allows up to 73 of the world’s poorest countries to obtain debt relief from all creditors. Currently, Chad, Ethiopia and Zambia have requested relief from the G20 Common framework process. The newly-introduced bill requires that all private creditors who fall under New York State law participate in the G20 and other international relief processes.

“Debt relief is longstanding US policy with bipartisan support,” added LeCompte. “Facing the pandemic in developing countries and ensuring long-term financial stability requires that all creditors support debt relief."

Private creditors hold more than 60% of debt of developing countries. Research shows that when debt restructurings take place, private creditors receive on average 20% more than their public taxpayer-funded peers.

“Resolving debt crises is about protecting people in developing countries and protecting against inflation and the other impacts these crises have on our own economy,” shared LeCompte.

Treasury Secretary Janet Yellen and the IMF consider pandemic-related economic disruptions, later worsened with the Ukraine war, are behind rapid price rises hitting consumers in the US and other wealthy economies. US inflation reached a four-decade high in March. 

Biden, G7, G20 Host Second COVID Summit

Leaders Pledge Vaccines, Treatments and Health Investment

By Mizraim Belman

President Biden hosted heads of state and philanthropy and private sector leaders for a second summit on COVID-19 response. At the virtual gathering, leaders of over 35 countries pledged actions to vaccinate 70% of the world population, expand access to tests and treatments and invest in global health security.

“Too many developing countries lack access to vaccines, treatments and medical equipment to fight the coronavirus,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. “The White House is playing a vital coordinating role for a global response to the health crises spurred by the pandemic.”

President Biden co-hosted the summit with chairs of the G7, G20, the African Union and CARICOM. In September, the Biden Administration organized the first COVID summit, on the sidelines of the United Nations General Assembly.

The World Health Organization estimates 15 million people have died due to the coronavirus. In Africa, only 12% of the population is fully vaccinated. 

“Continued spread of the virus keeps alive the threat of new mutations that could be more lethal or elude vaccines," added LeCompte. "Now developing countries are also dealing with food and fuel challenges because of the war in Ukraine. Without more aid and debt relief, many countries won't have the resources to confront the pandemic or prepare for future health threats."

The US pledged additional funds for a proposed global pandemic fund at the World Bank that the G20 supports, bringing the US total pledges to $450 million. At the meeting World Bank chief David Malpass announced he expects to launch the fund, which collected almost $1 billion in commitments, in June.

Biden reaffirmed the US commitment to deliver one billion vaccines to developing countries, half of which the US already sent.

“While vaccine distribution played into the conference, much of the focus was on preparing for future health crises,” stated LeCompte.

AFL-CIO/Jubilee Ukraine Pandemic Barron's Commentary

Eric LeCompte and Cathy Feingold, the Deputy President of the ITUC and International Director of the AFL-CIO, writing for Barron's call for global economic policies in response to the Ukraine war and the health and economic crises severely impacting most of the world due to the pandemic. Read the full article here.

A Resilient Global Economy Is Within Reach

By Eric LeCompte and Cathy Feingold

War rages in Ukraine and a global crisis looms. Gas prices rise and around the world, wheat, corn and fertilizer prices skyrocket. The International Monetary Fund says the global economy will slow, contributing to food shortages in developing countries. Russia’s war on Ukraine combined with Covid-19 made a terrible global situation worse. There are economic policies that Republican and Democratic leaders can find common ground with the Biden administration to make the U.S. and global economy more resilient in the face of these threats.

Before the war, the pandemic revealed the catastrophic consequences of persistent global poverty and inequality for everyone—not just the poor. In response, U.S. economic strategy must focus on transparency, democracy, and what Pope Francis calls “a preferential option for the poor.”

The Ukraine crisis shows what a difference U.S. leadership makes. As the world suffers impacts from the war and pandemic, our country can and must be the respected neighbor whom others look to in a crisis. We can bring other countries together to help ensure our global future is peaceful, prosperous and democratic. Covid shows that public health is global—when some of us are vulnerable to the disease, we all are. The same is true of economic prosperity. With supply and economic shocks, U.S. prosperity depends on global prosperity.