The Jubilee Blog

COP26: New Research Shows Latin American and Caribbean Countries Face Growing Climate Risks

Debt Relief Can Fund Climate Action, Says Religious Development Group

By Olivia Engling

As climate talks continue in Scotland, new research shows that developing countries lack the resources to respond to the climate crisis.

"The Glasgow meetings are critical to protect our planet and the poor who suffer the worst impacts of climate change,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. “Climate-induced natural disasters and food shortages disproportionately affect developing countries."

Ahead of COP26, Jubilee USA Network and LATINDADD released the Atlas of Vulnerability, focused on 24 Latin American and Caribbean developing countries. The map and research found 75% of countries fall below the global average in country capacity to respond to climate change.

"Debt relief can be an effective tool for helping developing countries take action to respond to climate-caused challenges," noted Jubilee USA's Senior Policy Director, Aldo Caliari. Caliari was one of the authors of the new climate research and wrote a paper last year on debt, climate and pandemic response.

The IMF calculates that developing country costs to deal with climate change rises to $140 billion to $300 billion by 2030. According to the United Nations, half of developing countries pay more than 25% of their budgets servicing debt. In October, 48 vulnerable countries asked for a process to use debt relief to support climate action.

“Developing countries struggle with rising debt levels and responding to the pandemic,” added LeCompte. “Debt relief and additional aid are essential for developing countries as they fight climate change."

In 2009 wealthy countries promised $100 billion in annual financing to developing countries by 2020. According to the OECD, developed countries provided almost $80 billion in 2019 and according to 2020 estimates, it was unlikely that the $100 billion target was met. COP26 brings together delegates from 200 countries to agree on climate actions. The meeting in Glasgow, Scotland comes six years after the Paris Agreement, a deal to address the earth's warming temperature caused by fossil fuel use.

White House Announces Puerto Rico Disaster Rebuilding Aid

By: Zachary Conti

The White House announced a $3.7 billion disaster grant for Puerto Rico to rebuild reservoirs, dams, and wastewater facilities.

“Puerto Rico suffers from a debt crisis and is still recovering from hurricanes and earthquakes,” said Eric LeCompte, the Executive Director of Jubilee USA Network, a religious development organization. "The aid is vital as Puerto Rico needs to rebuild infrastructure damaged by disasters."

As earthquakes continue to shake the US Territory, the island feels the aftermath of Hurricanes Irma and Maria which hit Puerto Rico three years ago with an estimated $100 billion in damages.

According to the White House, the new grant award from the Federal Emergency Management Administration brings total hurricane recovery funds to $40 billion. In July, Puerto Rico religious leaders wrote Congress citing the need for an additional $60 billion in recovery aid. The letter was signed by the leaders from Catholic, Methodist, Lutheran, Christian (Disciples) and Evangelical Churches, the Puerto Rico Council of Churches, Catholic Charities (Caritas), and the Puerto Rico General Bible Society.

Read the Jubilee Puerto Rico Religious Leader Letter to Congress here.

IMF Economic Reports: Inequality and Poverty Rising Amidst COVID Crisis

By Zach Conti 

 

Analyzing the economic crisis spurred by the coronavirus, the International Monetary Fund released the Global Financial Stability Report and the 2020 World Economic Outlook Report, "A Long and Difficult Ascent." The economic outlook report projects global economic growth to contract 4.4%.

"While we understand that the IMF wants to look at the crisis with some positivity, the word ascent has little place in this report. It seems that most countries are still descending,” stated Eric LeCompte, the Executive Director of the religious development organization Jubilee USA Network and a United Nations finance expert. “More that 90 million people could enter the ranks of extreme poverty this year and many countries will lose development gains they have made since the 1990s.”

According to the World Economic Outlook Report, income disparities between developed and developing economies is projected to worsen.

"It's not a surprise that the coronavirus economic crisis will worsen inequality and extreme poverty," said LeCompte. "Nearly 90% of all global stimulus was spent in wealthy countries and less than 3% in developing countries."

The IMF cautions that its projections rely on hard to predict public health and economic factors and outcomes could be worse.

The IMF Global Financial Stability report addressed the rising financial needs of developing countries due to the pandemic and rising costs of borrowing.

“Developing countries need their debts cut and access to more aid if they are to survive this crisis,” noted LeCompte.

The G20, IMF and World Bank are meeting this this week on responses to the coronavirus health and economic crisis.

Read the IMF's World Economic Outlook report here.

Read the IMF's Global Financial Stability report here.

New Senate Bill Combats Shell Companies United Nations Debates Tax Havens

Washington DC - A bipartisan group of Senators introduced the "Improving Laundering Laws and Increasing Comprehensive Information Tracking of Criminal Activity in Shell Holdings (ILLICIT CASH) Act" to stop the creation of shell corporations in the United States. The announcement came within hours of world leaders raising concerns about tax havens and shell companies during the UN General Assembly High Level Dialogue on Financing for Development. 

"Shell companies support human trafficking and drain billions from developing countries," said Eric LeCompte, UN finance expert and Executive Director of the religious development group Jubilee USA Network. “This bipartisan legislation can help stop US States from being used as tax havens.”

Senators Mark R. Warner (D-VA), Tom Cotton (R-AR), Doug Jones (D-AL), Mike Rounds (R-SD), Bob Menendez (D-NJ), John Kennedy (R-LA), Catherine Cortez Masto (D-NV), and Jerry Moran (R-KS) sponsored the legislation, which would require shell companies to disclose their true owners to the US Department of Treasury.

"Anonymous shell companies have exploited vulnerable communities through Medicaid fraud and stolen development aid in the developing world,” noted LeCompte.

Credit Suisse Banker Pleads Guilty in Mozambique Loan Scandal

Washington DC - On Friday, former Credit Suisse banker Andrew Pearse pled guilty in US Federal Court for accepting millions of dollars in a fraud scheme that led to a $2 billion Mozambique loan scandal and debt crisis in the East African country. Pearse and six others are accused of taking $200 million in the scheme.

“Mozambique, one of the poorest countries in the world, is dealing with a financial crisis because of the greed of corrupt bankers," said United Nations corruption and finance expert Eric LeCompte and Executive Director of the religious development group Jubilee USA Network. “This behavior is only possible because of a lack of global loan transparency and a lack of public budget transparency in Mozambique.” 

US prosecutors argue that Credit Suisse and Russian-based VTB finance group hid secret loans to the Mozambique government by bribing bank and government officials. The loans were supposed to support the tuna fishing industry, but instead supported the outfitting of boats for military attack crafts. When the secret loans to Mozambique were revealed in 2016, the IMF and World Bank cut ties with the country, halting development funding. This year, Mozambique was hit with two cyclones further impacting the debt ridden and poverty stricken country.

"Mozambique is struggling to recover from a debt crisis and terrible natural disasters," noted LeCompte.

Eric LeCompte Discusses the Anniversary of the Financial Crisis in The National

By Lydia Andrews 

Eric LeCompte, Executive Director of Jubilee USA was recently quoted in The National speaking on transparency and changes in financial policy in the decade after the financial crisis. Read excerpt below and follow link to full article.

A decade after Lehman's collapse, challenges remain

Eric Le Compte, executive director at Jubilee USA Network, agreed. “We’ve seen some progress on [reducing] risky and predatory lending and the US Dodd-Frank Act [of 2010] helped increase transparency in banking,” he said.

“But we still need debt work-out processes to help stop a crisis and greater laws around responsible lending to prevent the conditions for a crisis.”

Read more here.

Eric LeCompte is Cited in Ghana Business News on Debt, Tax and Transparency

By Lydia Andrews 

Eric LeCompte, Executive Director of Jubilee USA was recently quoted in Ghana Business News speaking on transparency. Read excerpt below and follow link to full article.

Lack of transparency in Chinese lending will increase Africa’s debt burden

By Emmanuel K. Dogbevi

Speaking to ghanabusinessnews.com in a telephone interview, Eric LeCompte, Executive Director of Jubilee USA Network, a coalition of religious, development and advocacy groups that works on debt, tax, trade and transparency policies that help end poverty, says Chinese lending lacks the level of transparency that other lending agreements have. This lack of transparency he says will “increase Africa’s debt burden.”

He points out that the situation is driven by the lack of what he calls “responsible lending rules in the international system.”

“China is benefiting from the lack of rules now,” he said.

LeCompte made reference to the period from 2001 to 2005, noting that during that period, growing lending led to debt forgiveness and “debt forgiveness led to economic growth in Africa, but lately the debt burden is growing. You have problems when countries cannot pay,” he said.

According to him, the Chinese are taking advantage of the debt situation to take natural resources from these countries.

“It is absolutely imperative that we find other means to finance African countries,” he added.

LeCompte called for laws to tackle tax avoidance and illicit financial flows from which African countries are losing billions of dollars.

“We need laws for responsible lending and borrowing. We need to look at new creative processes for debt relief. We need laws to curb tax evasion and global bankruptcy rules,” he said.

Read more here.

 

Proyecto de ley del Senado DE EE.UU. le ofrece a Puerto Rico un alivio en su deuda

Una legislación nueva del Senado de EE.UU. le ofrece opciones más a Puerto Rico para recortar su deuda. Los senadores Elizabeth Warren (D-MA), Bernie Sanders (I-VT), Kirsten Gillibrand (D-NY), Ed Markey (D-MA) and Kamala Harris (D-CA) presentaron el proyecto de ley intitulado “Ley para el Alivio a Territorios de EE.UU.”. Si el Congreso de EE.UU. aprobara esta ley, los territorios de los EE.UU. que hayan experimentado un desastre natural, podrían cualificar para recibir un alivio en su deuda.

“Puerto Rico continúa luchando con los resultados causados por los huracanes Irma y María” señaló Roberto O González Nieves, OFM, Arzobispo Metropolitano de San Juan de Puerto Rico. “El impacto de los huracanes fue más agudo en la isla por la la crisis de la deuda pública y las políticas de austeridad fiscal implantadas. Legislación como la presentada en este proyecto de ley, puede proveernos más opciones para obtener un alivio en nuestra deuda y a su vez proveer un incremento en la transparencia en las finanzas públicas de nuestra isla”.

El proyecto de ley también crea una comisión para auditar la deuda, de modo tal, que se puedan identificar las causas de esta última.  Territorios de EE.UU., como por ejemplo Puesto Rico, podrían cualificar para el alivio en su deuda, si dos de los siguientes tres criterios se cumplen. Veamos. Primero, si el territorio ha sufrido una disminución en su población. Segundo, si se encuentra recibiendo ayuda federal para desastres naturales. Tercero, si el total de la deuda por persona excede los $15,000. 

Tanto Puerto Rico como las Islas Vírgenes probablemente cumplen con los requisitos de elegibilidad del proyecto de ley del Senado de EE.UU.  

“Más allá del alivio en su deuda, tanto Puerto Rico como las Islas Vírgenes, necesitan que el Congreso autorice más fondos de ayuda para desastres, para poder reconstruir una infraestructura capaz de soportar tormentas futuras” señaló Eric LeCompte, Director Ejecutivo de Jubilee USA. LeCompte también funge como experto en deuda pública para las Naciones Unidas y a su vez colabora con líderes religiosos de Puerto Rico en busca de una solución para la crisis de la deuda publica en la isla. “Sin un recorte significativo de la deuda publica de Puerto Rico, la esperanza para reducir la alta tasa de pobreza infantil en la isla es muy poca, no menos importante, tan poco se podría alcanzar un crecimiento económico sustentable”. 

Lea la “Ley para el Alivio a Territorios de EE.UU 2018”

Read this release in English

Senate Bill Offers Debt Relief for Puerto Rico

New Senate legislation offers additional options for Puerto Rico to cut its debt. Senators Elizabeth Warren (D-MA), Bernie Sanders (I-VT), Kirsten Gillibrand (D-NY), Ed Markey (D-MA) and Kamala Harris (D-CA) introduced the US Territorial Relief Act. If Congress passes the act, US Territories that experience natural disasters could qualify for debt relief.

"Puerto Rico continues to struggle with the aftermath of Hurricanes Maria and Irma," noted Puerto Rico Archbishop Roberto González Nieves. "The hurricanes were made worse by debt crisis and austerity policies. Legislation such as this, can provide us more options for debt relief and greater transparency in the finances of our island."

The bill also creates an audit commission to study the causes of the debt. US Territories, like Puerto Rico, would qualify for relief if two of three criteria are met. The specific criteria refer to population decrease, receiving federal disaster aid and the total debt per person exceeds $15,000.

 
Both Puerto Rico and the US Virgin Islands likely meet the Senate Bill's eligibility requirements.

“Beyond debt relief, Puerto Rico and the US Virgin Islands still need Congress to authorize more disaster aid to rebuild to withstand the coming storms," stated Jubilee USA Executive Director Eric LeCompte. LeCompte serves on United Nation debt expert groups and works with Puerto Rico religious leaders on resolving the debt crisis. "Without seriously cutting Puerto Rico's debt there is little hope for reducing the high child poverty rate, let alone seeing sustainable economic growth."

Read the U.S. Territorial Relief Act of 2018 

Lea este comunicado de prensa en​ ​español

Call Senate for Puerto Rico Food Assistance

The Senate is about to vote on a Puerto Rico amendment to the 2018 Farm Bill. We need you to make a quick call to your Senators now.

Please urgently call your Senators and ask them to support Senators Marco Rubio and Kirsten Gillibrand’s Farm Bill amendment to extend special disaster aid for nearly 700,000 vulnerable people across Puerto Rico.‎

Since hurricane Maria, overall poverty rates have grown beyond half of the island's population. Nearly 60 percent of children in Puerto Rico live in poverty.

Senators Rubio and Gillibrand introduced a disaster relief amendment to the Farm Bill that allows up to $635 million to be spent on Puerto Rico's version of SNAP or the Supplemental Nutrition Assistance Program.

Already this year because of your actions, we've won more than $30 Billion in recovery aid and provisions for Puerto Rico to rebuild to withstand future storms. For the last several years, we've moved forward measures for debt relief. Now as we move debt relief forward, this amendment helps us pull back some of the impacts of austerity policies.

Call your Senators now and ask them to support Senator Rubio and Gillibrand’s amendment to secure nutritional assistance for the most vulnerable people in Puerto Rico.

The Farm Bill is moving fast. Please call the Senate now.

Thanks,

Kate