The Jubilee Blog

New York Assembly and Senate Champions Vow to Pass Global Debt Relief Bill

Largest New York Labor and Religious Groups Support The New York Taxpayer and International Debt Crises Protection Act 

By Jubilee USA Network

Speaking at a press conference from the famed "million dollar staircase" in New York's State Capitol, State Senator Brad Hoylman-Sigal and Assemblymember Patricia Fahy vowed to pass debt relief legislation, the New York Taxpayer and International Debt Crises Protection Act (A.2970, S.4747).

“The global COVID-19 pandemic and climate disaster have all laid bare just how interconnected the global economy has become today,” said Fahy. “New York is the world’s global financial hub — positioning us well to enact basic changes that will ensure debt relief for developing nations through investments in sustainable growth, infrastructure and more.”

Fahy, the lead Assembly sponsor of the bill, asserted that the initiative will benefit taxpayers and consumers in New York and the US as well as protect the state’s status as the world’s leading financial center. Constituents from across the State of New York descended on Albany on May 2nd to meet with lawmakers to urge passage of the Fahy and Hoylman-Sigal legislation. 

“Our bill will help countries struggling to recover from challenges like climate change and COVID. At the same time, the bill will protect New York taxpayers and reduce the harmful impact of inflation,” said Hoylman-Sigal, the lead sponsor in the Senate of the The New York Taxpayer and International Debt Crises Protection Act.

Developing countries owe more than 60 percent of their debt to private firms. Since 52% of the world's private sector debt is governed by New York law, the New York Taxpayer and International Debt Crises Protection Act (A.2970, S.4747) ensures the private sector participates in relief agreements supported by the US Government.

“Most of the world's countries continue to struggle with the pandemic and food crises,” noted Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. “When developing countries, our trading partners, are in crises we face higher prices for eggs, flour, fuel and coffee."

A large coalition of religious, development, labor and environmental organizations promotes the legislation. Supporters include major unions such as New York AFL-CIO; New York AFSCME and the New York State Public Employees Federation; churches such as the New York State Catholic Conference; the New York State Council of Churches, the United Church of Christ, the Methodist Church and the Presbyterian Church; development organizations such as Oxfam America; Bread for the World and the ONE Campaign; Puerto Rico's Speaker of the House and religious leaders on the island; and environmental groups such as Catholic Climate Covenant and the Rivers & Mountains GreenFaith Circle. 

"Major religious groups and unions support the legislation because it provides aid to people struggling with crises, protects our pensions and can help address inflation," noted LeCompte who serves on United Nations debt expert groups.

Last week, the United Nations Independent Expert on Foreign Debt and Human Rights, Attiya Waris, issued a letter to the New York legislature highlighting how the legislation will advance human rights. 

Read the New York Taxpayer and International Debt Crises Protection Act bill and bill memo here.

Read the talking points for the New York Taxpayer and International Debt Crises Protection Act here.

Read The New York AFL-CIO, the New York State Catholic Conference, the New York Council of Churches, New York AFSCME, Oxfam America, Bread for the World, Puerto Rico and other Memos/Letters of Support for the New York Taxpayer and International Debt Crises Protection Act here. 

Read the In-depth Frequently Asked Questions on the legislation here.

Read the media coverage on the legislation here.

Find Jubilee USA's press releases on the bill here.

Find all of the the New York Taxpayer and International Debt Crises Protection Act resources here.

IMF Forecasts Lowest Growth in Decades as World Leaders Descend on Washington for Meetings

Debt Roundtable Meetings Attempt to Break Impasse on Debt Relief From China and Private Sector

The International Monetary Fund forecasted the lowest global growth in decades as world leaders attend IMF, World Bank, G7 and G20 meetings. The IMF flagship World Economic Outlook report expects growth to fall to 2.8% this year. 

“The ongoing war and high inflation and interest rates are pushing countries into debt and food crises,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. LeCompte has monitored IMF and World Bank policies since 2010. “In the US and around the world more people are facing hunger because of intertwined global crises.”

High debt ratios in low- and middle-income countries as interest rates rise across the world are a concern that the report highlights. The report suggests that debt restructurings will play an important role in reducing debt.

“In the IMF's key report issued this week, they noted the need for there to be processes for debt relief that can deal with multiple countries,” shared LeCompte. "Current debt relief processes are failing to cut debt and get countries the aid they need."

As part of pandemic and financial crisis response, the G20 created a process called the Common Framework to facilitate debt restructuring for more than 70 developing countries. On Wednesday, a group of stakeholders representing the private sector and lending and borrowing countries, met in a forum called the Sovereign Debt Roundtable.

"The Sovereign Debt Roundtable is an attempt to overcome some challenges regarding participation from China and the private sector in current debt relief initiatives," noted LeCompte. "Legislation is moving in New York State, the world's financial center, that ensures the private sector participates in debt relief."

The New York Taxpayer and International Debt Crises Protection Act (S.4747, A.2970) allows developing countries to receive debt relief from the private sector. The legislation sponsored by Senator Brad Hoylman-Sigal and Assemblymember Patricia Fahy ensures the private sector participates in global debt relief agreements and promote global financial stability.

On Tuesday, the IMF released the Global Financial Stability report and found that rising geopolitical tensions increase risks in the financial system through loss of capital, impacts on the banking sector and less opportunities to cushion external shocks.

“Based on IMF analysis, the shock of the Ukraine war is making other economic shocks worse,” added LeCompte. “The war in Ukraine means that the poorest countries have less capacity to face shocks and will suffer the most."

On Thursday, G20 Finance Ministers meet. On Saturday, the IMF and World Bank Spring Meetings conclude. 

Read Jubilee USA's press release on IMF chief Kristalina Georgieva's curtain-raiser speech here. 

Read more about the New York Taxpayer and International Debt Crises Protection Act here. 

Join the Jubilee USA Friday, April 14th, 2:00 PM Community Park Press Conference outside the IMF with leader from the Africa Catholic Bishops, Bishop Charles Kasonde, Rev. Charles Chilufya S.J., Latindadd's Patricia Miranda, Athena Peralta of the World Council of Churches, the AFL-CIO's Policy Director Candace Archer and Jubilee's Eric LeCompte. More info and registration here.

Read the full World Economic Outlook Report here.

Read the full Global Financial Stability Report here.

Find Jubilee USA's April 14th interfaith vigil and press conference details here.

Global Growth Remains Low Amidst Debt Concerns, War and Inflation, Says IMF Head

By Anjoulie Woodhead

The challenges to the global economy and slow economic growth will continue this year, said IMF Managing Director Kristalina Georgieva. Delivering her traditional “curtain raiser” speech before the opening of the IMF and World Bank Spring meetings, she anticipated a 3% growth this year, below 3.4% last year.

“The IMF is reporting bad news for wealthy and poor countries,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. LeCompte monitored IMF policies for more than a decade. “The vulnerable are struggling with the pandemic, inflation and rising food prices.”

For the poorest countries, the IMF chief sees higher debt payments and lower demand for what they export. This could fuel further hunger and poverty increases.

Sixty percent of low-income countries and a quarter of emerging economies are at or near debt crises. Since February the IMF initiated, alongside the Indian Presidency of the G20 and the World Bank, a Global Sovereign Debt Roundtable to resolve disagreements that stall debt relief processes.

“While more countries face debt crises, we still don't have a fully functioning debt relief process,” noted LeCompte. "Developing countries need debt relief and access to more resources."

Georgieva called for donor countries to address funding shortfalls so the IMF maintains capacity to provide interest-free loans to the poorest members. 

Watch the curtain-raiser speech here.

Needs of Poorest, Vulnerable Countries in Focus at United Nations Doha Conference

By Anjoulie Woodhead

Presidents, Prime ministers and leaders of the UN's 46 Least Developed Countries and representatives from all countries meet in Doha to help poor countries respond to multiple crises and achieve development and climate objectives. 

On Sunday, United Nations Secretary General, António Guterres, opened the once-in-a-decade Fifth United Nations Conference on Least Developed Countries. He asserted that debt challenges must be tackled if these countries are going to meet the UN's Sustainable Development Goals.

“Too much debt may be the biggest issue facing most developing countries,” said Eric LeCompte, one of the high-level expert panelists invited to address the leaders. LeCompte heads the religious development group Jubilee USA Network. “The international community must quickly address the global debt crisis and get aid to these countries wrestling with a new food crisis due to the war in Ukraine.”

The conference ends on March 9th. 

View the United Nations' list of Least Developed Countries here.

See the agenda for Wednesday's "High-level Thematic Roundtable 7: Resource mobilization and strengthened global partnerships for sustainable development in Least Developed Countries," here.

Watch on UN TV, the "High-level Thematic Roundtable 7: Resource mobilization and strengthened global partnerships for sustainable development in Least Developed Countries," here.

Majority of Countries Wrestling with Multiple Crises as G20 Finance Ministers Meet in Bengaluru Meeting

G20 Finance Ministers gather for a three-day meeting in Bengaluru, their first under the Indian Presidency. While addressing global debt tops the G20 agenda, the Ukraine war is debated on the sidelines.

"The G20 wants to tackle debt in developing countries that is at its highest in 50 years, as poverty rises and standards of living decline," said Eric LeCompte, a United Nations finance expert and the Executive Director of the religious development group Jubilee USA Network. "I'm worried that progress on a number of key issues will be another casualty of the war in Ukraine." 

At a high-level gathering, the Sovereign Debt Roundtable, a group of borrowing countries, governments that lend money, private lenders and international financial institutions will explore solutions to expedite and make debt reduction more widely accessible and predictable.

“These side meetings are happening because the G20 debt relief initiative is still not supported by some private creditors yet,” shared LeCompte. "We are not waiting for the private sector to join the G20 initiative, so we support new legislation in New York that can make sure the private sector comes to the table."

Under the New York Taxpayer and International Debt Crises Protection Act, private creditors will be required to participate in debt relief initiatives at the same level as the US government, other governments and other creditors and protect US taxpayer-funded debt relief commitments. New York State Senator Brad Hoylman-Sigal, Judiciary Committee Chair, introduced S.4747, a companion bill to A.2970 that Assemblymember Patricia Fahy champions in the Assembly.

During the meetings, the G20 will review progress on using the emergency pandemic aid that the IMF issued in 2021 for developing countries. The IMF released $650 billion in Special Drawing Rights (SDRs) – an emergency currency. Wealthy countries received more than $400 billion and the G20 subsequently committed that rich countries would provide $100 billion of their share to finance low-cost, long term loans to developing countries.

“A key discussion is whether the G20 can support more development bank funding with Special Drawing Rights,” noted Aldo Caliari, Senior Director of Policy and Strategy at Jubilee USA Network. 

The IMF approved loans using the SDRs for five countries to date. The African Development Bank put forward an initiative to use SDRs as capital to finance climate and food security programs in the region.

Leaders plan to discuss proposals to increase development bank lending. Last year, a group of experts that the G20 tasked with producing proposals offered recommendations that could boost lending by hundreds of billions of dollars. The US and other countries led a call to see the institutions lending more to global challenges such as climate and pandemic preparedness.

“Continuing to ask banks to step up to face global crises response will require creativity on how they use capital, and we will very likely need more capital,” stated Caliari.

Read more about the New York Taxpayer and International Debt Crises Protection Act here. 

New York Senate Bill Joins Assembly Bill to Tackle Developing Countries Debt Crises and US Supply Shocks

Private creditors would join debt relief processes supported by Republican and Democratic White Houses for the last 25 years, with new bills introduced in the New York Senate and Assembly.

Countries coping with the pandemic, war and multiple crises can seek debt relief under a new law just introduced by Senator Brad Hoylman-Sigal, Judiciary Committee Chair. Hoylman-Sigal's legislation, The New York Taxpayer and International Debt Crises Protection Act, S.4747, a companion bill to A.2970 that Assemblymember Patricia Fahy champions in the New York Assembly. Proponents assert that the bill will help address inflation and supply shocks hurting New Yorkers.

"As the financial capital of the world, New York has a critical role to play in addressing the crippling debt of other nations," said Hoylman-Sigal. "Our “New York Taxpayer and International Debt Crises Protection Act” (S4747) with Assemblymember Fahy will help countries struggling to recover from challenges like climate change and COVID and better take care of their constituents. At the same time, the bill will protect New York taxpayers and reduce the harmful impact of inflation. I look forward to passing it in this legislative session."

Over the last two years, the heads of the International Monetary Fund and the World Bank argued that financial jurisdictions, like New York State, should have plans for debt relief since private debt is governed by contracts in these financial jurisdictions. More than half of the world's private debt contracts are subject to New York State law.

“The global COVID-19 pandemic, war in Europe, and ongoing climate crisis have all laid bare just how interconnected the global economy has become today,” said Fahy. “New York State is the world’s financial hub — positioning us well to enact basic changes that will ensure debt relief for developing nations through investments in sustainable growth, infrastructure, and more.”

The participation of private creditors in debt relief initiatives at the same level as the US government, other governments and other creditors, will also protect US taxpayer-funded debt relief commitments. Privately-held debt represents more than 60% of debt in developing countries.

“The bill is critical for many countries struggling with soaring poverty rates and debt crises that became worse during the pandemic,” stated Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. The bipartisan group is focused on debt policies because they argue it impacts poverty and inequality in the US and abroad. “Because New York and the United States are relying on these countries for trade, their debt crises affect what we pay for eggs, flour and coffee," continued LeCompte.

Since the legislation promises such benefits to US taxpayers and consumers, the legislation is gaining traction with unions and New York major religious leaders.

“Not only will this legislation protect American taxpayers, it will spur new development and growth within the global economy, reduce stress on international supply chains, and establish clear strategies for growth in nations burdened by massive amounts of debt,” stated Fahy. “I’m proud to introduce the New York Taxpayer and International Debt Crises Protection Act with Senator Hoylman-Sigal and look forward to working on this issue with my colleagues in the state legislature to deliver economic justice for nations and peoples across the globe.”

Yellen: World Bank Should Incorporate Climate and Pandemic Challenges in Fight to End Poverty

By: Anjoulie Woodhead

World Bank poverty reduction work should include growth goals and address climate change, pandemics and other global challenges, asserted Treasury Secretary Janet Yellen on Thursday. Speaking at the Center for Strategic International Studies, she presented US priorities on a World Bank reform process of the Bank's vision, operation and finances.

“The pandemic, war and inflation are increasing poverty around the globe,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. “Yellen knows we've lost decades of work on development and that the World Bank and development banks can do more if we can make these banks more effective."

Last October, the US led calls for a reform process of the World Bank. The agenda includes assessing proposals to increase bank lending by hundreds of billions of dollars.

“As we need development banks to do more, they will need more resources and capital,” added LeCompte. "We also need them to be more innovative to deal with multiple, growing crises."

In a 2021 letter to President Biden, the US Conference of Catholic Bishops and Jubilee USA Network called for significantly increasing multilateral development bank lending power. In March of that year, at a roundtable Jubilee USA convened with Secretary Yellen, some of the US's highest-ranking religious leaders delivered the same request to her. The leaders represented the Catholic, Methodist, Lutheran, Presbyterian and United Church of Christ Churches, as well as the Union for Reform Judaism. 

Addressing a question on debt during Thursday's talk, Yellen remarked how debt restructuring not only serves the interests of the borrowers, it also serves the interests of the creditors. She elaborated that where debt reaches an unsustainable level, it stops the country from growing, developing and investing, and thus it cannot make payments.

“If we are going to be effective in reducing poverty in countries then we need debt to be reduced and more aid delivered to countries,” stated LeCompte. "Debt relief and sufficient economic aid must go hand and hand."

Read Secretary Yellen's speech here. 

Read the World Bank Group Statement on Evolution Roadmap here.

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

Read Treasury Secretary Yellen/Jubilee USA Network roundtable readout and release here.

Concerns of Growth, Pandemic, War and Inflation Top World Economic Forum Agenda

World Bank Cuts Global Growth Forecast as Developing Countries Struggle with Debt

Ministers, business leaders, economists and development groups convened this week for the annual World Economic Forum in Davos, Switzerland. The pandemic, Ukraine war, food crisis and rising inflation dominated talks at the meetings.

“A positive message from the gathering is that a strong economy is built on addressing poverty and protecting our planet,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA, which monitors the forum. “While the gathering can help build consensus on solutions to global problems, we didn't hear any sense of urgency about the economic crises that most countries face.”

The World Bank cut the 2023 global economic growth forecast, noting that only twice in the last two decades did the economy grow more slowly. Those slowdowns occurred in 2008 – the global financial crisis -- and 2020, the pandemic crisis. One-third of developing countries will not regain their pre-2019 income levels until 2024 or later, the recent Bank report found.

“As major economies raise interest rates to counter inflation, the higher rates increase debts for the poorest countries,” LeCompte stated. "As debt becomes more unsustainable, more countries will default and all countries will struggle with greater economic and supply shocks."

The IMF recently announced it will convene a high-level debt roundtable to resolve outstanding issues with a G20 debt reduction initiative that has been in place for more than 2 years.

Read the World Bank's Global Economic Prospects report here.

UN Climate Conference Agrees on Fund to Address Climate Change Impacts in Developing Countries

COP27 Agreement Asserts Climate Change Results in High Debts and Development Failures

Delegates from 200 countries closed this year’s UN climate summit, COP27, with an agreement to create a fund to compensate countries most vulnerable to climate change. The accord reached in Sharm el-Sheikh, Egypt, recognizes that climate-related damage contributes to growing debt burdens and hurts development in countries. 

"During the climate conference negotiations, the concept of loss and damage refers to negative climate change impacts that include extreme weather events, rising sea levels and destruction of forests," noted Eric LeCompte, a United Nations finance expert and leader of the religious development coalition Jubilee USA Network. "A number of countries have chronic debt problems that can be traced to the growing severity and frequency of natural disasters."

Future negotiations will determine the loss and damage fund parameters and set it in motion.

"When wealthy countries took and consumed natural resources from developing countries to fuel industrialization, it spurred global warming and climate change impacts like rising sea levels that developing countries can't stop alone," noted LeCompte. "This new climate fund can start to repay a climate debt that wealthy countries owe to developing countries."

Negotiators also reviewed progress on setting a new climate finance goal and reiterated the plan to finalize it by 2024. In a report commissioned by the COP presidencies of last year and this year, a group of experts estimated developing countries need $1 trillion annually to meet climate goals. Wealthy countries failed to meet a $100 billion annual climate finance commitment, promised in 2009.

“In order to get the resources we need to fight climate change we'll need debt relief, more money from development banks and other innovative sources of aid,” added LeCompte. “This is why G20 and IMF decisions are so critical to raising the resources we need to protect our planet, lives and jobs.”

Last year the Group of 20 decided to create $650 billion in IMF emergency currency or Special Drawing Rights. Developing countries' share was more than $230 billion and the G20 targeted $100 billion of the share wealthy economies received, to finance poorest members. Proposals on debt relief and scaling up loans from global development lenders are also on the group’s agenda. The G20 heads of state met in Bali, Indonesia, on November 15-16, while climate negotiations were still ongoing, and agreed to take action to limit temperature rises to 1.5 °C.

“The G20 commitment to limit global warming helped the Sharm el-Sheikh negotiations at a crucial moment when continuing the target was in doubt,” shared LeCompte. 

Biden and 90 Other Heads of State Descend on COP27 United Nations Climate Summit

Resources for Climate Action and Poor are Major Themes for Egypt Meetings

President Biden joins ninety heads of state in Sharm el-Sheikh, Egypt, for the COP27 climate summit beginning this weekend. UN analysis finds that current action commitments fall short of reaching global warming goals made during the 2015 UN Paris Agreement.

“This year we experienced record heat waves, floods and natural disasters. If we fail to take action to address climate change, we'll see increasingly worse impacts from the climate crisis,” stated Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. “As world leaders gather in Africa, the continent most vulnerable to climate change, we see the impacts of the climate crisis on the poor and our global economy.”

The Organization for Economic Cooperation and Development reported that in 2020 annual climate aid from developed to developing countries was $17 billion short of progress towards a $100 billion target agreed back in 2009. At the UN summit, leaders negotiate a revised climate action funding target for beyond 2025. 

"More than half of developing countries spend a quarter of their budget on paying debt," noted LeCompte, a United Nations finance expert. "Debt relief is an important part of reaching climate action goals for countries."

At October IMF and World Bank meetings, climate action was a critical part of discussions on debt and lending. Global leaders began a process to reform development banks to lend more for global priorities such as climate. A new IMF process also began that uses donations from wealthy countries to support long-term, cheap loans to developing countries that can support climate action.

“The success of the climate summit is all about showing us the money,” shared LeCompte. "The bottom line is whether or not we can raise the financial contributions to address the climate crisis."