Puerto Rico's public utility company, the Puerto Rico Electric Power Authority (PREPA), reached a dealWednesday with investors to extend debt negotiations. PREPA will pay $416 million immediately and then will have untilSeptember 15 to reach a long-term deal. PREPA owes a total of $9 billion in debt. Puerto Rican Governor Alejandro Garcia Padilla announced this week that the island cannot pay its $72 billion debt burden and asked to extend payment terms.
"Without access to US bankruptcy law or emergency financing, Puerto Rico has few options," said Eric LeCompte, executive director of the religious development organization Jubilee USA Network. It's good news that Puerto Rico won't default in the short term, but we need a long term solution."
Meanwhile, Senator Charles Schumer (D-NY) announced Tuesday he will introduce a bill to allow PREPA to access US Chapter 9 bankruptcy protection. Puerto Rico's representative in the US House introduced a similar bill (HR 870) in February. Puerto Rico is currently unable to access bankruptcy protection because it is a territory and not a US state.
"Congress should immediately extend bankruptcy protection to Puerto Rico. The island should have the same protections as any US city or state," LeCompte stated. "Bankruptcy law protects both investors and debtors from crises just like this."
Read more about HR 870.
Read more about Puerto Rico's debt situation.
Jubilee USA Network is an alliance of more than 75 US organizations and 400 faith communities working with 50 Jubilee global partners. Jubilee's mission is to build an economy that serves, protects and promotes the participation of the most vulnerable. Jubilee USA has won critical global financial reforms and more than $130 billion in debt relief to benefit the world's poorest people. www.jubileeusa.org
This week's Nepal donor conference pledged $4.4 billion in aid to Nepal, short of the $6.6 billion Nepal requested for earthquake recovery. About half of the total financing is loans and half is grants. Nepal did not receive any pledges of debt relief while world leaders gathered in Kathmandu. The International Monetary Fund (IMF) said Thursday Nepal will not qualify for its new emergency debt relief trust fund.
"The initial aid pledges are helpful and we can close the $2 billion gap quickly with debt relief," said Eric LeCompte, Executive Director of the religious development organization Jubilee USA Network. "One of the quickest ways that the World Bank, Asian Development Bank and governments can deliver rebuilding grants is by canceling debt."
Nepal spends $600,000 a day paying its debt, or more than $35 million since the first April earthquake.
The World Bank and the Asian Development Bank pledged a combined $1.1 billion in new concessional loans and grants. Nepal already owes the World Bank and Asian Development Bank approximately $3 billion.
Although the World Bank has not announced plans for a debt relief fund, the IMF created the Catastrophe Containment and Relief Trust in the wake of the Ebola crisis and cancelled $100 million of West Africa's debt. IMF spokesperson Gerry Rice said ThursdayNepal met the first requirement for relief but that the earthquake did not cause enough total economic damage. Rice did not reference whether or not damage to Nepal's "productive capacity" pulled another trigger for the fund to release about $23 million in debt relief.
International Monetary Fund (IMF) spokesperson Gerry Rice announced Nepal will not receive debt relief from a special IMF trust fund that helps poor countries when they face natural disasters. The IMF's Catastrophe Containment and Relief Trust cancelled nearly $100 million in debt owed by Ebola-impacted West African nations. Jubilee USA Network, a religious development organization, advocated for the trust fund and debt relief for West Africa and Nepal. A powerful earthquake struck Nepal April 25, killing more than 8,600 people and destroying over 500,000 homes.
"This is troubling news," said Eric LeCompte, a United Nations debt expert and executive director of Jubilee USA Network. "Given the devastation in Nepal, it's hard to believe that the criteria was not met."
Nepal is one of 38 low-income countries eligible for relief from the new fund. To qualify for that relief after a natural disaster, an eligible country must meet certain criteria. The disaster must impact at least one-third of the country's population and either destroy 25% of the nation's productive capacity or cause damage equal to the size of the country's economy. According to Rice, Nepal met the first condition but the earthquake did not cause enough total economic damage. Nepal's earthquake and its aftershocks caused $5-10 billion in damage, about one-third of the country's total economy. However, Rice did not comment on whether or not Nepal's productive capacity met the the threshold to trigger debt relief under the trust.
"This fund was created for situations just like this and debt relief in Nepal could make a significant difference," said LeCompte. "Beyond the IMF, the World Bank and Asian Development Bank who hold about $3 billion of Nepal's debt have unfortunately not announced any debt relief plans yet."
World leaders gather in Kathmandu around Nepal's request for USD 6.6 billion in rebuilding aid after a series of spring earthquakes. United Nations Secretary-General Ban Ki-moon is attending June 25negotiations where Nepal's 3.8 billion debt is on the table as part of an earthquake recovery package. Nepal spends $600,000 a day servicing debt, or more than $35 million since the first April earthquake.
"Nepal is requesting relief from some debt payments as a portion of the aid plan," said Eric LeCompte, Executive Director of the religious development organization Jubilee USA Network. "Nepal's government is being too careful to call for total debt cancellation because of misplaced worries that they'll scare off investors."
Nepal is one of 38 countries eligible for debt relief from the International Monetary Fund's (IMF) new debt relief trust fund. The IMF created the Catastrophe Containment and Relief Trust to relieve a country's debt payments when a natural disaster impacts a third of the country's population and destroys 25% of the nation's productive capacity. If Nepal qualifies for the trust, it could receive $23 million in debt relief of the $54 million it owes the IMF.
UN negotiators struggle to find consensus on debt, trade and tax policies on the last day of scheduled negotiations before heads of state, business leaders and development organizations meet for the July Financing for Development (FfD) conference in Addis Ababa, Ethiopia.
"These meetings offer a rare opportunity to raise needed resources to confront extreme poverty," said Eric LeCompte, executive director of the religious development organization Jubilee USA Network. LeCompte was in New York for the negotiations. "More than a trillion dollars can be raised annually if we win policies that promote responsible lending and curb corruption and tax evasion."
A package of trade bills stalled today when the US House of Representatives defeated one portion of the package while voting in favor of another. Trade Adjustment Assistance, a program to assist US workers who lose their jobs because of trade agreements, failed by a vote of 302-126. This worker assistance is part of the Trade Act of 2015 which would give President Obama Trade Promotion Authority (TPA) to move international trade agreements through Congress without amendment. Congress must pass trade assistance within two remaining legislative days in order for TPA or "fast track" to be sent to President Obama's desk.
"Whether or not the package passes, Congress can amend harmful arbitration provisions that favor predatory actors over vulnerable people," said Eric LeCompte, executive director of the religious anti-poverty organization Jubilee USA Network.
The House Rules Committee rejected an amendment by Congressman Mark Pocan to prevent Congress from using Trade Promotion Authority to advance trade deals that contain Investor-State Dispute Settlement mechanisms. These mechanisms allow companies to sue countries over disputes related to trade agreements. Predatory financial firms are known to use the tribunals to sue countries in economic distress to collect on debts purchased on the secondary market. In 2013, a Slovakian firm sued Greece, arguing that the country's debt restructuring violated the terms of its investment treaties with Slovakia and Cyprus. On May 22, the Senate defeated a similar amendment to the Senate TPA bill 60-39.
See the similarities of the murder today of an innocent man by the fbi and a Boston cop to the efforts by the fbi and police to kill me .
G7 finance ministers gather in Dresden, Germany, to discuss promoting "sustainable growth" in the face of growing global debt. US Treasury Secretary Jacob Lew is among the ministers gathering. The meeting takes place amid debt crises in the Eurozone and the developing world. The ministers meet after the International Monetary Fund (IMF) reported slow economic growth and increased debt burdens during the IMF/World Bank Spring Meetings.
"It's impossible to experience sustainable growth, when wealthy and poor countries are struggling with unsustainable debts," stated Eric LeCompte, Executive Director of Jubilee USA Network, who is in Dresden for the meetings.
The finance ministers gathered in Dresden include Joe Oliver of Canada, Michel Sapin of France, Wolfgang Schäuble of Germany, Pier Carlo Padoan of Italy, Taro Aso of Japan, George Osborne of the United Kingdom and Jacob Lew of the United States. Jubilee USA joined Jubilee Germany in Dresden for several G7 outreach events organized on the growing debt crisis.
The camp will be from August 4-8, 2015! The Location will be at the Emigrant Lake campground near Ashland, Oregon for campers age 13 to 19. The Camp registration fee is $150.00, but no one will be turned away if they can’t afford the fee meaning scholarships are available. Transportation assistance will be available and vans will be running from at least Portland and Eugene, Oregon and northern California.
According to the most recent public World Bank figures, Nepal pays $594,000 a day in debt payments as cited by the religious development organization, Jubilee USA Network. World Bank figures report that Nepal owes $3.8 billion in foreign debt and in 2013 paid $217 million in debt payments, or nearly $600,000 a day. Nepal was already one of the world's poorest countries, ranking 145th out of 187 countries listed on the United Nations Human Development Index, before an April 25th earthquake hit the country killing more than 8,000 people. On Tuesday another earthquake of 7.3 magnitude killed more than 100 additional people in the country.
"It's mind-blowing that one of the poorest countries in the world, struggling with earthquake recovery, pays $600,000 a day on debt," said Eric LeCompte, Executive Director of Jubilee USA. "That's $4 million a week that could be going toward recovery and rebuilding."
As Nepal scrambles to rebuild before the approaching Monsoon Season, it finds itself in debt to the tune of $1.5 billion to the World Bank and another $1.5 billion to the Asian Development Bank. The country also owes $133 million to Japan and $101 million to China.
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