Jubilee USA Network

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Jubilee USA Network
TypeNon-profit
PurposeFinancial Reform / Anti-Poverty Advocacy
Headquarters Washington, D.C.
Membership
Non-profits, Faith Communities and Congregations
Executive Director
 Eric LeCompte
Main organ
Board of Directors [1]
Affiliations ActionAid International USA, AFL-CIO, American Jewish World Service, Church World Service, Episcopal Church USA, Evangelical Lutheran Church in America, Friends of the Earth, Leadership Conference of Women Religious, Mennonite Central Committee, Presbyterian Church (U.S.A.), Religious Action Center of Reform Judaism, Sojourners Community, Unitarian Universalist Association, United Church of Christ - Neighbors in Need, United Methodist Church - General Board of Church and Society. (partial list)
Website JubileeUSA.org

Jubilee USA Network is a nonprofit financial reform organization based in Washington D.C. Jubilee USA's work began in conjunction with the global Jubilee 2000 movement, founded in the late 1990s to advocate for debt relief for developing countries. It is "an alliance of more than 75 U.S. organizations, 650 faith communities and 50 Jubilee global partners." [2]

Contents

Origin and mission

The name "Jubilee" is derived from the Biblical Jubilee in Leviticus , a system of debt cancellation, land restoration and liberation from bondage embedded in a 7-year cycle. Jubilee USA is located in Washington D.C. and is a coalition of approximately 75 national religious and development organizations [3] and about 400 communities of faith across the country. It describes its mission as "building an economy that serves, protects and promotes the participation of the most vulnerable". [4] [ third-party source needed ]

Advocacy

Jubilee USA primarily advocates for financial reforms that argues to help impoverished communities. Those reforms include rules governing "responsible lending and borrowing", halting corporate tax avoidance, particularly in the developing world, reforming international financial institutions like the International Monetary Fund (IMF), creating an international bankruptcy system and advancing trade policies that promote the common good.[ citation needed ]

Leadership

Jubilee USA is governed by a steering committee ("Network Council") that consists of roughly 75 national organizations and a board of directors. Many of the organizations are religious, including American Jewish World Service, Church World Service, a number of Catholic orders and the national Lutheran, Presbyterian, Methodist, Unitarian, Episcopal and United Church of Christ churches. Other notable groups on the council include the AFL–CIO and ActionAid. [5]

Core issues

Responsible lending and borrowing

One of Jubilee USA's stated main goals is to promote principles of Responsible Lending and Borrowing. These principles would purportedly guide lending decisions made by governments and international financial institutions, such as the World Bank and International Monetary Fund. Jubilee USA's Executive Director, Eric LeCompte, was part of the United Nations Conference on Trade and Development (UNCTAD) working group that created a document called Principles on Promoting Sovereign Lending and Borrowing. [6] The UNCTAD principles guide lending and borrowing decisions. For lending countries, the principles include ensuring that borrowing countries have the capacity to pay back the loan and adhering to UN sanctions. For borrowers, the principles include ensuring that information about the nature of the debt negotiations are available to all stakeholders, including citizens, as well as ensuring that governments avoid over-borrowing.

In 2008, Jubilee USA introduced legislation aimed at increasing debt cancellation for developing countries and instituting lending and borrowing guidelines. The Jubilee Act for Responsible Lending and Expanded Debt Cancellation [7] passed the House of Representatives by a vote of 285–132 [8] but was not adopted by the Senate. [9] According to the Library of Congress summary, the legislation would have directed the US government to work within the IMF, Paris Club, World Bank and other institutions to expand previous debt cancellation programs for developing countries. It would have also directed the Treasury Secretary to "commence immediate efforts to establish a framework for responsible lending". The bill was sponsored by Congresswoman Maxine Waters (D-CA) and cosponsored by 104 House members. [7]

Corporate tax avoidance

The organization aims to stop corporate tax avoidance and to promote financial transparency and accountability. It argues that poor countries are forced to borrow money (and thus increase debt burdens) because of a lack of domestic revenue, and that corporate tax avoidance is a large factor in that lack of revenue. Jubilee USA is a co-founder of the FACT Coalition, [10] which includes groups such as Global Financial Integrity, US Public Interest Research Group and Global Witness.

International financial institution reform

The organization attempts to reform international financial institutions such as the IMF and World Bank. It ran a multi-year campaign to move the IMF to give several billion dollars worth of windfall gold sales profits to poor countries. [11] It advocates for transparency in decision-making and policy processes; its work in the Caribbean on IMF debt restructuring has received coverage in the National Catholic Reporter [12] and Inter Press Service. [13]

International bankruptcy system

The organization's final goal is the formation of an international bankruptcy system for countries. This system would involve a neutral arbiter that would decide the merits of debt claims and process bankruptcy proceeding when countries no longer can service their debts. This issue has received increased coverage in light of the recent Argentina/NML Capital case. [14] Jubilee USA has argued that such a bankruptcy system would prevent this type of litigation by forcing all creditors to negotiate under an existing set of rules and receive equivalent treatment. [15]

Vulture funds

Jubilee USA is an outspoken critic of the actions of "vulture funds". Vulture funds are entities that buy up the debt of sovereign countries on the secondary market (often for much less than the value of the original debt) and then sue for full repayment. Jubilee USA filed an amicus brief to the Supreme Court in March 2014 in a debt dispute between Argentina and a group of hedge funds. [16]

The case, Argentina vs. NML Capital, stemmed from Argentina's 2001 debt default. After the default, Argentina offered its creditors approximately 30 cents on the dollar to restructure, with about 92% of the creditors accepting the deal. [17] Those not accepting the deal included hedge funds led by NML Capital, a subsidiary of Elliot Management. Elliot is run by Paul Singer, who has past involvement with sovereign debt litigation, particularly in Peru. NML sued Argentina for full re-payment and was awarded approximately $1.5 billion by U.S. Second District Court Judge Thomas P. Griesa. [18] That ruling was upheld by the Second Circuit Court of Appeals. On May 21, Jubilee USA's Executive Director Eric LeCompte met with Argentinean Pope Francis and Vatican Secretary of State Cardinal Pietro Parolin to discuss the ramifications of the court case on the poor, with all parties "critical of the global financial system". [19] In June 2014, the Supreme Court declined to hear Argentina's appeal. [20]

Jubilee USA has been actively involved in the media discussion of the case in the aftermath of the court's decision. Notable examples include The Washington Post, [21] Time, [22] NPR, [23] Democracy Now, [24] The Wall Street Journal, [25] Inter Press Service, [26] and Bloomberg. [27] The organization also commented on the precedent set by the court decision for other countries facing debt litigation, such as Grenada and the DR Congo. [28] [29]

See also

Related Research Articles

<span class="mw-page-title-main">International Monetary Fund</span> International financial institution

The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 190 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of last resort to national governments, and a leading supporter of exchange-rate stability. Its stated mission is "working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world." Established on December 27, 1945 at the Bretton Woods Conference, primarily according to the ideas of Harry Dexter White and John Maynard Keynes, it started with 29 member countries and the goal of reconstructing the international monetary system after World War II. It now plays a central role in the management of balance of payments difficulties and international financial crises. Through a quota system, countries contribute funds to a pool from which countries can borrow if they experience balance of payments problems. As of 2016, the fund had SDR 477 billion.

In finance, default is failure to meet the legal obligations of a loan, for example when a home buyer fails to make a mortgage payment, or when a corporation or government fails to pay a bond which has reached maturity. A national or sovereign default is the failure or refusal of a government to repay its national debt.

<span class="mw-page-title-main">Holdout problem</span> Economic issue of securities

In finance, a holdout problem occurs when a bond issuer is in default or nears default, and launches an exchange offer in an attempt to restructure debt held by existing bond holders. Such exchange offers typically require the consent of holders of some minimum portion of the total outstanding debt, often in excess of 90%, because, unless the terms of the bond provide otherwise, non-consenting bondholders will retain their legal right to demand repayment of their bonds at par. Bondholders who withhold their consent and retain their right to seek the full repayment of original bonds, may disrupt the restructuring process, creating a situation known as the holdout problem.

The debt of developing countries usually refers to the external debt incurred by governments of developing countries.

<span class="mw-page-title-main">1998–2002 Argentine great depression</span> Economic disaster

The 1998–2002 Argentine great depression was an economic depression in Argentina, which began in the third quarter of 1998 and lasted until the second quarter of 2002. It followed fifteen years of stagnation and a brief period of free-market reforms. The depression, which began after the Russian and Brazilian financial crises, caused widespread unemployment, riots, the fall of the government, a default on the country's foreign debt, the rise of alternative currencies and the end of the peso's fixed exchange rate to the US dollar. The economy shrank by 28 per cent from 1998 to 2002. In terms of income, over 50 per cent of Argentines lived below the official poverty line and 25 per cent were indigent ; seven out of ten Argentine children were poor at the depth of the crisis in 2002.

In international law, odious debt, also known as illegitimate debt, is a legal theory that says that the national debt incurred by a despotic regime should not be enforceable. Such debts are, thus, considered by this doctrine to be personal debts of the government that incurred them and not debts of the state. In some respects, the concept is analogous to the invalidity of contracts signed under coercion. Whether or not it is possible to discharge debts in this manner is a matter of dispute.

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<span class="mw-page-title-main">Vulture fund</span> Fund that invests in distressed assets

A vulture fund is a hedge fund, private-equity fund or distressed debt fund, that invests in debt considered to be very weak or in default, known as distressed securities. Investors in the fund profit by buying debt at a discounted price on a secondary market and then using numerous methods to subsequently sell the debt for a larger amount than the purchasing price. Debtors include companies, countries, and individuals.

<span class="mw-page-title-main">Argentine debt restructuring</span> Process following Argentinas Great Depression

The Argentine debt restructuring is a process of debt restructuring by Argentina that began on January 14, 2005, and allowed it to resume payment on 76% of the US$82 billion in sovereign bonds that defaulted in 2001 at the depth of the worst economic crisis in the nation's history. A second debt restructuring in 2010 brought the percentage of bonds under some form of repayment to 93%, though ongoing disputes with holdouts remained. Bondholders who participated in the restructuring settled for repayments of around 30% of face value and deferred payment terms, and began to be paid punctually; the value of their nearly worthless bonds also began to rise. The remaining 7% of bondholders were later repaid 25% less than they were demanding, after centre-right and US-aligned leader Mauricio Macri came to power in 2015.

Debt Justice is a UK-based campaigning organisation that exists to end unjust developing countries' debt and the poverty and inequality it perpetuates. The organisation’s activities include campaigning, advocacy, community organising and activism and aims to build collective power with people most affected by debt to demand a fair economy for all.

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Paul Elliott Singer is an American hedge fund manager, activist investor, and the founder, president, and co-CEO of Elliott Management. As of March 2024, Forbes estimated his net worth at US$6.1 billion. Fortune described Singer as one of the "smartest and toughest money managers" in the hedge fund industry. A number of sources have branded him a vulture capitalist, largely on account of his role at Elliott Management, which is a vulture fund. The Independent has described him as "a pioneer in the business of buying up sovereign bonds on the cheap, and then going after countries for unpaid debts".

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A sovereign default is the failure or refusal of the government of a sovereign state to pay back its debt in full when due. Cessation of due payments may either be accompanied by that government's formal declaration that it will not pay its debts (repudiation), or it may be unannounced. A credit rating agency will take into account in its gradings capital, interest, extraneous and procedural defaults, and failures to abide by the terms of bonds or other debt instruments.

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References

  1. ↑ "Jubilee USA: Board of Directors". Archived from the original on August 11, 2014.
  2. ↑ "Jubilee USA Network Reviews and Ratings | Washington, DC | Donate, Volunteer, Review | GreatNonprofits". greatnonprofits.org. Retrieved May 19, 2020.
  3. ↑ "Jubilee USA Network". www.macucc.org. Archived from the original on September 28, 2020. Retrieved May 19, 2020.
  4. ↑ "Jubilee USA Network".
  5. ↑ "Jubilee USA - Network Council". Archived from the original on July 18, 2014.
  6. ↑ UN Conference on Trade and Development (January 10, 2012). "Principles on Promoting Responsible Sovereign Lending and Borrowing" (PDF). Archived from the original (PDF) on July 23, 2015. Retrieved August 11, 2014.
  7. 1 2 "H.R. 2634: Jubilee Act for Responsible Lending and Expanded Debt Cancellation of 2008". Introduced June 7, 2007, Reported by Committee June 24, 2008.
  8. ↑ "H.R. 2634: Jubilee Act for Responsible Lending and Expanded Debt Cancellation of 2008, House Vote Result". Introduced June 7, 2007, Reported by Committee June 24, 2008, Voted on April 16, 2008.
  9. ↑ "S. 2166: Jubilee Act for Responsible Lending and Expanded Debt Cancellation of 2008". October 16, 2007.
  10. ↑ "Financial Accountability and Corporate Transparency Coalition Website".
  11. ↑ St. Louis, Melissa; Watkins, Neil (April 4, 2012). "IMF gold sales windfall should go to poor countries in crisis, urge global development advocates". Archived from the original on September 13, 2015. Retrieved August 13, 2014.
  12. ↑ Winters, Michael Sean (June 23, 2014). "Jubilee USA Network aims to ease Grenada's debt crisis". National Catholic Reporter.
  13. ↑ LeCompte, Eric (May 5, 2014). "OP-ED: Caribbean Religious Leaders Inspire IMF Sunday Schools". InterPress Service.
  14. ↑ Van Voris, Bob (June 18, 2014). "Argentina Bondholder NML Capital to Appear in N.Y. Court". Bloomberg.
  15. ↑ Elliot, Larry (July 31, 2014). "Argentina's second debt default could have been avoided". The Guardian.
  16. ↑ Sean-Winters, Michael (March 26, 2014). "Debt and Doubts at the Supreme Court". National Catholic Reporter.
  17. ↑ Hartley, Jon (August 4, 2014). "Argentina's Default: Lessons Learned, What Happens Next". Forbes.
  18. ↑ Hong, Nicole (June 27, 2014). "U.S. Judge Says Argentina Can't Pay Some Bondholders". The Wall Street Journal.
  19. ↑ Melin, Mark (June 10, 2014). "Argentina's Dispute With Hedge Funds Goes To Pope Francis". valuewalk.com.
  20. ↑ Coy, Peter (June 19, 2014). "Argentina's Debt Appeal Dies at U.S. Supreme Court". Businessweek. Archived from the original on June 19, 2014.
  21. ↑ Hamburger, Tom (June 16, 2014). "Argentine Leader Rejects U.S. Supreme Court Rulings in Debt Case". The Washington Post. Retrieved June 16, 2014.
  22. ↑ Edwards, Haley (June 16, 2014). "Supreme Court Boosts Investors, Not Humanitarians". Time .
  23. ↑ Ben-Achour, Sabri (June 16, 2014). "The U.S. Supreme Court Deals Blow to Argentina". Marketplace. NPR.
  24. ↑ Goodman, Amy (June 19, 2014). "Argentina Alleges Extortion After Supreme Court Sides With Vulture Funds Preying on Sovereign Debt". Democracy Now!.
  25. ↑ Romig, Shane (February 18, 2014). "Argentina Files US Supreme Court Bondholder Appeal". The Wall Street Journal.
  26. ↑ Biron, Carey (June 17, 2014). "U.S. Supreme Court "Validates" Vulture Fund Activities". Inter Press Service.
  27. ↑ Coy, Peter (June 16, 2014). "Argentina is Rebuffed by Supreme Court - Now What?". Businessweek. Archived from the original on June 17, 2014.
  28. ↑ Melin, Mark (July 14, 2014). "Argentina Could Default As Negotiations Far Apart". valuewalk.com.
  29. ↑ Myles, Rebecca (August 9, 2014). "Argentina Petitions International Court of Justice Over Debt Default Dispute". latinpost.com.
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