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In the midst of a mental health crisis, these Pittsburgh groups are stepping up


Before the pandemic, society was already experiencing a mental health crisis. Now it’s even worse. An increase in demand, coupled with an insufficient number of providers and high treatment costs, can make it difficult to access services.

Where traditional health systems are lagging behind, community groups intervene. From therapy to Black Pittsburghers and new parents to creating virtual community healing spaces, here’s how three Pittsburgh organizations are filling the need.

Smiling Steel

Last spring, two and a half months after the start of the pandemic and six days after a Minneapolis cop murdered George Floyd, Julius Boatwright posted an offer on his personal Facebook page. If a black man in Pittsburgh needed therapy but couldn’t pay, Steel Smiling would try to help.

“I think a couple like, a few shares, a few people will reach out,” said Boatwright, founder of the nonprofit Black Mental Health. Smiling Steel. “It has definitely become a Pittsburgh virus.”

Julius Boatwright, the founder of Steel Smiling. (Courtesy photo)

The post has been shared over 500 times. Without a prompt, donations began running on Steel Smiling’s GoFundMe page – eventually raising over $ 120,000 for what is now the Black Mental Health Fund. Since then, the organization has received around 300 referrals, Boatwright estimates. Most are from Pittsburgh, although some have come from all over the United States and as far away as the Dominican Republic.

India Renae Hunter, then a graduate student at the University of Pittsburgh, was one of them. After struggling to find a therapist who accepts Medicaid, Hunter contacted Steel Smiling last June. “From there, the process was really easy,” she said. In July, she was put in contact with a therapist through the Black Mental Health Fund. They now talk to each other on the phone once a week. “She was very helpful to me,” Hunter said.

Donations, as well as the support of several foundations *, helped finance the work of Steel Smiling. But there is a challenge: the limited number of black mental health professionals in Pittsburgh. “It’s great that more people are reaching out, but now there aren’t enough black therapists to meet the need,” Boatwright said.

A Julius Boatwright Facebook post offering therapy to Black Pittsburghers in need.

Julius Boatwright’s Facebook post from May 31, 2020 has gone “Pittsburgh viral.”

Wait times for contacting a therapist can vary from one week to three months. So, last month, the organization launched a new program. During the weekly pre-treatment experience sessions, individuals can learn about therapy, attend group support sessions, or do activities like gardening and yoga. The goal is to provide support, free of charge, while people wait for services.

“We know it’s not like you call on Monday and are in therapy on Tuesday,” Boatwright said.

Learn more about The site of Steel Souriant.

Advanced allies

From infertility to postpartum depression, having a baby can be traumatic. Yet, quality reproductive mental health services are often difficult to access. Many providers are untrained in reproductive mental health and may ignore family concerns, said Jodie, a Pittsburgh-based therapist. Hnatkovich. Therapy can be expensive, even with insurance. And many families lack transportation and child care.

A photo of Jodie Hnatkovich, a white woman with shoulder-length blonde hair and glasses.

Jodie Hnatkovich, one of the founders of Forward Allies. (Courtesy photo)

This is why in 2019, Hnatkovich and three of his peers founded Advanced allies for equity in mental and reproductive health, a nonprofit organization that trains providers in reproductive mental health and covers the costs of therapy, transportation, and childcare for families, using donation money and training products. So far, the organization has trained 25 providers and funded therapy for four families. “Caring for families and parents with young children is so vital,” Hnatkovich said. “Mental health care for a family member has an impact on that family cycle for a lifetime. ”

Throughout the eight-month training course for mental health providers, participants are educated on topics such as systemic racism and alliances, LGBTQ parenting, and postpartum family support. The next cohort, which will start in September, will be open to mental health care providers as well as obstetrician-gynecologists, doulas and social workers – “any midwife,” Hnatkovich said.

A room with white walls, a dark gray carpet and five gray armchairs on the floor arranged in a circle facing each other.

Forward Allied downtown area. (Courtesy photo)

Hnatkovich hopes the organization can help eliminate loss and preventable trauma in the childbearing years. “Helping pregnant women to feel… as if they are allowed to speak out and that when they speak they are heard”.

Learn more at Forward Allies website.

Collaborative Visible Hands

“Balanced.” “Recognition.” “Community.”

These are just a few of the words that Visible Hands Collaborative attendees added to a word collage describing their experience of the June 10 meeting. The collaborative, which meets every Thursday evening on Zoom, practices integrative community therapy [ICT], a group therapy method created in Brazil to increase access to mental health in low-income communities.

The collaboration began when Alice Thompson, a medical student, became interested in ICTs during the pandemic. After Thompson participated in a virtual ICT group based in Switzerland, she and her father, Dr Kenneth Thompson, received a grant from the Staunton Farm Foundation to fund the first ICT training in the United States. Thirty-five people, about half of them in Pittsburgh, have been trained to lead their own groups.

A collage of words with words such as "expectations," "appreciation" and "possibilities" in different color fonts.

At the end of the June 10 meeting, participants were asked to submit a word to describe what they took away from the session.

Each 90-minute meeting is structured the same way. The group begins by sharing “celebrations” or good things that are happening in their life. Then, after a brief musical interlude, dancing encouraged, participants can share a problem, or “rock”, that they are facing. The group votes on a rock to focus on during the meeting and spends time in the workshop offering tips, related experiences, quotes and more.

“Much of the power comes from just hearing other people talk about their own experiences with the same type of challenges. Because a lot of times when we feel depressed, lonely, or isolated, we can find ourselves stuck feeling like we’re the only ones feeling that way, ”Thompson said.

The “spirit” of ICT is what sets it apart from other forms of group therapy, said Lem Huntington, mental health case manager and collaboration participant. “ICT evokes a kind of party and fun vibe, rather than a dark one, you know, here’s another day to bemoan our woes,” he said. “He contextualizes people’s problems in a search for solutions.

Unlike traditional mental health care, ICT is community based and does not require health insurance or the ability to pay. “It’s a middle ground where [meetings] are free to access and open to anyone who wishes to join, ”said Thompson. “So there really is no limit. “

Learn more about Visible Hands Collaborative website.

* Foundations supporting Steel Smiling include the Staunton Farm Foundation, the Hillman Family Foundations and the RK Mellon Foundation. PublicSource separately receives support from these foundations.

Juliette Rihl is a journalist for PublicSource. She can be reached at [email protected] or on Twitter at @julietterihl.

This story has been verified by Chris Hippensteel.

Mental health reporting was made possible with funding from the Staunton Farm Foundation, but decisions about news are made independently by PublicSource and not on the basis of donor support.

Experimental, amplified vocals draw audiences live at Café Oto

Concert life in London is slowly reopening to a limited audience, and it was a special pleasure to hear that one of my favorite London venues was once again hosting live musicians. Like its neighbor the Arcola Theater, Cafe Oto (“Sound” or “noise” in Japanese) is, to say the least, raw space. Former warehouse with a bar in one corner and an interesting selection of books, vinyls, and cassettes in another, the performance space has a fabric backdrop and an odd bump in the middle of the floor. On June 30, 2021, there were only about 40 of us in space – socially distant, seated at tables – when in normal times the room can accommodate well over 100 people crammed together. others. Draft beer is served in 2/3 quart glasses, because why not.

For more than 20 years, Café Oto, founded by the Anglo-Japanese couple Hamish Dunbar and Keiko Yamamoto, has been a major venue for experimental contemporary music of all genres. Established names tend to bring their passion projects to Oto: on June 23, 2021, I had the privilege of being in the small audience for the singer and artist of the movement Elaine mitchener spellbinding program, which ranged from Fluxus texts to physical performances. While there is no typical Oto program, diversity has always been their watchword, and the June 30 event featured four women from a wide range of creative backgrounds. The amplified voices were the only common thread.

Amy Cutler – Photo by Jonathan Crabb

Amy Coutelier, geographer, musician and filmmaker affiliated with Goldsmiths College, University of London, recently gave a talk on Nature karaoke which included a Singing Zoom species. It appears that in the UK current Covid regulations allow group singing in football stadiums but not elsewhere, so there was no public participation in the Oto event. Cutler coupled kaleidoscopic projections that sometimes got sharper – a white horse and a woman’s silhouette coming and going – with a continuous, very reverberating soundscape. Sitting at a desk, she added to the sound with vocalizations. The echo effects blurred the meaning and towards the end the volume and bass increased and we heard distorted samples of half-memorized songs. This dreamlike experimental film created memorable sights and sounds; I would love to see more of Cutler’s work.

Canadian composer Cassandre Miller is well known to the London new music audience as a composer, but this was a rare occasion to hear her as a performer. In her introduction, Miller suggested that she was a frustrated performer who recently started incorporating vocals into her writing process. His work is often inspired by recordings, and this improvisation is rooted in a work for violin recorded by a Greek performer from the Albanian border. The themes of exile and isolation in the original were accentuated in Miller’s multitrack vocal performance, as if she was creating harmonics from her own source. She added a harmonica to the range of sounds, more like an enhanced breath than anything else. Her haunting performance – singing an uprooted folk song with herself – resonated strongly with the present times, when many of us have grown a little too accustomed to our own company.

Cassandra Miller - Photo by Jonathan Crabb

Cassandra Miller – Photo by Jonathan Crabb

The final ensemble was a collaboration between the dramatic soprano, composer and singer improviser Alya Al-Sultani and award-winning turntablist and composer Mariam Rezaei, both experienced performers although they have never worked together before. They were more outgoing performers than Cutler or Miller, and their improvisation provided a welcome injection of rhythmic dynamism, contrasting with the continuous flow of the other ensembles. Erotic play, the coupling of human voice and machine, was their apparent theme, entering and exiting recognizable texts (I want you / woman / that’s how it is). Al-Sultani unleashed considerable vocal power and his virtuoso vocalization playfully engaged with the turntables. Rezaei brought rhythmic eccentricity, sudden drops in a lower register, and cartoonish spirit to their 25-minute performance. The explicit emotional intensity, expressed with confidence by the two women, was both uplifting and revealing of the emotional power within Miller’s ensemble and Cutler’s enigmatic dream landscape.

Everyone said how nice it was to hear live music again, to share the space with real people. Café Oto combines a relaxed atmosphere with a DIY aesthetic (staff moved wood panels to block light from windows before Cutler’s set) and a remarkably attentive audience. As with all cultural venues in the UK, times have been extremely difficult recently for the venue, and “Support Café Oto” signs are posted outside. No other venue in London does so much for experimental music, and their audiences have to keep buying tickets, downloads, and 2/3 of a pint of beer.

I CARE IF YOU LISTEN is an editorial independent program of the American Composers Forum, funded by generous donor and institutional support. The opinions expressed are solely those of the author and may not represent the views of ICIYL or ACF.

A gift to ACF helps support the work of ICIYL. To learn more about ACF, visit “At ACF” section or composateursforum.org.

Live music will return from July 19 as UK government announces end of Covid restrictions

LIVE FEEDBACK: The UK live music industry has welcomed the government’s announcement to lift all restrictions related to Covid. From July 19, there will no longer be capacity limits related to Covid for live events, with social distancing measures and mask wearing to be enforced at the discretion of venues and event organizers.

In a statement, the Music Venue Trust (MVT) said the news was “good news for millions of music fans, for artists, teams, venues and local communities who have been deprived of live music and working for so long “.

The MVT said its goal now is to ensure the safe reopening of UK sites, regardless of any Covid restrictions that may be in place, as cases continue to rise in the UK as the Delta variant the most contagious becomes established.

“We have worked alongside the grassroots concert hall industry throughout this crisis to identify methods by which we can achieve this, regardless of government guidelines, limitations or restrictions. The keyword for us and the industry throughout these long, difficult months has been ‘safe’.

But industry bodies such as LIVE (Live music Industry Venues & Entertainment) and the Association of Independent Festivals (AIF) have warned the government, urging the government to support a program to ensure that music festivals and events Live can get insurance coverage in the event of cancellation. .

Insurance remains the main obstacle to planning with confidence and there is no reason not to implement such a regime if the government’s roadmap is truly irreversible.

Paul Reed, CEO of the Association for I

More than half of the UK’s summer festivals have been canceled, and event planners and live music professionals fear more restrictions will further disrupt an industrial sector which contributes $ 4.6 billion dollars to the UK economy and lost 85% of its income in 2020.

LIVE said the commercial insurance industry had “failed” the live music industry on Covid cancellations, and said government intervention was necessary to ensure the security and stability of the industry .

“Government ministers have repeatedly stated that a program will be announced once legal barriers to full performance have been removed,” Greg Parmley, CEO of LIVE said in a statement. “Well, we are now almost at this point and there must be no further delays if we are to reap the rewards from the superb rollout of the vaccine. ”

Paul Reed, CEO of the Association for Independent Festivals, said a government-backed insurance plan was vital. “Insurance remains the main obstacle to planning with confidence and there is no reason not to implement such a program if the government’s roadmap is truly irreversible,” he said, adding that guidelines must be provided by July 12 for procedures for testing, tracing and isolating personnel working at festivals.

You can read the full statement LIVE on the government announcement here.

4 benefits for investing in global infrastructure


ginvestment in global infrastructure and funds such as FlexShares STOXX Global Broad Infrastructure Index Fund (NFRA) offer many benefits that investors may not be aware of.

A recent FlexShares blog post revealed that exposure to infrastructure on a global scale may offer more rewards beyond serving as a utility game. One of those benefits is income, which is difficult to achieve given the current low rate landscape.

“Many investors view infrastructure investments as a source of income, which is particularly beneficial in today’s prolonged low interest rate environment,” said FlexShares. “And like real estate, infrastructure tends to benefit from low interest rates because it translates into lower costs and lower debt financing.”

In addition, the city’s discourse on capital markets has focused on inflationary pressures. With the income component of global infrastructure, investors can stay ahead of inflation as prices rise.

“With rising inflation expectations, investors can benefit from the potential of the infrastructure to serve as a hedge against inflation, ”said FlexShares.

Global infrastructure can also be a bouncing game. Some infrastructure sub-sectors were affected during the pandemic, but these same sectors now represent value games with upside potential.

“At the onset of the pandemic, certain infrastructure sectors, such as air transport, seaports, railways and pipelines, were particularly affected. As global economies reopen, these sectors could be on the back burner. point to benefit the most, ”FlexShares continued.

Sectoral and international diversification

Finally, having a global infrastructure can offer ETF investors the potential for diversification. Not only will a fund like NFRA provide investors with uncorrelated exposure to equity markets and interest rate dynamics, the benefits of moving overseas provide an additional layer of diversification.

“Listed infrastructure stocks provide investors with exposure to both equity markets and interest rates, thus offering the potential for the diversification benefits that come with differentiated returns,” said FlexShares.

Overall, the NFRA seeks investment results that generally match the price and return performance, before fees and expenses, of the STOXX® Global Broad Infrastructure Index. The index reflects the performance of a selection of companies which, on the whole, have broad exposure to publicly traded developed and emerging market infrastructure companies, including US companies, as defined by STOXX Ltd. in accordance with its index methodology.

“Investors have long looked to infrastructure stocks for their potential for diversifying portfolios, generating income and responding to inflation,” another Article on FlexShares mentionned. “But investments in infrastructure also historically have unique risks, including sensitivity to regulatory and political impacts, as well as natural disasters. We believe that the key to managing these risks lies in broadening the scope of an infrastructure investment strategy across geographies, sectors and even revenue types. “

For more news, information and strategy, visit the website Multi-asset channel.

Learn more at ETFtrends.com.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Lindsey Graham criticizes ‘repairs’ for black farmers


title=wpil_keyword_link"debt relief fund in the stimulus bill was “remedies” because it targets underprivileged and black farmers.” title=”South Carolina Senator Lindsey Graham said a debt relief fund in the stimulus bill was “remedies” because it targets underprivileged and black farmers.” loading=”lazy”/>

South Carolina Senator Lindsey Graham said a debt relief fund in the stimulus bill was “remedies” because it targets underprivileged and black farmers.


Senator Lindsey Graham of South Carolina challenged a proposed $ 5 billion debt repayment fund that would benefit historically disenfranchised black farmers as part of the $ 1.9 billion stimulus package against coronaviruses, calling it “repairs.”

Graham, a Republican, criticized what he called the Democratic “wish list” in the stimulus deal in an interview with Fox News on Tuesday.

“Let me give you an example of something that really bothers me. In this bill, if you are a farmer, your loan will be forgiven for up to 120% of your loan … if you are socially disadvantaged, if you are African American, another minority. But if you are [a] white person, if you are a white woman, no forgiveness. It’s repairs. What does this have to do with COVID? ”Graham asked.

The US bailout has allocated $ 10.4 billion to agriculture and about half will go to disadvantaged farmers, the Washington Post reported, citing Farm Bureau estimates. About a quarter of disadvantaged farmers are black and the funds will go to subsidies, debt relief, education, training and other forms of assistance, according to the Post.

Black farmers have lost over 12 million acres of land in the United States over the past century due to “systemic racism, biased government policies, and social and business practices that have denied African Americans fair access. to markets, ”The Washington Post reported.

As part of the stimulus package, payments of up to 120% would go to “socially disadvantaged” farmers, which a House code defines as those who have been “subject to racial or ethnic prejudice because of their identity. as members of a group regardless of their individual qualities.

House Majority Whip James Clyburn, a Democrat from South Carolina, criticized Graham for his comments on Wednesday.

“Lindsey Graham is originally from South Carolina. He knows the history of South Carolina. He knows what the state of South Carolina and this country have done to black farmers in South Carolina. They didn’t do it to the white farmers. We are trying to save people’s lives and livelihoods. He should be ashamed of himself, ”Clyburn said in an interview with CNN. “I think you should go home and maybe go to church.” Get in touch with his Christianity.

The issue of racial inequality extends far beyond agriculture. In 2016, the average net worth of a white family in the United States was $ 171,000, ten times more than the average net worth of a black family, according to the Brookings Institution, which cited centuries of discriminatory policies. against the black community. for the disparity.

Democrats are expected to pass the back-up plan on Wednesday through the reconciliation process, which allows for a “fast-track review” of spending, tax and debt legislation and allows lawmakers to bypass the 60-vote requirement to do so. advance legislation in the Senate.

The bill, which passed the Senate 50-49, will head to President Joe Biden’s office for signature once the House approves changes to its version – putting Congress on track to implement the legislation before millions of Americans lose their unemployment benefits on March 14. .

Related Stories of The Olympian

Summer Lin is a real-time McClatchy reporter. She graduated from Columbia University School of Journalism and was previously a news and policy writer for Bustle News.

Take Five: Rising Bond Yields Could Be The Real Thing


LONDON (Reuters) –

FILE PHOTO: A Wall Street sign in front of the New York Stock Exchange in New York, New York, US October 2, 2020. REUTERS / Carlo Allegri / File Photo


Rising US Treasury yields have so far done little more than drop stock markets to record highs. That will change if “real” – inflation-adjusted – returns take off.

It was the fall in real yields of the last year that sent liquidity into equities; although expensive, they seemed like a steal compared to actual returns of minus 1%.

But big government spending plans and prospects for an economic reopening have pushed real 30-year Treasury yields to eight-month highs, just 11 basis points below 0%. Ten-year real yields are at five-week highs.

There is little consensus on when returns will become an issue for stocks. But some assets are already seeing an impact – gold, for example, struggles to compete with income-producing investments when yields rise and are down 6% this year.

Graphic: it’s getting real –


The Reserve Bank of New Zealand meeting on Wednesday could tell us whether the first country to reduce COVID-19 cases almost completely will also be the first to consider reducing monetary policy support.

Much has changed since the RBNZ’s policy statement in November. The kiwi economy is beating expectations and the markets are no longer taking negative rates into account.

Governor Adrian Orr will revise his growth and inflation forecasts, but he faces a communications challenge: recognizing the improvement without scaring the markets.

A rate hike could be years away, but the prospect of a slower stimulus is on investors’ minds – 10-year sovereign bond yields are up 50bp this year.

Chart: New Zealand economy rebounds –


Debt relief for low-income economies will be high on the agenda of G20 finance officials when they meet on February 26-27.

They will discuss the idea of ​​expanding IMF financing and the initiative to allow the poorest countries a six-month suspension on certain debt payments, as well as more comprehensive relief. There are also calls for the G20 to lead a global COVID-19 vaccination plan.

This will be the first G20 meeting since Joe Biden took over the presidency of the United States, so the tone may be very different from the Trump years which saw many global alliances broken. This could be a positive change at a time when countries struggle to ensure that the economic recovery is sustained.

Chart: Debt / GDP ratios of DSSI countries with sovereign bonds –

4 / TURNING 140

The British pound has become an unexpected currency market poster for the theme of the COVID-19 recovery.

It marked a milestone by hitting $ 1.40, a nearly three-year high. But just two months ago, he was mired in the risks of Brexit and the worst economic outcome of any major industrialized country.

Since mid-December, the pound sterling has strengthened by around 5.5% against the dollar and 6.5% against the euro, as Britain’s vaccination program got off to a flying start. Hopes of an early end to lockdowns lifted it 2% against the dollar in February.

Some consider the pound to be expensive. A Reuters poll predicted the U.S. economy would return to pre-pandemic levels within a year, but saw Britain take twice that time.

There is also the question of whether the Bank of England might consider interest rates negative. Money markets expect this to be the case, but not until the second half of 2022.

Chart: Best performing GBP on the forex market –


Journalists dig through their puns for ways to describe the deluge of Special Purpose Acquisition Companies (PSPCs) that have hit markets over the past year.

SPACs are essentially blank check companies that collect funds during an initial public offering in order to buy a private company and go public.

Already this year, 144 PSPCs have raised $ 45.7 billion, according to data from SPAC Research, often backed by prominent investors and celebrities.

The trend is not without bad press. Investment banks that handle transactions earn commissions for finding a business in PSPC to acquire – within two years. This raises concerns about a lack of due diligence.

Although this is primarily an American phenomenon, PSPCs are also growing in Europe. Former UniCredit CEO Jean-Pierre Mustier and German tycoons Christian Angermayer and Klaus Hommels have announced PSPCs.

SPAC launches are plentiful, but how actual acquisitions – or “deSPACing” – develop will show whether the trend continues.

Graphic: arrow SPAC –

Reporting by Saqib Iqbal Ahmed in New York and Tom Westbrook in Singapore; Karin Strohecker, Saikat Chatterjee and Abhinav Ramranayan in London; compiled by Sujata Rao; edited by Susan Fenton

Catholic agencies urge G20 countries to grant debt relief during pandemic


A multitude of Catholic organizations are renewing their calls for rich countries to cancel their debt and offer financial support to developing countries as they battle massive indebtedness during the Covid-19 pandemic.

By Lisa Zengarini

Catholic social justice organizations have renewed their call for debt cancellation and financial support for poorer countries in light of the current Covid-19 crisis.

In a statement released ahead of the meeting of G-20 finance ministers and central bank governors, which took place in a virtual format on Friday, the Catholic International Network for Development and Solidarity (CIDSE) urged key economies of the world to respond to the crisis with cooperation and solidarity.

They underlined the words of Pope Francis that “the debts that have been incurred cannot be expected to be paid at the cost of unbearable sacrifices”.

Breaking point

CIDSE notes that “in addition to the tragic loss of life, Covid-19 has extended health systems in many poor countries beyond the breaking point, left millions of people without jobs or livelihoods, and decimated savings ”.

According to the Catholic network, the crisis has exacerbated existing inequalities “whereby more powerful countries can use their position and power to ensure access to vaccines and support their own economic recovery”. It also “aggravated the challenges for many countries that were grappling with the impacts of climate change.”

The organizations stressed that “the immediate priority for all countries is to save lives and support livelihoods, and debt cancellation is the fastest way to finance this.” They added that in the long run, “permanent debt restructuring and new financing are needed to rebuild societies and economies that put the needs of the poorest and most vulnerable first, take care of our homes. community and fight against the climate crisis “.

“We must act in global solidarity as one human family, moving from a myopic view of what is politically, financially and technically feasible, to focusing on what is needed to save lives and protect our planet for them. current and future generations, ”they say. .

Looking for a permanent solution

CIDSE therefore urges the G-20 to act immediately, namely “to support a new and significant issue of $ 3 trillion of special drawing rights (SDRs) by the IMF, which will allow all countries to respond to the crisis. of Covid and to support a fair, sustainable recovery “and” to extend the debt moratorium through the DSSI (Debt Service Suspension Initiative) for longer (at least 4 years) and to more countries, including climate-vulnerable countries that were already struggling to respond to the additional pressures of climate change. “

The Catholic network is also asking that private creditors – who currently continue to take debt payments from countries struggling to meet the needs of their citizens – be “forced to participate in all restructuring and debt relief.”

Finally, CIDSE calls for “a permanent debt settlement mechanism to ensure swift, comprehensive and equitable debt restructuring to all countries with high and unsustainable debt burdens, without conditionality.”

Janet Yellen’s New Financial Multilateralism by Paola Subacchi


In a recent letter to her G20 colleagues, U.S. Treasury Secretary Janet Yellen called for stronger multilateralism to respond to the COVID-19 crisis. By emphasizing governance, flexibility and accessibility, Yellen offers reason to hope for broader action to close the many gaping holes in the current global financial system.

LONDON – The International Monetary Fund and the World Bank have intervened in ways that would have been inconceivable barely a year ago. Under former President Donald Trump, the United States – the major shareholder, with veto rights, in both institutions – has done little (beyond causing occasional disruption) to shape their policies. Now, the United States is taking the lead in coordinating its role and helping poor countries respond to the COVID-19 crisis.

Spearheading this approach is US Treasury Secretary Janet Yellen. In a letter to his G20 colleagues last month, Yellen wrote that no country can “declare victory” over the “twin health and economic crisis” caused by the pandemic. “This,” she added, “is a time for action and for multilateralism.”

Yellen’s letter may not mark the start of a new “Bretton Woods moment,” as IMF Managing Director Kristalina Georgieva advocates. But it marks a welcome departure from Trump’s recklessness and neglect. And he is seeking real action that the Trump administration had opposed: strengthening the tools of the IMF and the World Bank, including the Fund’s concessional facilities, and a new allocation of its reserve asset, the rights of special drawings (SDRs), to increase liquidity for low-income countries.

These countries certainly need help, not least because the COVID-19 crisis has dramatically increased many of their indebtedness. To be sure, the G20 has already devised a two-pronged approach to helping heavily indebted countries. First, it provides temporary debt relief – until June, although it can be extended – through the Debt Service Suspension Initiative. Second, it plans to improve debt sustainability through the Common Debt Treatment Framework.

But this support needs to be broadened. Fortunately, now that the United States has abandoned its opposition to a new SDR allocation, the G20 has agreed to allow the IMF to work on it.

The value of the SDR is based on a basket of currencies (the US dollar, the euro, the Japanese yen, the Chinese renminbi, and the pound sterling). Although SDRs do not function as a currency, they can be exchanged for freely usable currencies.

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The SDR was not designed to help low-income countries. Instead, it was intended to supplement official reserves of IMF member countries and solve liquidity problems, at a time when the US dollar was directly convertible into gold.

Taking this into account, the share of SDRs that each country receives in a given allocation is determined by its IMF quotas. Under this system, the G20 countries would receive 68% of an SDR allocation, with the United States, the United Kingdom and the largest economies in the European Union claiming 48%. Meanwhile, poor countries would receive only 3.2% of the same allocation.

In other words, SDRs tend to come back to those who need them the least. And low-income countries are more likely to convert the SDRs they receive into freely usable currencies.

Recognizing this, Yellen signaled his willingness to consider potential solutions. For example, G20 countries could channel SDRs they don’t need to support economic recovery in low-income countries. This could pave the way for the creation of funds based on SDRs.

Yet even under the existing allocation system, an SDR allocation equivalent to 100% of current IMF quotas – as advocated by Italy, which currently heads the G20 – would generate around SDR 15.2 billion for the IMF. poorest countries. This is more than the average annual IMF concessional lending through the Poverty Reduction and Growth Trust (SDR 1.25 billion).

In addition, SDRs are not subject to any conditions. So, in advocating their use, Yellen effectively recognized that flexible and unconditional liquidity – not concessional loans – is the ultimate safety net. At the same time, it insists on good governance and the need to establish shared parameters, thus enhancing transparency and accountability in the trading of SDRs.

This brings us to the elephant in the room: How will countries use their SDRs? Should they be allowed to use them, for example, to service bilateral debt? In that case, that multilateral money could end up benefiting bilateral creditors like China – an outcome that Yellen’s predecessor, Steven Mnuchin, warned against.

Answering these questions will require a broader effort to fill the many gaping holes in the current multilateral financial system – holes that have often left financially needy countries with few good options. As a result, low-income countries have often had to turn to expensive bilateral loans and become hostage to private creditors and mixed entities, such as China’s state-owned banks. This has created significant asymmetries between different types of debt and different types of creditors.

To deal with these problems, multilateral financial tools must be made available to countries in need. In addition, the G20 must take stronger action to strengthen debt sustainability, coordinate international action, and negotiate fair debt deals between bilateral creditors, especially China, and low-income debtors.

The good news is that Yellen – with its emphasis on governance, flexibility and availability – seems to recognize the shortcomings of the international financial architecture. It is hoped that it will continue to lead the way towards a new financial multilateralism that addresses them.

What are your options now?


Last month, the US House of Representatives passed the HEROES Act, a $ 3 trillion stimulus bill that would include additional relief for those with student loan debt. But it is unlikely to be passed by the Senate in its current form. Several Senate Republicans have publicly stated that they will not support the legislation, including Senate Majority Leader Mitch McConnell (R-Ky).

So what could to be included in the next stimulus bill for student borrowers? And what other options do struggling borrowers have?

Student Loan Debt Relief in the HEROES Act

The HEROES Act that was passed by the House contained several provisions that would provide relief for borrowers from student loans, including student loan forgiveness (although an amendment restricted who could qualify for a loan forgiveness).

The provisions included:

  • $ 10,000 in federal student loan forgiveness for borrowers who are in default, in arrears, or whose loans are deferred due to economic hardship
  • $ 10,000 in private student loan forgiveness for “economically troubled” borrowers
  • An extension of the suspension of payments and interest on federal student loans held by the government until September 2021

But – and this is a big but – there seems little chance that all of this will be included in a further stimulus bill passed by the Senate. Senator McConnell said lawmakers would likely decide by the end of June whether to pass a “fourth and final” stimulus bill in response to the coronavirus pandemic and job losses and the resulting financial instability as a result of the closure of thousands of businesses. But that it will be “tightly designed”. He mentioned the help given to those who are still unemployed, and that there could be additional help for small businesses and for health workers. But it’s unclear to what extent student debt relief could achieve this.

That said, it is still possible to take advantage of the student loan debt relief included in the CARES law, which was enacted in late March. And there are other options for student loan borrowers who are struggling to make their payments.

Student Loan Debt Relief in the CARES Act

If you have a federal student loan, you are probably eligible for relief under the CARES Act. The provisions of the bill generally only apply to direct loans and federal family education loans (FFEL loans) held by the US Department of Education. Neither Perkins loans nor private student loans are covered by the bill. Still, the National Consumer Law Center’s Student Loan Assistance Project estimates that about 9 million federal student loan borrowers have at least one loan covered by the bill.

Student loan borrowers who have qualifying loans enjoy a few benefits under the law:

  1. If you are an eligible federal student loan borrower, you have been automatically placed on forbearance, allowing you to temporarily stop making monthly loan payments (without harming your credit). The suspension of payments began in mid-March and will last until September 30, 2020.
  2. If you qualify but choose to continue making payments, you will be charged 0% interest until the end of September. If you can afford to make payments, this is a great opportunity to pay off your principal and save money overall. “Not only will you stay on track for repayment, but you’ll also pay off your loans faster because interest doesn’t accrue,” says Tim Stobierski, founder of StudentDebtWarriors.com, a resource center for student borrowers.
  3. If your federal student loans are in arrears, the Department of Education will not make collection calls or send letters until September 30. Most importantly, each month during the suspension of collection (until the end of September) will count as one month in which the on-time rehabilitation payment has been made, even if you do not make any payments.
  4. If you have benefited from an income-based repayment plan, the suspended payments are considered eligible payments. And if you are working on the forgiveness of public service loans, you should also have the suspension time factored into your 10 years of qualifying payments.

Other Student Loan Debt Relief Options

If you need extra help or don’t qualify for CARES Student Loan Relief, there are other options. These include:

An income-based repayment plan

If you have federal student loans, you can benefit from a long-term, income-based repayment plan regardless of the CARES provisions. If your income has been negatively affected by the coronavirus pandemic and the ensuing economic recession, contact your student loan manager to recertify your income. This can drastically reduce your federal student loan payments.

Under available income-based repayment plans, any remaining loan balances are forfeited if your federal student loans are not fully repaid by the end of the repayment period, which is 20 or 25 years, depending on the plan. . If you make payments through an income-based repayment plan and are also working on a loan forgiveness under the Public Service Loan forgiveness program (PSLF), you can get a discount on any balance of loan after only 10 years of qualifying payments.

Suspend private student loan payments

Private student loans were not included in the provisions of the CARES Act, but some states have since worked with private lenders to provide student debt relief to borrowers. By early June, California, Colorado, Connecticut, Illinois, Massachusetts, New Jersey, Vermont, Virginia, Washington, New York, and the District of Columbia all had deals with lenders to help borrowers. with private university loans and commercially held FFELP loans. The agreement calls on lenders and loan managers to:

  • Offer borrowers the right to suspend forbearance payments for 90 days. You will likely need to call your loan officer to request a forbearance. Make sure to ask that your interest is not accrued during this period, so that you don’t have to pay more after the period ends.
  • Waive late payment fees. While your loan is in arrears, you shouldn’t have to worry about paying late fees on missed payments.
  • Do not issue any negative account reports to the credit bureaus. During forbearance, the agreement states that loan managers must report your account in good standing to the credit bureaus. It’s still a good idea to check. Fortunately, the three major credit bureaus — Equifax

    , Experian and TransUnion

    – now offer free online weekly credit reports.
  • Stay debt collection proceedings for 90 days. This applies to any new trial.

Explore flexible student loan repayment options

If your student loans are private or not eligible for relief under the CARES Act, you can still negotiate lower payments or even a break in payments.

If you lost your job or saw your income decline during this pandemic, call your private student loan department to see what flexible student loan repayment options are available. Even if you don’t live in one of the states that have agreements with private lenders and loan services, you can still temporarily suspend your private student loan payments without incurring late fees or negative consequences on your loan. your credit report.

Student loan refinancing

By refinancing your student loans, you could reduce the interest rate you pay and save hundreds (if not thousands) on your student debt over time. Interest rates are particularly low right now with variable rates as low as 1.99%, as of June 6, 2020, according to Student Loan Hero, which is part of LendingTree.

. To benefit from the best rates, you will generally need a FICO credit score of at least 600.

If you are refinancing private loans, this can be a great opportunity to reduce your monthly payments and the total amount you are paying over time. You can also consolidate loans into one payment. If you are considering refinancing federal loans from a private lender, keep in mind that your loans will no longer have access to federal programs and protections, including the CARES Act loan relief and forgiveness programs. . It is therefore important to weigh the pros and cons.

Related Articles:

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Do this with student loans if the Senate rejects the HEROES law

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Environmental justice activists rally in Washington for moratorium on utility shutdowns


WASHINGTON – A year after COVID-19 was declared a national emergency, the DC-based national coalition #NoShutOffs and We Power DC will rally outside the US Department of Health and Human Services on Saturday to call on President Joe Biden and HHS Acting Secretary Nathan Cochran to issue a national moratorium on shutting down public services. The socially distanced action will also prompt local authorities to extend DC’s soon-to-expire moratorium on Pepco disconnects.

What: Rally to urge federal and DC officials to stop utility cuts

When: Saturday March 13 from 11 a.m. to 12 p.m.

Or: 330 C St. SW Washington, DC, at the intersection of 4th St SW, outside the US Department of Health and Human Services

Which: Individuals representing the #NoShutOffs Coalition and We Power DC

Why: The COVID-19 federal national health emergency was declared a year ago. Yet no federal relief has been given to stem the public health crisis of power, water and broadband outages, leading millions of households to suffer or at risk of utility outages due to mass unemployment. Public service cuts pose a national threat to public health.

A recent study from Duke University estimated that a national moratorium on public services could have prevented 8.7% of COVID-19 cases and 14.8% of deaths.

Only nine states and DC have moratoria in place. With DC moratoria set to expire soon and no national shutdown protection in place, advocates urge President Biden to use his executive branch to issue a nationwide moratorium on shutting down public services and alleviating utility debt to public services. families.

Biden approaches political victory with House on the cusp of stimulus vote

Biden approaches political victory with House on the cusp of stimulus vote

House set to send $ 1.9 trillion Covid-19 relief plan to President Joe biden for his signing, providing an economic boost that will last long after the $ 1,400 stimulus checks start rolling into Americans’ accounts this month.

With four days until extra unemployment benefits start to run out, Democratic House leaders are planning a stint on Wednesday. While a Republican MP has delayed the schedule, the final vote is still expected in the afternoon.

The bill is far more important than Wall Street’s initial expectations of what could be accomplished in a tightly divided Congress. It provides a model for a potential longer-term expansion of an American social safety net that has long been much smaller than its European counterparts. Democrats say the nearly $ 110 billion temporary extension of the child tax credit will help cut child poverty in half, while the unemployment benefit tax exemption and unemployment benefit relief student debt will help millions more.

WATCH: An explanation of who qualifies for a $ 1,400 stimulus check and how this round of payments will work.

Source: Quick Take)

Economists this week increased their growth projections to incorporate the impact. Morgan Stanley on Tuesday raised its forecast for economic growth in the United States for 2021 to 7.3% from 6.5%, a pace unmatched since the Korean War boom in 1951. The OECD on the same day over double his own estimate.

Rebound in hiring plans

“It seems like every week we get another reason to increase the forecast,” said Avery shenfeld, Chief Economist at the Canadian Imperial Bank of Commerce. “The vaccinations will free up a lot of saved expenses, on top of all the expenses we’re getting from this round of stimulus checks.”

White House press secretary Jen psaki said on Tuesday that the government would not have the checks – amounting to $ 1,400 for each individual, gradually dropping to zero for those earning $ 80,000 or more – printed with Biden’s name, as the Treasury seeks to speed up their distribution.

The IRS is ready to start sending payments within days of signing the invoice, according to a person familiar with the process who is not authorized to comment on the schedule because it is not yet finalized.

The non-partisan Congressional Budget Office estimated that $ 1.1 trillion in relief bill spending would be spent this year, and an additional $ 459 billion in 2022.

Sustained boost

This sustained flow of spending is reflected in the growth forecasts. The median of the estimates compiled by Bloomberg for 2022 is 3.8% – an expansion well above the average of 2.3% over the decade to 2019.

Shenfeld is among economists seeing a return to full employment in the United States next year, with an unemployment rate of 3.8%, although the median projection is 4.6%, above levels of before the pandemic.

“This legislation represents the boldest action taken on behalf of the American people since the Great Depression,” said the vice chairman of the House Democratic Caucus. Pete Aguilar from California.

The Senate passed the bill – which includes $ 160 billion for vaccine and testing programs, $ 170 billion to help schools open and more than $ 360 billion in aid to state governments , local and territorial – Saturday in a 50-49 vote. . The House is also expected to pass it without the support of Republicans.

Republican objections

GOP lawmakers have also skyrocketed the price beyond what is needed, given the economy is already rebounding as the coronavirus recedes amid the heightened vaccination campaign. Along with the surge in Treasury yields over the past month, they also point to heightened fears of a surge in inflation, with dangerous results given the heavy indebtedness of the United States.

“You can’t keep adding mountains of debt to hundreds of billions at a time” without consequence, said House Republican Whip Steve scalise of Louisiana, the lawmaker responsible for collecting the GOP votes. He blasted what he called House Speaker Nancy Pelosithe pursuit of a “socialist” agenda and the rejection of talks with “those of us who want to work together to deal with this virus and safely reopen our economy and our schools”.

Republicans have particularly opposed the more than $ 350 billion in state and local government funds provided as many states show no loss of revenue during the pandemic.

“Headline after headline confirms most states are not in financial trouble,” minority House leader said Kevin mccarthy said during Wednesday’s debate. “It just throws money away with no liability.”

A group of 11 Republican senators have proposed a $ 650 billion stimulus bill, with more targeted benefits and a focus on anti-virus efforts. Biden greeted most of the group at the Oval Office to say that the gap between his vision and the GOP was just too big to try to bridge.

The Progressive Perspective

In contrast, the Progressive Democrats had asked for even more than Biden had offered. Pramila Jayapal, who heads their caucus, asked 3 trillion dollars. The Liberals, however, pledged to back the Senate version of the Aid Bill in Wednesday’s vote.

Pelosi said on Tuesday that the relief bill was the most important she has led since Obamacare in 2010. She also predicted that there would be no political backlash from this episode – when Republicans took successfully argued against deficit spending and took control of the House. in the midterm elections.

“The public knows” what is planned in the relief bill, she said. “The public did not know about the Affordable Care Act and the administration did not exactly advertise it.”

Aid is targeted to the lowest paid Americans. A study by the Tax Policy Center found that the incomes of the bottom fifth of earners would increase by 20%, the highest among income groups. This will help accelerate the flow of money into the economy, as those in the lower brackets spend more of their budget on basic household needs, including health care, food. and clothing.

“It will likely hit the accounts before the end of the month,” said Aneta Markowska, Chief Economist at Jefferies LLC. “Not only is this paid for quickly, it is actually spent very quickly. “

(Updates with McCarthy’s comment in the fourth paragraph after the caption “Republicans Object”.)

–With the help of Laura Davison and Carl Riccadonna (economist).

To contact journalists on this story:
Erik Wasson in Washington at [email protected];
Katia Dmitrieva in Washington at [email protected]

To contact the editors responsible for this story:
Joe sobczyk to [email protected];
Scott Lanman to [email protected]

Christopher Anstey, Kathleen Hunter

© 2021 Bloomberg LP All rights reserved. Used with permission.

US stimulus saga: what could end up in the new COVID-19 relief bill? | Business and Economy News


This is the current long-running US political soap opera: When will the next round of US coronavirus aid be approved, and what will the bill actually contain?

Congressional Democrats – and the administration of US President Donald Trump – have been battling over the topic for months, as millions of struggling American families and small businesses anxiously await much-needed financial help.

Many provisions of April’s $ 2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) law expired at the end of July, and others that protect tenants, student loan borrowers and the unemployed will expire end December.

So what’s the delay in approving more help? Here are the latest news from the ongoing relaunch saga.

Psst, what do we mean by stimulus?

The coronavirus pandemic has closed businesses, disrupted travel and put millions of people out of work, devastating economies around the world, including the United States.

Until there is widespread immunity to the virus, it will not be business as usual for many industries. This is where the government comes in. Lawmakers in the US Congress can boost the economy with money in the form of financial lifelines for small businesses, direct cash payments to households, improved unemployment benefits, debt relief and more measures to help people overcome the pandemic.

Simply put: Throw money on the problem until things get better.

Money rings good. So what’s the big debate?

Republicans and Democrats disagree on what stimulus the US economy needs, what form it should take, and how it should be distributed.

Generally speaking, Democrats want a bigger bill that provides additional federal unemployment benefits to workers – but it would cost $ 2.2 trillion.

Republicans want a clean version. The latest proposal from Trump’s Treasury Secretary Steven Mnuchin would cost $ 916 billion.

Both proposals mean spending more when the US government already has a budget deficit of $ 3.3 trillion and the pandemic is not yet over.

Democratic leaders Senator Chuck Schumer and House Speaker Nancy Pelosi call for more stimulus for struggling American families and businesses [File: Hannah McKay/Reuters]

Billions, billions – what would these bills actually do?

Democrats want to extend state unemployment benefits and restart the federal weekly supplement of $ 300 for the unemployed, which expired in late July. They also want to relieve cash-strapped state and local governments and send another round of $ 1,200 stimulus checks to individuals.

What about Trump’s proposal?

Trump’s plan would give individuals stimulus checks of $ 600 – half of what they received in April – but would not include the federal top-up of $ 300 on state unemployment benefits.

It offers no help to state and local governments, which have seen their coffers depleted by the crisis. It would also protect businesses, universities and schools from virus-related lawsuits.

Treasury Secretary Steven Mnuchin offered a lean $ 916 billion bill to House Democrats [File: Greg Nash/Pool via Reuters]

Does anyone have any other ideas?

A third group, made up of senators from both parties, is proposing a solution of $ 908 billion. Led by Democratic Senator Joe Manchin of West Virginia and GOP Senators Susan Collins of Maine and Lisa Murkowski of Alaska, this group’s proposal includes pandemic unemployment benefit of $ 300 per week and $ 160 billion for states and local governments, but does not send a check to every American.

When do they all have to come to an agreement?

Strictly speaking, this should have been fixed months ago. Or weeks ago. Or right away.

But seriously, time is running out. On December 9, the House is expected to pass a week-long fundraising bill to give lawmakers more time to reach a deal. Without this measure, the US federal government would enter a shutdown less than two weeks before Christmas.

A government shutdown during a pandemic? This does not sound good.

This is not the case. So Washington had better get down to business – and quickly.

So who owns the decision?

This is the problem – everyone’s problem. The House of Representatives – where Democrats are in the majority – passes the stimulus bill first.

The bill then passes through the Senate, where Republicans currently hold control. And then it will have to be signed by outgoing President Trump, who has less than two months in office.

For his part, Democratic President-elect Joe Biden has made it clear that he wants as much emergency aid as possible – but many struggling businesses and families cannot wait for help until he does take it. his duties on January 20.

It is estimated that 30 to 40 million people could lose their homes if nothing is done before a federal moratorium on evictions expires on December 31 [File: Leah Millis/Reuters]

What’s at stake?

In the balance, more than 10 million Americans are unemployed and the 30 to 40 million who could be evicted when a moratorium expires at the end of the year, according to the National Low Income Housing Coalition.

Families have struggled to put food on the table since the start of the pandemic. Feeding America, the country’s largest anti-hunger organization, said its network of national food banks had distributed about 4.2 billion meals since March 1.

So, while politicians are fighting, ordinary people are stuck in limbo. The United States is already seeing an upsurge in COVID-19 infections, and experts warn mass deportations could help spread the coronavirus. If that weren’t enough, a post-vacation default on credit card debt could cause the financial markets to spiral.

If it’s so serious, why can’t politicians be nice?

That’s a great question – and maybe one for Santa Claus.

How to rethink global debt in the coronavirus pandemic?

  • The coronavirus pandemic has sent economic shockwaves around the world.
  • To ensure that developing and emerging countries do not suffer, economists Carmen Reinhart and Kenneth Rogoff argue that their debt payments should be suspended throughout the crisis.
  • Instead of going to creditors, financial resources should be focused on tackling COVID-19.

As the COVID-19 virus spreads globally, economic paralysis and unemployment follow in its wake. But the economic fallout from the pandemic in most emerging and developing economies will likely be far worse than anything we’ve seen in China, Europe or the United States. Now is not the time to expect them to pay off their debts, whether to private or official creditors.

With inadequate health systems, a limited capacity to provide fiscal or monetary stimulus, and underdeveloped (or nonexistent) social safety nets, the emerging and developing world is on the brink of not only a humanitarian crisis, but also the most serious financial crisis. crisis since at least the 1930s. Capital has been forced out of most of these economies in recent weeks, and a wave of new sovereign defaults seems inevitable.

We have consistently argued for the urgent need for a temporary moratorium on all debt repayments by all emerging and developing sovereign debtors, except the most solvent. The arguments for a moratorium for troubled sovereign borrowers have many similarities to those for households, small businesses and municipalities.

The urgency is underscored by the fact that the quarantine experience is radically different in the developing world. In the sprawling slums of São Paulo, Mumbai or Manila, quarantine can mean living in a small room with ten people, with little food or water and little or no compensation for lost wages. If history is any guide, the supply disruptions that accompany the pandemic could soon be followed by food shortages.

More than 90 countries have already requested emergency funding from the International Monetary Fund’s Rapid Finance Instrument (IFR) and World Bank resources. And in much of the developing world, the worst of the pandemic is not expected until the end of the year.

When this happens, the direct humanitarian and economic impact will be added to the effects of the pandemic on global trade and commodity prices, which are already plaguing many emerging economies. The World Trade Organization expects world trade to decline by 13-32% in 2020. Oil-producing countries (and many other commodity producers) have suffered the consequences of the price war between oil and gas. ‘Saudi Arabia and Russia, causing downgrades in sovereign credit ratings. .

The World Trade Organization expects world trade to decline by 13-32% in 2020.

Image: World Trade Organization

Leaders of the world’s largest economies must recognize that a return to “normalcy” in our globalized world is not possible as long as the pandemic continues on its dark path. It is myopic for creditors, official and private, to wait for debt repayments from countries where these resources should be diverted from the fight against COVID-19.

Deepening and prolonging the global depression is a very risky proposition. At a low in the mid-1980s, emerging and developing economies accounted for around 18% of global GDP (in US dollars); in 2020, this share is 41% (and 60% if adjusted for purchasing power).

We recommend an immediate temporary moratorium on external debt repayments for all “AAA” rated sovereigns. By “external” we mean debt issued under the jurisdiction of foreign courts, generally in New York or London. Debts issued under domestic law would be handled by the countries themselves. For this type of debt relief to be effective, it must encompass, including debts to multilateral lenders, such as the International Monetary Fund and the World Bank, sovereign creditors (Paris Club members and China) and private investors.

Ultimately, the debt of many countries will have to be restructured; there will be no alternative to a negotiated partial default. But courts and multilateral lenders are no better at handling default en masse that hospitals cannot withstand operating at ten times their capacity. A temporary moratorium can provide the necessary bridge. At best, it might even prevent some faults.

The World Bank and the IMF have extensive experience in over-indebted countries and in recent years have increasingly recognized that partial default is often the only realistic option, a point we have emphasized in much of our work. previous work on external debt. It is a great tragedy that following the global financial crisis of 2008, the euro area failed to restructure the debts of southern Europe beyond the Greek case – a course of action that we planes strongly advocated at the time. Trying to impose regular debt payments at very irregular times can only lead to deeper and longer-than-necessary recessions.

Of course, a debt moratorium will require the United States, which has an effective veto at the IMF, to commit. But the same is true for China.

Over the past two decades, more and more developing countries have turned to China for loans (which are usually guaranteed and carry market interest rates). Although China is now a major creditor in some 40 countries and a major in dozens more, it has so far refused to join the Paris Club (which coordinates sovereign debt rescheduling) and insists on pursuing its own bilateral approach behind closed doors.

What can be done? The IMF and the World Bank have the capacity and expertise to coordinate a debt moratorium if the United States and other major players conclude that such a move is in their national interest. Private creditors will have relatively little choice but to cooperate in the short term. Many emerging and developing economies will soon stop paying their debts anyway. The world must face the problem.

Mr Wolfensohn made Herculean efforts to alleviate the debt of heavily indebted countries like Guyana


Mr. Editor,

I am writing to pay tribute to Mr. James Wolfensohn, former President of the World Bank who died at the end of November 2020.

As we in Guyana mourn the loss of many of our compatriots, men and women, who have passed away due to the COVID-19 pandemic and pray that their souls rest in peace, those of us who are always there and know the contribution of men. like Mr. Wolfensohn in Guyana’s fight for debt relief and poverty reduction, must pay tribute to him and praise his Herculean efforts in favor of debt relief for heavily indebted countries like Guyana.

Guyana’s fight for debt relief at that time was led by Dr Cheddi Jagan before and after assuming the presidency of the Republic.

In addition, the struggle for debt relief has dominated President Jagan’s cabinet meetings and his foreign affairs agenda.

As Minister of Foreign Affairs at the time, I had the good fortune to accompany the President to many meetings.

In doing so, I got to know Mr. Wolfensohn, President of the World Bank and Mr. Michel Camdessus, Managing Director of the IMF, both of whom addressed the heads of government of CARICOM on different occasions.

President Jagan met Mr. Camdessus at the Fifth Intersessional Meeting of Heads of Government in March 1994, in Saint Vincent and the Grenadines.

Two years later, between February and March 1996, President Jagan hosted Mr. Wolfensohn who visited Guyana to participate in the seventh intersessional meeting of the Conference of Heads of Government of Caricom held in Georgetown. .

On the eve of Wolfensohn’s visit to Guyana, President Jagan wrote him a letter on February 12, 1996 congratulating him on his appointment as President of the World Bank.

In his letter, President Jagan said: “In Guyana, we are grateful for the assistance we have received from the World Bank and in particular from the International Development Association (IDA). However, our enormous debt overhang hinders our ability to grow faster than we do and to alleviate or even eradicate poverty.

President Jagan went on to emphasize; “Our foreign debt payments of about $ 112 million in 1995 were more than all capital inflows. We are caught in a vicious circle.

The President told Wolfensohn that “the World Bank has a crucial role to play, under your able leadership, in eradicating poverty, safeguarding the environment and achieving human development.

I look forward to your meeting with the Heads of Government of Caricom and your solidarity and support for the poor, marginalized, oppressed and oppressed of the world. ‘

During Wolfensohn’s meeting with Caricom Heads in Georgetown, his attention was drawn to; “The persistent serious debt service problem facing some member states and the growing proportion of debt owed to multilateral financial institutions (MFIs), which do not reschedule payments.” Caricom Heads called on the President of the World Bank to ensure that the Bank “deals with heavily indebted countries in a manner designed to help solve the problem of diversification.”

It was Wolfensohn of the World Bank and Camdessus of the IMF who, four years after taking office of the PPP, “launched the Heavily Indebted Poor Countries (HIPC) Initiative. At the time, this initiative enabled debt relief for the world’s poorest countries to amount to more than US $ 53 billion.

Guyana was one of a group of 39 developing countries with high levels of poverty and debt overhang that were classified as HIPCs allowing them to benefit from special assistance from the IMF and the World Bank.

Due to its classification as a HIPC, Guyana became eligible for debt relief in the form of low interest loans, cancellation or reduction of multilateral debt which, at the time, was difficult. to obtain. Later in 2004, according to “IMF Country Report No. 04/123 on the Enhanced HIPC Completion Point Initiative of May 5, 2004”:

“The IMF and IDA staff consider Guyana’s performance with respect to the conditions for reaching the completion point under the enhanced Heavily Indebted Poor Country Program as satisfactory.

Twenty-four years have passed since Wolfensohn visited Guyana to meet with President Jagan and his Caricom colleagues, but poverty persists in many Caricom member states and foreign debt still hangs like a sword of Damocles over it. the countries of the region.

But Wolfensohn’s efforts were not in vain. Debt relief by MFIs through the HIPC Initiative has achieved its objective by easing the debt burden of many countries, including Guyana, allowing the use of resources that were once used to service external debt. to be used for public sector investment projects in particular, in the social sector thus allowing a more robust growth rate.

It is in this context that Guyanese must pay tribute to James Wolfensohn, a champion of the poor, marginalized and dispossessed in many developing countries of the world.

Yours faithfully,

Clement J. Rohee

Global public debt and budget deficits to hit record high in FY21: IMF


A senior IMF official warned on Friday that global public debt is expected to exceed 100% of GDP in 2020-2021, and that the average overall budget deficit is expected to reach 14% of GDP in 2020, stressing that public debt and deficits are never ‘grew so high and so fast.

The sharp contraction in production and the resulting drop in income, along with strong discretionary support, led to increased public debt and deficits, Vitor Gaspar, director of the Fund’s fiscal affairs department, told PTI. international monetary policy (IMF).

Global public debt is expected to hit a record high, exceeding 100 percent of GDP in 2020-2021, an increase of nearly 20 percentage points from a year ago, he said, adding that the Debt increase is greatest among advanced economies such as the United States, Japan and those in Europe.

At the same time, the average overall budget deficit is expected to reach 14% of GDP in 2020, 10 percentage points higher than last year. Never have public debt and deficits increased so high and so quickly, he said.

Along with these record levels of global public debt, however, are record levels of nominal interest rates, in both advanced and emerging market economies, Gasper noted.

And they should stay low in the absence of inflationary pressures. In many cases, this opens up considerable room for maneuver, at a time when budget support is needed. In many advanced economies, high debt levels have been accompanied by lower debt servicing costs, he said.

Nonetheless, caution is in order, said Gasper, observing that many advanced economies face long-term fiscal pressures, especially due to population aging, which can weigh on long-term debt sustainability.

Some emerging market economies could face costly debt refinancing if financial conditions tighten again, as they did in March, the IMF official warned.

And the most vulnerable low-income developing economies, many of which were already at high risk of debt distress before the crisis, will need sustained support from the international community to ensure they can respond to the pandemic. and contain rising poverty. and inequality, he said.

Providing debt relief under the G20 Debt Service Suspension Initiative is a good example of successful global coordination, he said.

Responding to a question, Gasper said that in China, the recovery is now well advanced, as national containment measures have been withdrawn and political support has strengthened.

In response to the initial outbreak, the authorities provided timely and targeted budget support to the health sector and the most affected businesses and households, which mitigated the impact of the outbreak on employment, contributing to avoid unnecessary bankruptcies and helped protect the vulnerable, he said.

Overall budget support is expected to amount to around 5.8 percentage points of GDP.

Of course, if the recovery fails, China will have to do more, and it has the fiscal leeway to do so, he said.

Budget support would be more effective if it improves the public health system, strengthens the social safety net, focuses on public investment spending in areas to combat climate change, such as green technologies and transport clean.

As in many other countries, China’s public debt increased during the crisis and policymakers will need to adjust medium-term fiscal policy once the crisis is behind us, he said.

In the United States, Gasper said American policymakers have rightly taken bold steps to protect livelihoods and businesses and minimize the economic damage from the pandemic.

Over the next few months, the United States is expected to use its considerable fiscal space to accelerate economic recovery, improve health preparedness, support the most vulnerable, and facilitate a broader overhaul of the post-pandemic US economy.

It will be important to ensure that the political solutions put in place are simultaneously oriented towards the overhaul of the existing systems of social assistance, education and health care; and investing in green technologies to propel the United States towards a low-carbon future, he said.

With public debt already on an upward trajectory before the Covid-19 epidemic, once the economy is on a much stronger footing, fiscal adjustment will be needed to stabilize debt, the IMF official said.

According to Gasper, in the absence of a vaccine or effective therapy to overcome the health crisis, uncertainty remains on the road to recovery. As such, fiscal policy will need to remain accommodative and flexible to better protect people, support businesses and facilitate the transition to a more resilient digital and green economy.

An earlier than justified exit from targeted support – such as wage subsidies for workers on leave, cash transfers and loan guarantees – could derail the recovery and lead to greater fiscal costs in the future, a- he declared.

Once an effective solution to the health crisis is available in the world and countries emerge safely and sustainably from deep containment, policymakers will need to address the structural weaknesses exposed by the crisis.

International coordination is absolutely necessary to ensure that low-income and developing economies with great development needs and financing constraints have access to bilateral and multilateral finance, including on concessional terms; and poor nations benefit from continued debt relief, Gasper added.

Debt Relief – Journal – DAWN.COM


PAKISTAN is on the verge of receiving debt relief under the G20 plan and, according to an official announcement, the total amount is $ 2 billion. It is possible that this amount will increase if the period of cover is extended beyond December 2020. For the moment, the relief is extended to loans from bilateral creditors, accompanied by a call from the G20 to private creditors to also offer ” terms”. Perhaps the same conditions can also be extended to multilateral creditors.

It was, however, a wise move on the part of the financial adviser to make public his government’s resolution not to go to private creditors for comparable relief. Throughout the period from the announcement of the plan until today, the finance branch of the government and the State Bank have sent confused signals to the private markets regarding their intention to seek debt relief. private creditors. This ambiguity has negatively impacted Pakistan’s credit rating, which has been under review by Moody’s, casting a shadow over the future of the country’s B3 rating. The rating agency explicitly said that the search for debt relief on bilateral loans under the G20 initiative has helped the review, but that such action is unlikely to have helped. ‘Negative impact on the rating because it is an officially sanctioned initiative and is more likely to free up resources than to restrict them. any further. It was the uncertainty over whether or not Pakistan will approach private creditors that appears to have motivated the decision, which appears to have forced the hand of the financial adviser who made it clear that the government did not intend to ask. reparation to private creditors. Now that relief is imminent, it is important to stress that it must be used in a manner consistent with the rationale under which it was offered. The G20 acted at the behest of multilateral creditors, the World Bank and the IMF, and all three have made it clear that the resources they seek to release must be used to fight the coronavirus. Part of that struggle is managing the economic fallout created by the pandemic and the mitigation efforts that flow from it. But to a large extent, resources are needed for social protection and increased investment in health. It is important that the space created by debt relief is used primarily to help fight the pandemic.

Posted in Dawn, le 22 May 2020

World Bank should continue to provide aid and review capital adequacy – Development Committee


FILE PHOTO: A participant stands near a World Bank logo at the International Monetary Fund – World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 12, 2018. REUTERS / Johannes P. Christo

WASHINGTON (Reuters) – The World Bank is expected to continue efforts to provide $ 160 billion in coronavirus aid by June 2021 and explore additional emergency funding and debt relief for developing countries, said Friday the board of directors of the bank.

In a statement, the Joint Development Committee of the World Bank and the International Monetary Fund said the “bold and decisive” response should be accompanied by a review of the financial capacity of the World Bank Group beyond l ‘ongoing exercise to ensure that it remains’ sufficiently capitalized to fulfill its mandate.

The statement said the IMF has so far provided some $ 100 billion in aid to more than 80 countries during the pandemic. He also urged the IMF “to deploy all the tools and resources available to help members to emerge sustainably from the crisis while building more resilient and inclusive economies”.

The statement said the World Bank’s support to more than 100 countries has so far totaled $ 45 billion, including $ 11 billion from its private sector arm, the International Finance Corporation and $ 2 billion from its agency. multilateral investment guarantee.

On Wednesday, US Treasury Secretary Steven Mnuchin warned the World Bank to manage its financial resources “wisely and transparently.” He said the bank should prioritize funds for poor countries with the greatest needs, and not those with solid access to market finance, “so as not to overburden shareholders with premature calls for money. new funding, ”Mnuchin said.

World Bank shareholders approved a $ 13 billion capital increase in 2018 that forced the bank to stop lending to richer middle-income countries, like China, in order to shift resources to the richest countries. needy.

The Development Committee, made up of 25 finance ministers and central bank governors representing major World Bank and IMF shareholder countries, including Mnuchin, said the World Bank and other multilateral development banks should “explore additional COVID-19 emergency funding proposals “for the poorest countries.

Reporting by David Lawder; Editing by Marguerita Choy and Daniel Wallis

Muskrat Falls Fiasco: Ottawa Offers NL Debt Relief


Last Thursday, as bills for the overdue and off-budget Muskrat Falls hydroelectric project finally came due, Prime Minister Justin Trudeau announced that the federal government was deferring $ 844 million in payments from Newfoundland and Labrador. This was good news for Newfoundland and Labrador Premier Andrew Furey, who faced the daunting task of borrowing money in bond markets where the province has not been. able to raise funds last March. In an interview with the allNewfoundlandLabrador economic news publication, Premier Furey said, “It’s a giant anchor around our collective souls. “

What is not clear from the Prime Minister’s remarks is what might accompany the lifeline he threw at the rookie Premier of Newfoundland and Labrador. The negotiations, which were previously described as seeking a way to prevent electricity rates from doubling in the province, are now described as work “on the financial restructuring of Muskrat Falls” and on “the next steps to support the Atlantic loop. “

The Atlantic Loop, in case you missed a one-line reference in last September’s Throne Speech, is a grand plan “that will connect surplus clean energy to regions in transition away from coal.” Translated, this means major investments in infrastructure to replace coal-fired electricity in the Maritime provinces with hydroelectricity from Quebec and Labrador. The benefits to Newfoundland and Labrador, other than alleviating the potentially overwhelming costs of the Muskrat Falls project, are uncertain. When asked if there was no Muskrat Falls deal without an Atlantic Loop deal involving the premier of Quebec, Furey said: “Even if they don’t exclude each other not mutually, they are not necessarily in tandem or in parallel, but they exist simultaneously in the same set of negotiations. I’m sure Mr. Dupont and Mr. Paddick will undertake.

Mr. Brendan Paddick is the former Chairman of the Board of Directors of Nalcor, the provincial Crown corporation that owns the Muskrat Falls project, and Mr. Serge Dupont is the federal government negotiator. Mr. Dupont’s appointment signals a transfer of the Muskrat Falls file from the Federal Ministry of Finance to the PMO. It also indicates the weight that the Prime Minister gives to the file.

Serge Dupont is a former Deputy Clerk of the Privy Council and former Deputy Minister at the Department of Natural Resources from 2010 to 2014. Since Mr. Dupont was Deputy Minister in 2011 when former Prime Minister Stephen Harper accepted a guarantee loan of $ 6.4 billion. for Muskrat Falls, he knows the project intimately.

The day after the Prime Minister’s announcement, the Bloc Québécois gave a foretaste of what awaits Mr. Dupont. In a press release entitled “Quebec does not have to finance the Muskrat Falls fiasco,” BQ spokesperson for natural resources, Mario Simard, deplored the new financial support for Muskrat Falls by declaring: ” Quebecers should not have to put a penny in this financial abyss designed to compete with Hydro-Quebec.

Most Newfoundlanders and Labradorians would agree with Mr. Simard that the Muskrat Falls project is a fiasco and, while it may hurt those who think Hydro-Quebec has Unjustly reaped the benefits of the massive, decades-old Churchill Falls hydroelectric project, it is clear that Muskrat Falls electricity is destined for export markets competing with Hydro-Quebec. The BQ’s position is that Ottawa’s support represents “unfair competition with our own money”.

In 2011, Quebec opposed Stephen Harper’s decision to guarantee what was then wrongly planned as a hydroelectric project worth more than $ 6 billion. Mr. Harper later agreed to transfer $ 2.2 billion to Quebec as compensation for the harmonization of the GST 20 years earlier. Of course, some thought it looked like a reward.

Premier Andrew Furey, who is due to call a provincial election in 2021, said: “We have to make sure that we deal with Muskrat Falls first, while creating – I think we can – creating responsibly, we can be a green battery helps remove Atlantic Canada and maybe even eastern Canada from coal and other unclean energy sources. In time, what the Prime Minister may find out is that deferring the initial payment of $ 884 million was the first step and that there is no second step without a much bigger deal with Atlantic. Loop.

Whether negotiations are still in the early stages or advanced, what Andrew Furey faces is part of Confederation realpolitik. Newfoundland and Labrador is negotiating from a position of fiscal weakness and one of the parties in the larger and more ambitious Atlantic Loop talks is powerful and has already played this game skillfully and successfully. .

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