The Annual International Monetary Fund (IMF) and World Bank Meetings are focusing on building an inclusive global economy and creating jobs. Ahead of the meetings, IMF Managing Director Christine LaGarde called for "bolder policies to inject a 'new momentum'" into the global economy. LaGarde warned of high debt and unemployment and increased geopolitical risks associated with conflict and disease.
"The risks the IMF raises are real. We need to address inequality if we are going to grow the global economy," said Eric LeCompte, Executive Director of the religious anti-poverty organization, Jubilee USA.
The IMF notes that sovereign indebtedness is a root cause of inequality and has released a series of papers over the past 18 months aimed at addressing the debt issue. In April of 2013, the IMF released an important paper advocating aspects of an international bankruptcy process to address global inequality. This past June, the IMF released a paper aimed at adding flexibility to the debt restructuring process in a paper on debt profiling. Debt sustainability was a major theme of this year's Spring Meetings. On Monday, the IMF released a significant paper that addresses predatory hedge fund behavior and so-called hold-out investors.
"The IMF needs to be commended for reviewing a number of approaches to stop vulture funds," noted LeCompte. "The IMF recognizes that if predatory and disruptive behavior persists, there need to be changes in US law to prevent the behavior."
The United Nations voted in September to challenge predatory financial behavior by beginning a dialogue on a global bankruptcy process. The UN process seeks to make sovereign defaults less likely and prevent hold-outs from obstructing debt restructurings. The vote puts pressure on the IMF to address the issue and offer solutions. Jubilee USA and the Jeanne Sauvé Foundation are holding a panel during the IMF meetings on Thursday to address some of these issues. The event includes panelists from the IMF, Bank of England, Franklin Templeton, Columbia University and the United Nations.
Jubilee USA Network is an alliance of more than 75 US organizations, 400 faith communities and 50 Jubilee global partners. Jubilee's mission is to build an economy that serves, protects and promotes participation of the most vulnerable. Jubilee USA has won critical global financial reforms and more than $130 billion in debt relief to benefit the world's poorest people. www.jubileeusa.org