Monthly Archives March 2021

WASHINGTON (Reuters) – World Bank President David Malpass on Saturday warned G20 leaders that failure to provide more permanent debt relief to some countries could lead to increased poverty and a repeat of disorderly defaults observed in the 1980s.

Malpass said he was satisfied with the progress made by the Group of 20 major economies on increasing debt transparency and providing debt relief to the poorest countries, but more was needed.

“Debt reduction and transparency will enable productive investments, a key to achieving a faster, stronger and more sustainable recovery,” Malpass told G20 leaders in a meeting via video conference.

“We must beware of doing too little now and then enduring disorderly defaults and repeated debt restructurings like in the 1980s,” he said.

The so-called “lost decade” of the 1980s saw many heavily indebted countries in Latin America and elsewhere unable to pay their debts, stunting growth and efforts to reduce poverty.

Malpass, who began pushing for debt relief at the onset of the COVID-19 crisis, warned that debt problems were becoming more prevalent, including in Chad, Angola, Ethiopia and Zambia, and that the failure to provide “more permanent debt relief” left bleak prospects for poverty reduction.

G20 leaders are set to formally approve the extension of a temporary freeze on official bilateral debt payments by the poorest countries, and the adoption of a common framework for debt restructuring to the future.

Some countries, including China, have remained reluctant to accept the need for debt cancellation, although top economists say it will likely be necessary in some cases. Private sector creditors also did not participate, despite repeated calls from G20 leaders, civil society groups and the United Nations.

Malpass said the Bank is working closely with the G20 in countries affected by fragility, conflict and violence, including the Sahel, Somalia, Lebanon, Gaza and the West Bank.

In Sudan, he said he hoped that arrears clearance could be done quickly, especially given the influx of refugees from neighboring Ethiopia, which would allow substantial funding from the World Bank. to start pouring in almost immediately.

The United States decided last month to remove Sudan from its list of states that sponsor terrorism, removing one of the obstacles facing the heavily indebted African country, which has some $ 60 billion in foreign debt. .

On April 6, VHA stopped printing and sending monthly patient statements. VA understands that COVID-19 has negatively affected some veterans. As a result, VA will not charge interest or add administrative fees, and will suspend collection actions on healthcare debts until at least December 31, 2020.

Monthly patient statements may resume in January 2021. Statements will include co-payments for medical care and prescriptions received since the suspension of patient surveys, in addition to co-payment fees unpaid before April 2020.

In November 2020, Veterans with a balance in their accounts will receive a newsletter only that will indicate that balance and contain information on how to make a payment, should Veterans choose to do so. Staff will also make calls to Veterans with balances over $ 2,000.

Veterans can make voluntary payments while filings are suspended. Veterans will need their account number to access their balance and other related information.

You can get an account balance by:

• Call 866-400-1238.
• Call the facility’s revenue office at your local VA medical center.
• Looking at the letter, VA will send to veterans in November 2020, which will include a checking account balance.

payment methods

Methods by which a Veteran can pay on a balance:

• pay.gov.
• By phone at 888-827-4817; The veteran must have an account number.
• By mail to: Department of Veterans Affairs, PO Box 3978, Portland, OR 97208-3978.

Options

Debt relief options are still available to veterans. They understand:

• Set up a repayment plan.
• Request a waiver, write-off or compromise of your debt.
• Request a determination of VA difficulties.

For more information visit https://www.va.gov/health-care/pay-copay-bill/financial-hardship/ or contact a VA Medical Center billing office.

Pascrell-Gomez-Menendez Bill To Make Student Debt Forgiveness Tax Free Enables Congress

Major relief for student borrowers included in historic US bailout

WASHINGTON, DC – Today, legislation presented by U.S. Reps Bill Pascrell, Jr. (D-NJ-09), Jimmy Gomez (D-CA-34) and Senator Bob Menendez (D-NJ) to exempt from tax The student loan exemption was approved by the United States Congress and sent to the White House for the President’s signature Biden. This significant relief for student borrowers has been included in the US bailout, comprehensive aid and stimulus legislation passed by Democrats today to address the dual threat of the continuing pandemic and its economic fallout.

“The government exists to share the burden of everyday life and do good in the lives of Americans” said Rep. Pascrell. “For tens of millions of Americans in debt to pay for their education, the burden can be crippling. By freeing student borrowers from the burden of heavy taxes, we are now empowering millions of Americans to continue living on a cleaner slate. I thank my colleague Representative Jimmy Gomez for his leadership. So many lives can be changed for the better with our plan to make loan cancellation tax free. “

“Student loan debt is a trillion dollar industry crippling graduates of all ages and backgrounds nationwide, especially first generation students and people of color.” said Representative Gomez. “This crisis is so severe that it affects people even decades after graduation, including myself. As my colleagues and I continue to push President Biden to quash the student through executive action, my legislation will be key to ensuring that American workers are not penalized for possible government relief. With the passage of the American Rescue Plan Act which includes our tax-free student loan exemption legislation, we are moving closer to the reality of blanket student debt forgiveness for millions of Americans. .

“Millions of Americans were already drowning under a mountain of student loan debt before they were hit by the economic impact of COVID-19. And when they are lucky enough to get some relief, then the government shouldn’t tie a heavy fiscal anchor around their financial lifeline ”, Senator Menendez said. “We now have a tremendous opportunity to relieve this crippling weight and that opportunity should not be jeopardized by an arbitrary tax bill on unrecorded income. I hope this paves the way for President Biden to deliver real debt relief that many student borrowers need and give our economy a boost that benefits everyone.

Under current law, most remissions on student loans, including remissions under federal income-based repayment plans, are treated as additional taxable income. This often pushes borrowers into higher tax brackets and leaves them struggling with a crippling tax payment on their canceled loans.

The Pascrell-Gomez-Menendez bill would exclude the full or partial forgiveness of any university loan between December 31, 2020 and January 1, 2026 from a borrower’s income. This relief applies to public, private and institutional loans. For example, a family of four that earns $ 100,000 a year and whose $ 50,000 in university loans have been canceled could receive more than $ 10,000 in federal tax savings under this law.

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gGOVERNMENTS IN MANY poor countries have been faced this year with a sickening choice between spending to support their populations during the covid-19 crisis and paying creditors. On October 14, the finance ministers of the g20 country groups offered temporary balm to 73 of the world’s most needy countries, saying they would extend their debt-service suspension initiative (DSSI) to suspend debt service payments until July 2021. This should free up funds to fight the pandemic (see chart). But a lasting solution will take more dramatic steps.

The public debt of poor countries has fallen from 29% GDP in 2012 to 43% in 2019, according to the IMF, and is expected to rise to 49% this year. Collapsing tax revenues and inflated deficits make it harder to pay bills and make foreign investors nervous. According to data from the World Bank and the three largest rating agencies, at least 33 of the DSSI-the eligible countries were either close to over-indebtedness or over-indebted, that is, they were struggling to meet their repayment obligations. The 73 countries eligible for DSSI were expected to spend over $ 31 billion in debt service between May and December. About half of this was owed by the 33 most budget-constrained countries, including Ethiopia, Mozambique and Zambia.

If a wave of sovereign defaults was avoided, it was because central banks lowered interest rates and international financial institutions distributed emergency funds. But neither these nor the DSSI, which only suspends debt service payments, may resolve longer-term solvency issues. Where they exist, the best solution is probably a quick debt restructuring to avoid disorderly defaults. The disappointing experience of DSSI helps illustrate why rapid restructuring might be devilishly difficult to achieve. So far, only around $ 5 billion in debt service payments between May and December of this year have been suspended.

The extension to the DSSI might suggest that lenders try to put off tough restructuring issues. Encouragingly, however, the g20 also said he had agreed in principle to a “common framework” for debt restructuring, which could ensure that g20 creditors and the private sector are treated the same. Details have yet to be worked out before a summit in November. But if this prompts the Chinese authorities to coordinate their different lending agencies, it could bring real relief. ■

This article appeared in the Finance and Economics section of the print edition under the title “Relief Efforts”

Since the start of the pandemic, financial institutions, including World Bank Group and the International Monetary Fund (IMF) – along with United Nations entities, regional organizations and groups of countries such as the G20 – examined the tools available to stabilize markets, prevent job losses and preserve hard-earned development gains.

At a joint IMF-World Bank high-level meeting on mobilization with Africa on Friday, the UN Secretary General António Guterres welcomed the swift actions of the bodies to support member countries, while stressing that more work will be needed.

“We know that this virus will spread like wildfire and that there is no firewall” he said. “Alleviating the overwhelming debt is absolutely crucial. “

The UN chief noted that in Africa, households and businesses were suffering from liquidity problems even before the virus took hold on the continent. As countries strive to prevent millions of people from sliding into poverty, already unacceptable levels of inequality rise, fragility increases and commodity prices fall.

Debt and pandemic: a “perfect storm”

The current health and economic emergencies caused by COVID-19[female[feminine emerged against a backdrop of high indebtedness many developing countries – including middle income countries – around the world.

Since the 2008 financial crisis, the public external debt of many developing countries has skyrocketed. Low interest rates and high liquidity have boosted many countries’ access to commercial loans. As of January 2020, the debt of 44% of least developed countries and other low-income developing countries was already rated as high risk or in difficulty.

The contraction induced by COVID-19 is having dire consequences. Global financial markets come to a halt as investors rush to withdraw funds from emerging markets and other high-risk sectors. The pandemic is straining national budgets as countries struggle to meet health needs, respond to rising unemployment and support their economies.

UN experts warn Africa could be in its first recession in 25 years, while Latin America and the Caribbean face the worst recession in history. Similar decelerations are observed in Asia and the Arab region.

Shaping proactive responses

Against this backdrop, the UN is arguing for a full COVID-19 response set representing a double-digit percentage of global GDP.

He also urges international financial institutions to do everything possible to avert a devastating debt crisis with disorderly defaults, stressing that debt relief must play a central role in the global response to the pandemic.

Speaking at the joint IMF / World Bank meeting, the Secretary General welcomed the first steps taken by the G20, including the suspension of debt service payments for all countries of the International Development Association.

He also called for more resources for the IMF – including through the issuance of special drawing rights – as well as increased support to the World Bank and other global financial institutions and bilateral mechanisms.

Three-phase plan to tackle debt

The organization has proposed a three-step strategy to prevent heavily indebted countries from suffering the worst impacts of the COVID-19 emergency.

First, it calls for a generalized “debt stop” for developing countries without access to financial markets. Second, it calls for more comprehensive options for debt sustainability with instruments, such as debt swaps, and a debt mechanism for the debt. Sustainable Development Goals.

Third, the plan calls for tackling the structural problems of the international debt architecture, in order to avoid defaults.

The framework rests on a foundation of shared responsibility between debtors and creditors, as well as an understanding that debt restructuring must be timely, orderly, effective, fair and negotiated in good faith.

“In all our efforts, we must focus on the most vulnerable and ensure that the rights of all are protected,” said the UN chief.