Day: December 31, 2022

WASHINGTON (AP) — A provision in the recently signed defense spending bill mandates that the United States work to ease Ukraine’s debt burden at the International Monetary Fund, which could create tensions at the world’s lender-of-last-resort over one of its biggest borrowers.

The National Defense Authorization Act requires American representatives to each global development bank, including the IMF, where the U.S. is the largest stakeholder, to use “ the voice, vote, and influence ” of the U.S. in seeking to assemble a voting bloc of countries that would change each institution’s debt service relief policy regarding Ukraine.

Among other things, the U.S. is tasked with forcing the IMF to reexamine and potentially end its surcharge policy on Ukrainian loans. Surcharges are added fees on loans imposed on countries that are heavily indebted to the IMF.

The U.S. interest in changing the policy comes as it has distributed tens of billions for Ukrainian military and humanitarian aid since the Russian invasion began in February. Most recently, Ukraine will receive $44.9 billion in aid from the U.S. as part of a $1.7 trillion government-wide spending bill.

Inevitably, some U.S. grant money is spent servicing IMF loans.

“I can see why the Senate would want to relax the surcharge for Ukraine,” Peter Garber, an economist who most recently worked at the global markets research division of Deutsche Bank, wrote in an email. “As the principal bankroller of economic aid for Ukraine, the US would not want to deliver funds only to have them go right to the coffers of the IMF.”

Economists Joseph Stiglitz at Columbia University and Kevin P. Gallagher at Boston University wrote in February about surcharges, saying that “forcing excessive repayments lowers the productive potential of the borrowing country, but also harms creditors” and requires borrowers “to pay more at exactly the moment when they are most squeezed from market access in any other form.”

Other economists say the fees provide an incentive for members with large outstanding balances to repay their loans promptly.

Even with the aid, the beleaguered Ukrainian economy is expected to shrink by 35 percent, according to the World Bank, and the country will owe roughly $360 million in surcharge fees alone to the IMF by 2023.

The effort to wrangle the IMF’s 24 directors, who are elected by member countries or by groups of countries, to end the surcharges may not be so easy.

Just before Christmas, the directors decided to maintain the surcharge policy. They said in a Dec. 20 statement that most directors “were open to exploring possible options for providing temporary surcharge relief,” but others “noted that the average cost of borrowing from the Fund remains significantly below market rates.”

Prominent economists studying the war’s impacts pointed out in a December report — “Rebuilding Ukraine: Principles and Policies,” by the Paris- and London-based Centre for Economic Policy Research — that “some significant voting members may have interests that are not aligned with having Ukraine succeed economically.”

Securing consistent financing to Ukraine could become harder as the war rages on. There are growing fears of a global recession and concerns that European allies are struggling to deliver on their financing promises. In addition, the GOP is set this coming week to take control of the House, with the top Republican, Rep. Kevin McCarthy, saying his party will not write a “blank check” for Ukraine.

Mark Weisbrot, co-director of the liberal Center for Economic and Policy Research in Washington, said the surcharge issue affects not just Ukraine, but also other countries facing debt crises. Among them: Pakistan, hit by flooding and humanitarian crises, as well as Argentina, Ecuador, and Egypt, who together are on the hook for billions in surcharges.

“There is no logic to the IMF imposing surcharges on countries already in crisis,” Weisbrot said, “which inevitably happens because the surcharges are structured to hit countries already facing financial problems.”

He said the issue will become more urgent as Ukraine’s debt grows and the war drags on.

Jeffrey Sachs, an economist and director of the Center for Sustainable Development at Columbia University, said “these surcharges should certainly be eliminated,” adding: “The IMF undercuts its core lender-of-last-resort role.”

WASHINGTON (AP) — Black voters have been a steady foundation for Democratic candidates for decades, but that support appeared to show a few cracks in this year’s elections.

Republican candidates were backed by 14% of Black voters, compared with 8% in the last midterm elections four years ago, according to AP VoteCast, an extensive national survey of the electorate.

In Georgia, Republican Gov. Brian Kemp more than doubled his support among Black voters to 12% in 2022 compared with 5% four years ago, according to VoteCast. He defeated Democrat Stacey Abrams both times.

If that boost can be sustained, Democrats could face headwinds in 2024 in Georgia, Wisconsin, Michigan and Pennsylvania, where presidential and Senate races are typically decided by narrow margins and turning out Black voters is a big part of Democrats’ political strategy.

It’s too early to tell whether the 2022 survey data reflects the beginnings of a longer-term drift of Black voters toward the GOP or whether the modest Republican gains from an overwhelmingly Democratic group will hold during a presidential year. Former President Donald Trump, who has announced his third run for the presidency, received support from just 8% of Black voters in 2020, according to VoteCast.

The survey from this year’s midterms also found that Republican candidates in some key states improved their share of Latino voters, so any sustained growth in the share of Black voters would be critical.

A variety of factors might play into the findings, including voter turnout and candidate outreach. Yet some Black voters suggest they will be sticking with Republicans because they said the party’s priorities resonate with them more than those of Democrats.

Janet Piroleau, who lives in suburban Atlanta, left the Democratic Party in 2016, during Trump’s first run for office, and now votes Republican. That includes this year, when she voted for Kemp in his victory over Abrams.

Piroleau said she felt Democrats were pushing for more reliance on government programs. “That bothered me,” she said.

“For me, it was about being accountable and responsible and making your own decisions, and not depending on the government to bail you out,” Piroleau said.

April Chapman, who lives in metro Atlanta, is among the Black voters who favored Kemp and other Republican candidates.

Like Piroleau, Chapman cited issues such as immigration, border security and the economy as important in deciding to become a Republican a decade ago. But the 43-year-old mother said her main break with the party is over education.

She said she felt Democrats were trying to control what her children should be exposed to and how they should be educated.

“For our family, the government educational system was not the best option,” Chapman said.

Camilla Moore, chair of the Georgia Black Republican Council, said a large percentage of the voters Kemp won in the Black community “were actually Black Democrats.” Those voters made decisions based on Kemp’s performance in addressing issues they care about, Moore said.

Her group also suggested that the Kemp campaign advertise on Black radio and “expend a little more effort in some areas that were a little uncomfortable.”

The results in Georgia, she said, could be replicated elsewhere with the right candidates.

“It’s not going to work for everybody,” Moore said. “It does work for those Republicans who have demonstrated that they truly are a senator for all or a governor for all.”

Abrams’ campaign office and Fair Fight Action, which was founded by Abrams, did not answer repeated phone or email messages.

The VoteCast findings underscore a dynamic that Black activists and community leaders have long sought to convey — that Black voters are not a monolith and that the Democratic Party should not take them for granted.

Nationally, Republicans worked during the midterms cycle to try to shift a share of Black voters to their side. The GOP conducted business roundtables, prayer gatherings, food drives and school choice events to hear the kinds of priorities in Black communities that might influence their voting, said Janiyah Thomas, a communications strategist and former Black media affairs manager at the Republican National Committee.

Thomas, who recently voted Republican, added that her disagreement with the Black Lives Matter movement encouraged her switch.

Gloria J. Browne-Marshall, a professor at the John Jay College of Criminal Justice in New York and the author of a book on the voting rights movement, said Black voters need to hear from Democrats about why their vote is important and what the party will do for them.

She said the message is particularly important for younger voters, who “went out in the street and risked their lives for police reform” after the killing of George Floyd in 2020. They also want voting rights protected but got neither at the federal level during President Joe Biden’s first two years in office.

“Instead, we get Juneteenth, and I don’t remember who asked for Juneteenth,” Browne-Marshall said, referring to the new federal holiday that commemorates the end of slavery in America.

W. Franklyn Richardson, chair of the board of trustees of the Conference of National Black Churches, acknowledged that not all Black community priorities are met by Democrats but said the party is more likely to address those needs than Republicans.

“We have to pick the best of the two,” and continue pushing, he said.

For James W. Jackson, the choice was to switch to the Republican Party after he decided its values better aligned with his.

The pastor at Fervent Prayer Church in Indianapolis said he was a Democrat initially because it was the party of his father and many prominent Black leaders.

Not everyone sees a noteworthy shift of Black voters away from Democrats and toward Republicans. Ron Daniels, president of the Institute of the Black World 21st Century, said his question isn’t about what Democrats have failed to do, but rather what they have accomplished and not been more vocal about.

The agenda Biden has pursued since taking office “was fairly explicit about a number of key issues that relate to Black people. The problem is that because there is a hesitancy and a concern about whether or not white voters will be turned off,” Democrats have not promoted those moves, Daniels said.

Biden, he noted, named Kamala Harris as vice president, nominated Ketanji Brown Jackson to the U.S. Supreme Court and appointed Lisa Cook to the Federal Reserve. He also noted the impact of the American Rescue Plan on Black business owners.

“The fact of the matter is, they’re not talking about the tangible things that happened,” Daniels said.

The higher percentages of Black voters casting ballots for Republicans this year also may not suggest greater and more durable support for the GOP, said Derrick Johnson, NAACP president and CEO.

He noted that African Americans are a diverse voting group with varying concerns and priorities, and are attracted to specific candidates because of that. NAACP focus groups found that inflation, student loan debt and violence prevention were among Black voters’ top concerns. Candidates who speak to those concerns will be heard, he said.

“That’s what democracy should be — an opportunity to have choices among candidates,” Johnson said. “But that is not to suggest the national (Republican) party platform is more reflective of the needs and interests of African Americans as a whole.”

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Associated Press writer Hannah Fingerhut in Washington contributed to this report.

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Associated Press coverage of race and voting receives support from the Jonathan Logan Family Foundation. The AP is solely responsible for all content.