[stop-imf] AFL-CIO Calls for Debt Cancellation

[Robert Weissman]

April 26, 2001

Dear Representative / Senator:

During the International Monetary Fund (IMF) and World Bank meetings
this week in Washington, the issue of debt cancellation will be
discussed.  The AFL-CIO has urged the U.S. government to call on the IMF
and World Bank to immediately cancel 100 percent of the debts owed to
them by impoverished countries.  We have worked closely with Congress
and joined people of faith, humanitarian groups, environmentalists, and
trade unionists around the world in calling for these crippling debts to
be lifted, and we are proud of the progress that has been made with your
help.

Thanks to Congress, the United States has already committed to
canceling 100 percent of the bilateral debts owed by the poorest and
most indebted countries, and other G-7 countries have done the same.
Added debt relief has made a big difference, but even with this relief
many poor countries still spend more servicing their international debts
than they do on health care and education.  Workers and their families
pay the price in needless human suffering.  In these countries, the
devastation of the HIV/AIDS crisis continues to grow, too many people
lack access to adequate food and clean water, and millions of children
still go to work each day instead of to school.

It is time for the IMF and the World Bank - the poor countries'
largest creditors - to match the commitment already made by the United
States and other countries and cancel 100 percent of their debts.
Independent financial analyses show that these debts can be canceled
now, out of existing IMF and World Bank resources, without impairing the
institutions' ability to provide generous development assistance in
the future. This would not require any U.S. funds beyond the $240
million we have already committed to provide this year under the current
debt relief program.

One hundred percent IMF and World Bank debt cancellation is not only a
financial possibility, it is a moral imperative. We urge you to call on
the Treasury Department to instruct our representatives at the IMF and
World Bank to insist that the institutions immediately cancel 100
percent of the debts owed to them by impoverished countries out of their
existing reserves.  This should include some of the poor, indebted
countries that do not meet the criteria for the institutions' Highly
Indebted Poor Country (HIPC) debt relief program, such as Bangladesh,
Haiti, and Nigeria.  Moreover, this debt cancellation should not be
conditioned on the implementation of failed structural adjustment
policies, which have not produced substantial growth, reduced poverty,
or promoted development in poor countries.  Finally, trade unions and
civil society groups in these countries must have a role in determining
how the savings resulting from debt cancellation will be spent to fight
poverty and support long-term human development.

Congress can make this vision a reality.  This simple and sensible
policy will cost U.S. taxpayers nothing, and it will finally allow
millions of people in developing countries to escape the chains of debt
and to start on the path to equitable, sustainable, and democratic
development.

We look forward to working with you on this vital issue.

Sincerely,
William Samuel, Director
DEPARTMENT OF LEGISLATION