[stop-imf] Waters Bill - Debt Relief for Countries with HIV/AIDS

[Robert Weissman]

List of Cosponsors:  James Leach, Barney Frank, Barbara Lee, Spencer
Bachus, Tom Lantos, Carolyn Maloney, Markey, Corrine Brown, Jackson,
Schakowsky, Conyers, Rahall, Hoeffel, Grijalva, George Miller, Rangel,
Wexler, Millender-McDonald, Woolsey, McDermott, Stark, Olver, Lofgren,
Owens, McCollum, Moore, Lampson, Baldwin and Andrews.

           Want to Help Countries Struggling with HIV/AIDS ?

                          Cancel Their Debts !

Dear Colleague:

        We are writing to urge you to cosponsor The Debt Cancellation
for the New Millennium Act.  This bill would cancel the debts of the
world's poorest countries and give these countries a fresh start in the
new millennium.

        The Enhanced Heavily Indebted Poor Countries (HIPC) Initiative
was developed to free impoverished countries from the burden of debts
and allow them to invest their resources in HIV/AIDS treatment and
prevention, health care, education and poverty reduction programs.
Unfortunately, the HIPC Initiative failed to provide a lasting solution
to the problem of poor country debts, because the International Monetary
Fund (IMF) and the World Bank refused to provide their fair share of
debt relief.  While the United States agreed to cancel virtually all of
the bilateral debts owed by poor countries, the IMF and the World Bank
are reducing these countries' debts by less than half.  At least 18 of
the 26 countries that have received debt relief are still spending more
money on debt payments than they are on health care.

        Zambia provides an excellent illustration of why deeper debt
relief is necessary.   Zambia is a deeply impoverished country with a
per capita income of only $330 per year.  Almost 20 percent of the adult
population is infected with the AIDS virus, and 650,000 children have
been orphaned by AIDS.  The HIV/AIDS epidemic has also ravaged the
educational system by causing a shortage of trained teachers.  Yet the
IMF actually required Zambia to increase its annual debt service
payments after its total debt stock was reduced.  Moreover, Zambia still
spends more than twice as much money on debt payments as it does on
health care.

        The Debt Cancellation for the New Millennium Act would urge the
President to negotiate with the IMF and the World Bank to expand and
improve the HIPC Initiative and provide complete debt cancellation to
the world's most impoverished countries.  A summary of the bill is on
the reverse.  If you would like to cosponsor this bill, please contact
Kathleen Sengstock of Congresswoman Waters' staff at (202) 225-2201.

                                                Sincerely,

/s Maxine  Waters                               /s James Leach

/s Barney Frank                         /s Barbara Lee

                         The Debt Cancellation

                       for the New Millennium Act

                              Bill Summary

        The Debt Cancellation for the New Millennium Act would urge the
President to negotiate with the International Monetary Fund (IMF) and
the World Bank to make several changes to improve the Enhanced Heavily
Indebted Poor Countries (HIPC) Initiative:

1.  Full Debt Cancellation -- The United States has already agreed to
provide complete debt cancellation to poor countries and appropriate
funding for the HIPC Initiative.  Unfortunately, the IMF and the World
Bank have not provided comparable debt relief to these impoverished
countries.  The bill would require the IMF and the World Bank to use
their own resources to provide complete cancellation of 100 percent of
the debts that poor countries owe them.

2.  Prohibition on Structural Adjustment Programs -- The HIPC Initiative
requires poor countries to implement structural adjustment programs
approved by the IMF.  These programs impose economic austerity upon
these countries and are strongly opposed by civil society in many of the
countries in which they have been implemented.  The bill would allow
poor countries to receive debt cancellation without implementing the
IMF's structural adjustment programs.

3.  Immediate Suspension of Debt Service Payments -- The HIPC Initiative
requires poor countries to develop plans, known as Poverty Reduction
Strategy Papers (PRSPs), for reducing poverty and improving health and
education as a condition for receiving debt relief.  The purpose of
these PRSPs is to ensure that the savings from debt relief will be
invested in HIV/AIDS treatment and prevention, health care, education
and poverty reduction programs with the support of civil society.
However, the process of developing these PRSPs has required considerable
time and effort on the part of officials and citizens in many poor
countries, during which time the countries have had to continue making
payments on their debts.  The bill would allow poor countries to suspend
debt service payments as long as they are working in good faith to
develop their PRSPs.

4.  Expansion of Country Eligibility -- The bill would also change the
eligibility requirements of the HIPC Initiative to allow Bangladesh,
Haiti and Nigeria to participate.  These countries were excluded from
the HIPC Initiative, although they are impoverished countries with
significant debt burdens.

5.  Technical Assistance -- The bill would require the Secretary of the
Treasury to provide technical assistance to poor countries, upon
request, regarding compliance with all conditions for debt relief,
including the development and implementation of their PRSPs.