US Cong letter on debt in Central America

[Robert Weissman <rob@essential.org>]

Congressman David E. Bonior (D-MI) Released the Following Letter to
President Clinton Signed by 54 Members of Congress Concerning Central
American Debt Relief:


One Hundred Sixth Congress
U.S. House of Representatives

January 14, 1999

The Honorable William J. Clinton
President of the United States
The White House
Washington, DC 20500

Dear President Clinton:

	The impact of Hurricane Mitch upon countries in Central America,
notably Nicaragua, Honduras, Guatemala, and El Salvador, has been
enormous. Its devastating human impact is clear: estimates are that over 3
million people in the region have lost their homes and livelihoods. The
impact on the countries' productive capacity has been equally severe. All
four countries have suffered major damage to agriculture, a primary
generator of the foreign exchange these countries require to survive in
the global economy. 

	This massive destruction of productive capacity clearly calls into
question these countries' ability to rebuild and at the same time service
(and ultimately pay off) their international debts. Even before the
hurricane, their large debt service obligations were discouraging foreign
investment and diverting budgetary allocations away from essential
investments in health and education.  For these reasons, we welcomed your
Administration's initial move to grant Nicaragua and Honduras a two-year
moratorium on debt payments to the US government and the subsequent
agreement reached at the Inter-American Development Bank last month. 

	Yet we must do still more to help Central Americans recover from a
natural disaster that, as many have noted, has set back regional
development prospects by two to five decades. We are asking you to exert
leadership in persuading the international community to cancel these
countries' debts and thus speed their economic recovery. 

	It is the continuance of these tremendous debt loads themselves,
not just the interest payments owed on them, that threatens the entire
region's reconstruction effort. The debts not only deter new foreign
investment but also yield most economic decision-making to the hands of
international creditors, undermining fragile democratic processes. The
debt overhang also prevented investments in basic emergency preparedness
that might have reduced the scale of destruction wrought by Hurricane
Mitch. 

	While a payment moratorium may provide temporary relief, these
countries still will be unable to service their debts after three years,
especially if they expect to make needed investments in emergency
preparedness and sustainable development. 

	We therefore urge you to act to cancel the current United States
bilateral debt of the countries most affected by Hurricane Mitch. In
addition, we urge you to work with other G-7 nations to convene an
emergency meeting of all international creditors, including non-Paris Club
creditors and commercial banks, to agree on bilateral and multilateral
debt cancellation. This debt cancellation must not be conditioned on the
implementation of economic policies that increase poverty or environmental
damage. It is imperative that the United States take a leadership role in
developing a long-term recovery strategy in the region. 

Sincerely,

David E. Bonior
Neil Abercrombie
Robert E. Andrews
Xavier Becerra
Howard L. Berman
Sanford D. Bishop, Jr.
Robert A. Brady
Sherrod Brown
George E. Brown, Jr.
John Conyers, Jr.
Peter A. DeFazio
William D. Delahunt
Norman D. Dicks
Eliot L. Engel
Barney Frank
Martin Frost
Gene Green
Luis V. Gutierrez
Tony P. Hall
Maurice D. Hinchey
Rubén Hinojosa
Rush D. Holt
Amo Houghton
Sue W. Kelly
Dale E. Kildee
Carolyn C. Kilpatrick
Dennis J. Kucinich
Nick Lampson
Tom Lantos
Barbara Lee
John Lewis
James P. McGovern
Michael R. McNulty
George Miller
John Joseph Moakley
Constance A. Morella
Solomon P. Ortiz
Frank Pallone, Jr.
Bill Pascrell, Jr.
Donald M. Payne
Nancy Pelosi
David E. Price
Ciro D. Rodriguez
Carlos A. Romero-Barceló
José E. Serrano
Christopher H. Smith
Fortney Pete Stark
Ted Strickland
Bennie G. Thompson
John F. Tierney
Edolphus Towns
Robert A. Underwood
Lynn C. Woolsey
Albert Russell Wynn
Karen Hansen-Kuhn
Latin America Program Coordinator
The Development GAP
927 15th Street, NW, 4th Floor
Washington, DC 20005

tel. (202)898-1566
fax  (202)898-1612
web site: www.igc.org/dgap