Remarks at Jubilee USA Congressional Roundtable
"I am honored to join all of you this morning. I thank Neil Watkins, Jubilee USA Network's Executive Director, and Melinda St. Louis, Deputy Director, for inviting me to this Roundtable. More importantly, I thank all of you for participating in the Annual Network Meeting, and for your courageous and unflinching support for canceling the debts of the world's poorest countries.
The Jubilee Movement is one of the most outstanding humanitarian efforts I have seen in my career. Over the past ten years, Jubilee has convinced Members of Congress from both political parties, Executive Branch officials, and political leaders from around the world to cancel poor country debts. I am so proud of my affiliation with the Jubilee Movement because it brought the needs of the world's poorest people to the attention of the world's most powerful leaders.
Ten years ago, I worked with the Jubilee Movement and my colleagues in Congress to pass legislation to provide debt relief to the world's poorest countries. Our legislation provided complete debt cancellation for the bilateral debts that poor countries owed to the United States. Several other donor countries followed our example and canceled the debts that were owed to them as well. Our legislation also directed the Clinton Administration to negotiate with other world leaders to significantly reduce poor countries' multilateral debts.
The following year, the House passed my amendment to the Fiscal Year 2001 Foreign Operations Appropriations bill, which increased funding for debt relief from $69 million to $225 million. This amendment proved that Congress supported full funding for the debt relief program.
Since then, I have continued to work with the Jubilee Movement to convince the Clinton Administration, followed by the Bush Administration, as well as the International Monetary Fund (IMF), the World Bank, and other multilateral financial institutions, to expand debt relief for the world's poorest countries. As a result of our efforts, 26 heavily indebted poor countries have received complete cancellation of their debts.
We could never have done this without the tireless efforts of the Jubilee Movement and participating churches and organizations nationwide.
Benefits of Debt Relief
Debt relief has proven to be effective in freeing up resources for poverty reduction. Cameroon used its savings of $29.8 million from debt cancellation in 2006 for national poverty reduction priorities, including infrastructure, social sector and governance reforms. Uganda used its savings of $57.9 million to improve energy infrastructure to ease acute electricity shortages, as well as primary education, malaria control, healthcare, and water infrastructure. Zambia used its savings of $23.8 million to increase spending on agricultural projects and to eliminate fees for healthcare in rural areas.
There are many needy and deserving poor countries that have yet to benefit from the cancellation of their debts.
The Jubilee Act
In 2007, I introduced H.R. 2634, the Jubilee Act for Responsible Lending and Expanded Debt Cancellation. The Jubilee Act will expand debt cancellation to additional needy and deserving poor countries and preserve the benefits that debt cancellation has provided to impoverished people worldwide.
Specifically, the Jubilee Act will make about 20 additional low-income countries eligible for complete debt cancellation by the United States, the World Bank, the IMF, and other bilateral and multilateral creditors.
In order to receive debt cancellation, the governments of these countries will be required to make policy decisions through transparent and participatory processes and use the savings from debt cancellation on programs that reduce poverty. Such programs include basic education, nutrition, health services, improvements to infrastructure, and programs to redress environmental degradation.
The Jubilee Act also requires the Secretary of the Treasury to begin negotiations with other bilateral and multilateral creditors to provide that the future financial needs of low-income countries will be met primarily through grants rather than new loans and to develop a framework for responsible lending. These policies will prevent poor countries from falling back into debt after their debts have been cancelled.
The Jubilee Act was passed by the House of Representatives on April 16th of last year by an overwhelming, bipartisan vote of 285 to 132. A similar bill was introduced in the Senate by Senator Robert Casey. It was passed by the Committee on Foreign Relations on June 24, 2008. Unfortunately, it was not brought before the full Senate prior to adjournment.
I am currently seeking original cosponsors for the Jubilee Act, and I plan to re-introduce it within the next month.
I also introduced the H.R. 2932, the Stop VULTURE Funds Act. This bill is designed to protect impoverished countries from predatory lawsuits by vulture funds.
Vulture funds are private investment funds that buy up the debts of poor countries at reduced prices, usually for pennies on the dollar. They then sue these countries to recover the original value of the debts plus interest. Several poor countries that have received debt cancellation from the United States, other participating donor countries, and multilateral financial institutions have subsequently been sued by vulture funds.
The Stop VULTURE Funds Act would make it illegal for vulture funds to use U.S. courts for the purpose of suing poor countries to obtain usurious payments. Any lawsuit demanding more than the amount the investment fund paid to buy the debt plus 6% interest per year would be considered usurious. Any fund pursuing a lawsuit against a protected poor country would be required to provide disclosures to the court in order to prove the fund is complying with the law. Countries that commit gross violations of human rights, engage in excessive military spending, support terrorism, or fail to cooperate with the United States on narcotics control matters would not be protected under this bill. Investment funds would still be allowed to buy and sell poor country debts on the open market and negotiate with poor countries to obtain payment.
The Stop VULTURE Funds Act would protect the world's poorest countries from the predatory practices of vulture funds and allow these countries to use their limited resources to meet the needs of their people. The Stop VULTURE Funds Act has 24 cosponsors.
I will not give up until all needy and deserving poor countries have received complete cancellation of their debts.
I know that you will not give up either. The fact that all of you have returned to Washington for this Annual Network Meeting is proof of that. Over the years, Jubilee activists have touched the hearts of Republicans and Democrats alike. I know you can touch their hearts once again, and I know you will.
So please give yourselves a round of applause!"