CONGRESSWOMAN WATERS AND SEVENTY OTHER MEMBERS OF CONGRESS URGE TREASURY SECRETARY SNOW TO NEGOTIATE 100% DEBT CANCELLATION FOR POOR COUNTRIES
Last night, Reps. Maxine Waters (D-CA), Spencer Bachus (R-AL), Barney Frank (D-MA) and James A. Leach (R-IA) sent a letter to Treasury Secretary John Snow, urging him to negotiate an agreement that provides 100% cancellation of the debts of impoverished countries at the upcoming meeting of the G-7 Finance Ministers on February 4-5. Seventy-one Members of Congress signed the letter. The text of the letter follows:
As part of your efforts to achieve debt relief for the world's most impoverished countries, we write to urge you to negotiate an agreement that provides 100% cancellation of multilateral debts owed by impoverished countries in Asia, Africa and Latin America at the upcoming meeting of the G-7 Finance Ministers on February 4-5 in London.
Impoverished countries will never be able to eradicate poverty as long as they must continue to make payments on old loans that they never will be able to repay. Money that impoverished countries must send to creditors such as the IMF and the World Bank is money that is not spent on pressing social needs like health care, education and clean water. Debt payments to multilateral creditors also interfere with poor countries' efforts to recover from disasters like the recent earthquake and tsunami in Asia. The people of impoverished countries need a chance; they need full debt cancellation.
Existing programs that provide limited debt relief - most notably the Heavily Indebted Poor Countries (HIPC) Initiative of the IMF and the World Bank - have proven that even partial debt relief is an effective way to reduce poverty. The most recent analysis of the HIPC Initiative by the IMF and the World Bank shows that since 1999, countries that received the limited debt relief provided by the HIPC Initiative almost doubled their poverty-reduction expenditures.
However, the limited relief available under the HIPC Initiative has failed to provide a lasting solution to the debt crisis. HIPC countries still send more than $2 billion in debt service payments to the IMF and the World Bank each year. Debt service payments for HIPC countries have been reduced by less than one-third. Furthermore, several impoverished countries that were excluded from the HIPC Initiative are in urgent need of debt relief.
We urge you to negotiate an agreement that provides 100% multilateral debt cancellation for all countries eligible for the HIPC Initiative, as well as other needy and deserving countries, at the upcoming G-7 Finance Ministers' meeting. We look forward to your response and to working with you to achieve a historic breakthrough canceling all of the multilateral debts of impoverished countries early this year.
James A. Leach
Bobby L. Rush
Jesse Jackson, Jr.
James P. McGovern
Fortney Pete Stark
William Lacy Clay
Eleanor Holmes Norton
Stephanie Tubbs Jones
Eddie Bernice Johnson
Michael R. McNulty
Carolyn C. Kilpatrick