Congresswoman Waters Calls for Poor Country Debt Cancellation at a Hearing on Her Legislation
Today, the House Committee on Financial Services held a hearing on H.R. 2634, the Jubilee Act, which was introduced by Rep. Maxine Waters (CA-35). The Jubilee Act is cosponsored by 86 Members of Congress and supported by the Jubilee USA Network, along with over 60 development, religious, environmental, and labor organizations. Companion legislation was introduced in the Senate by Senator Robert Casey (PA) and Senator Richard Lugar (IN). At the hearing, Congresswoman Waters made the following statement:
I would like to begin by thanking Chairman Barney Frank and Ranking Member Spencer Bachus for organizing this hearing and for their support for the Jubilee Act. I also would like to thank the Jubilee Movement for all of their efforts over the past ten years to cancel 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, officials of the Clinton and Bush Administrations, 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.
I introduced the Jubilee Act to cancel the debts of additional needy and deserving poor countries and to ensure that the benefits of debt cancellation will not be eroded. Because of the tireless efforts of Jubilee Movement activists, the Jubilee Act now has 86 cosponsors.
Existing debt cancellation programs have freed up resources to reduce poverty in some of the world's poorest countries. Cameroon is using its savings of $29.8 million from debt cancellation in 2006 for national poverty reduction priorities, including infrastructure, social sector and governance reforms. Uganda is using its savings of $57.9 million on improving energy infrastructure to ease acute electricity shortages, as well as primary education, malaria control, healthcare, and water infrastructure. Zambia is using its savings of $23.8 million to increase spending on agricultural projects and to eliminate fees for healthcare in rural areas. However, there are many needy and deserving poor countries that have yet to benefit from the cancellation of their debts.
The Jubilee Act will make up to 67 of the world's poorest countries eligible for complete debt cancellation by the United States, the World Bank, the International Monetary Fund (IMF), and other bilateral and multilateral creditors. In order to receive debt cancellation, the governments of these countries will be required to allocate the savings from debt cancellation towards spending on poverty-reduction programs. They will also have to engage interested parties within their societies, including a broad cross-section of civil society groups, in the spending allocation process; produce an annual report on this spending; and make it publicly available.
Countries would be excluded from receiving debt cancellation under the Jubilee Act if they have an excessive level of military expenditures; provide support for acts of international terrorism; fail to cooperate on international narcotics control matters; or engage in a consistent pattern of human rights violations. Countries also would be excluded if they lack transparent and effective budget execution and public financial management systems to ensure that the savings from debt cancellation would be spent on reducing poverty.
The Jubilee Act will establish a framework for responsible lending in order to preserve the benefits that debt cancellation has provided to poor countries and their people. The Jubilee Act requires the Secretary of the Treasury to take action to end the predatory practices of "vulture funds," private investment funds that buy up the debts of poor countries at reduced prices before these countries receive debt cancellation and then sue these countries to recover the original value of the debts plus interest. Finally, the Jubilee Act will require the Secretary of the Treasury to develop and promote policies to prevent bilateral, multilateral and private creditors from eroding the benefits of debt cancellation through irresponsible or exploitive lending.
I look forward to hearing the views of the witnesses on how the Jubilee Act can be effectively implemented and how it will benefit the world's poorest countries and their people.