Congresswoman Waters Introduces Jubilee Act of 2007
Today, on Capitol Hill, Rep. Maxine Waters (D-CA) introduced the Jubilee Act for Responsible Lending and Expanded Debt Cancellation of 2007. Joining the Congresswoman as original cosponsors of the Jubilee Act are Reps. Spencer Bachus (R-AL), Carolyn B. Maloney (D-NY), Luis Gutierrez (D-IL), Donald Payne(D-NJ), Barbara Lee (D-CA), and Emanuel Cleaver (D-MO). Congresswoman Waters made the following statement:
I am proud to introduce the Jubilee Act for Responsible Lending and Expanded Debt Cancellation of 2007. This bill will expand existing debt cancellation programs for the world's poorest countries and ensure that the benefits from debt cancellation will not be eroded by future lending to these impoverished nations.
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 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 United States 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 just 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.
The Jubilee Act will expand debt cancellation to all needy and deserving poor countries and preserve the benefits that debt cancellation has provided to impoverished people worldwide. I urge all of my colleagues to support this important legislation to reduce poverty through much needed debt cancellation reforms.