House Passes Bill That Would Expand Debt Relief Plan by 25 Developing Countries
The House on Wednesday voted 285-132 to approve a bill (HR 2634) that would expand the list of poor countries eligible for debt relief by 25 nations, the AP/Google.com reports. The bill, sponsored by Rep. Maxine Waters (D-Calif.), would require the Bush administration to initiate talks with international financial institutions, such as the World Bank, to establish an agreement allowing new countries to receive debt relief. To be eligible for debt relief, countries must commit to reducing poverty, practicing good governance, holding free elections, fighting corruption and denouncing terrorism and human rights violations, the AP/Google.com reports (Abrams, AP/Google.com, 4/16).
Leaders from the Group of Eight industrialized nations in July 2005 at the close of their summit in Gleneagles, Scotland, agreed to an immediate doubling of aid to Africa to $50 billion annually in order to fight poverty and disease on the continent. The final summit communique officially endorsed a debt relief plan, which canceled at least $40 billion in debt owed by the world's 18 poorest nations. The communique also included an agreement on providing universal access to HIV/AIDS treatment, according to former British Prime Minister Tony Blair (Kaiser Daily HIV/AIDS Report, 6/7/07).
Since 1996, more than 30 countries have received some form of debt relief equal to about $80 billion under the Heavily Indebted Poor Countries Initiative. Waters said that under the program, Uganda has been able to allocate $58 million from debt repayments to address electricity shortages, malaria and water contamination. She added that Zambia has diverted $24 million to eliminate fees for health care in rural areas under the program. "Tragically, many other countries are still starving their children in order to pay their debts," Waters said. The measure still requires Congress to approve agreements to cancel the debts of individual countries, the AP/Google.com reports.
The countries designated in the bill owe about $24 billion to the World Bank, $2 billion to the International Monetary Fund and $11 billion to the African Development Bank and Asian Development Bank. The measure also includes a nonbinding resolution that says the U.S. should pay $600 million it owes to multilateral development banks. An amendment that was included in the bill and advocated by Republican lawmakers would prohibit debt relief to countries that conduct business with Iran.
The White House in a statement said it does not support the bill because some of the countries covered are managing their debts or are actively working toward expanded access to international capital markets. "Providing debt relief to countries that can service their debt sends the wrong message," the statement said. The Bush administration also expressed concerns over the cost of forgiving debt, which is estimated to be about $1 billion over nine years.
Rep. Spencer Bachus (R-Ala.), the ranking member of the House Finance Committee, said the new round of debt relief would cost every U.S. resident about $2. Debt relief "is dollar for dollar the most effective program in assuring our national security," Bachus said, adding, "We cannot just simply watch as these countries slip into chaos and discord." House Speaker Nancy Pelosi (D-Calif.) said debt relief could eliminate "some of the factors that contribute to the fury of despair that leads to violence that makes the world less safe." Bishop Thomas Wenski of the U.S. Conference of Catholic Bishops in a letter to lawmakers said the bill "represents a major new step" toward making debt cancellation a reality for almost all heavily impoverished countries (AP/Google.com, 4/16).