Debt relief for world's poorest edges closer

KDean75206 at SPAMaol.com KDean75206 at SPAMaol.com
Wed Nov 3 20:47:29 MST 1999



I don't know if this is a good thing or a bad thing--the part that says
"provided the countries adopt poverty reduction measures".  From the
Bourgeoise leadership--what does that mean?  We never know for sure!---KD

Debt relief for world's poorest edges closer
By Mark Egan

WASHINGTON, Nov 3 (Reuters) - Debt relief for the world's poorest nations
inched forward on Wednesday as the U.S. House Banking Committee authorised
legislation on the issue which went beyond President Clinton's request.

The legislation promises to wipe out debts owed to the United States by up to
41 nations, provided the countries adopt poverty reduction measures.

In September, President Clinton pledged 100 percent debt relief for up to 40
poor countries, including Uganda and Nicaragua, at a cost of about $1
billion. Lawmakers on Wednesday went beyond that, adding Nigeria to the list
-- a move which could add about $90 million to the plan's cost.

The legislation has numerous hurdles before it becomes law. It requires
approvals from other committees before being voted on by lawmakers and also
needs appropriations approval.

The legislation will enable the broader Heavily Indebted Poor Countries
Initiative -- spearheaded by the International Monetary Fund and the World
Bank -- to proceed.

The HIPC plan, coupled with planned write-offs of debts to members of the
Paris Club group of major lenders, would cut the debts of 33 countries to $45
billion from $90 billion.

The plan is aimed at freeing up money in poor countries to spend on health,
education and poverty reduction and hopefully narrow the gap between rich and
poor countries.

Wednesday's approval also authorised the IMF's plan to revalue some of its
massive gold reserves to fund its HIPC obligation, effectively giving the
overall HIPC plan the U.S. blessing if the bill is passed into law.

As with many Congressional debates on matters related to the IMF, many
lawmakers used it as a vehicle to bash the international lending
organisation.

One amendment, defeated 12-22, sought to abolish the IMF within three years
and called on the U.S. Treasury to come up with alternatives to replace it
within two years.

Some on the influential committee characterised the IMF as ``the villain''
which had caused the debt crisis in the first place through its misguided
economic policies.

The distrust off all things IMF pervaded the debate but was best summed up by
Representative Maxine Waters, a long-time IMF opponent. The Democrat from
California asked the committee, ``Do we have to have the IMF involved at all?
Because, as we have painfully discovered, the way the IMF works causes
children to starve.''

Toward the end of the 10-hour debate, after numerous anti-IMF amendments were
defeated, Representative Bernard Sanders managed to throw a potential spanner
in the works.

The independent from Vermont secured an amendment aimed at diluting the IMF's
role in the HIPC debt-relief plan. The amendment urged the president to push
for a modified HIPC plan that would not subject poor countries to IMF
economic policies to qualify for debt relief.

But Committee Chairman Representative Jim Leach of Iowa told Reuters the
amendment was ``a red herring'' which was unlikely to find its way into the
final legislation.

The bill was passed by a vote of 23-16, with many of those voting against it
saying their only objection was to the Sanders amendment.

The approval met with support from charities which had helped craft the bill
behind the scenes.

``This was a strong bipartisan vote for debt relief,'' said Oxfam spokesman
Seth Amgott, adding that the biggest hurdle was to secure approval to
appropriate the necessary funds.

David Bryden of Jubilee 2000, a coalition pushing for deeper debt relief,
called the legislation ``a step in the right direction.''

22:41 11-03-99









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