Congress Makes Major Strides Relieving Poor Country Debt

Bread for the World
Wednesday, 17 November 1999

Last night, congressional leaders agreed to move forward on debt relief for the world's poorest countries. This agreement is a major step. It allows the international plan developed at the G-7 Summit in June to proceed. It will provide real relief for many countries who struggle under a crushing debt burden.

In November 1998, debt relief was barely on the radar screen of Congress and the administration. A year later, Congress and the administration are engaged in a conversation on how best to make debt relief work. The Jubilee 2000 Coalition deserves major credit for this startling turnaround.

We are grateful that President Clinton made debt relief a major issue in negotiations with congressional leaders. Members of Congress from both parties also helped get attention to the issue.

The agreement appropriates $123 million in relief of debts owed to the U.S. government. This is less than one third of the $370 million requested this year by the administration, but it will allow the U.S. Treasury to write off most poor-country debts owed to the United States.

Unfortunately, Congress did not provide sufficient funding to fully realize the international plan. However, Congress is also allowing the International Monetary Fund (IMF) to use some of its own resources, mainly a small fraction of its gold reserves, to free up $2.3 billion for international debt relief. The agreement also includes IMF reform measures, and Congress will revisit progress on IMF reforms next year.

Much needs to be done next year to build on yesterday's agreement. We will continue to lobby Congress for increased resources and to ensure that debt relief is targeted to meeting basic needs in poor countries. We will continue to work until children no longer have to forego schooling or medicine because their governments' resources are directed towards servicing an unjust debt.

For more information, or to contact Bread for the World, see their website at: www.bread.org