More Money for Debt Relief
New York Times- June 20, 2000
Last year the United States and other industrialized countries pledged to provide $27 billion to reduce the foreign debt of 36 of the world's poorest nations, if those countries adopt sound economic policies and use the savings for health, education and other basic needs. Debt relief has bipartisan supporters, including humanitarian aid groups and religious conservatives. Washington pledged to pay only 4 percent of the wealthy nations' total, or $920 million over four years, with most of the money up front.
But today in both the House and Senate, votes are scheduled that are likely to slash Washington's contribution to debt relief.
This imperils the whole project, as several other nations will meet their commitments only if Washington meets its own.
Debt relief is crucial because poor countries use up to 60 percent of their government budgets to service debt on loans taken out decades ago that will never be repaid.
The burden helps condemn these nations, which are mostly in Africa, to a cycle of poverty. In 1996 the World Bank and the International Monetary Fund began a limited program of debt relief that helped only four nations, but now the program is expanding. Wealthy nations have agreed to forgive their own debtors and chip in to cancel debt owed to regional banks like the African Development Bank. The Senate Foreign Relations Committee, led by Jesse Helms, authorized $600 million in debt relief for the next three years.
But Congress is now likely to approve far less. Alabama's Sonny Callahan, a Republican, has recommended that his House Appropriations Subcommittee on Foreign Operations approve only $69 million. The Senate meanwhile will vote on a foreign operations package that includes only $75 million for debt relief.
These votes would leave the United States looking foolish at the next meeting of industrialized nations in July, where Washington could find scant support for its own initiatives.
More important, countries that have sweated to meet all the criteria for debt relief are waiting.
Bolivia will lose $35 million this year because of the delay. Some in Congress are counting on a last-minute deal at the end of the fiscal year to restore the money. This is a gamble the world's poorest nations cannot afford.
Congress should restore the administration's full request. If it does not, Mr. Clinton should veto the foreign operations bill, which is likely to contain other objectionable provisions worthy of a veto.