More than 2 billion people inhabit the 39 developing countries that are heavily indebted to other nations. These heavily indebted poor countries (HIPC) pay about $3 billion each year to service their debt, some of which was acquired during the Cold War by corrupt regimes. These debt payments greatly reduce the availability of funding for urgent human services needed by the people of these countries. Beginning in 1996, industrialized donor countries began cancelling some of this debt through programs such as HIPC Initiative. To qualify, countries must face an unsustainable debt burden which cannot be managed with traditional means. About 36 of the 39 HIPC nations are in this program. However, this assistance is conditional on the governments of these countries meeting a range of economic management and performance targets. Critics claim these conditions often undermine poverty-reduction efforts by imposing significant financial burdens on their populations. For example, privatizing utilities tend to raise the cost of services beyond the ability of many citizens to pay. Critics claim the HIPC Initiative is a program designed by creditors to protect creditor interests, leaving countries with unsustainable debt burdens even after intervention. They say the International Monetary Fund and the International Bank for Reconstruction and Development (World Bank) have sufficient resources to easily cancel the debts owed to these institutions by heavily indebted poor countries.
Pending Legislation: None
I oppose reforming current HIPC debt relief policy
I support modifying in the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative, including requiring that: the amount of debt relief provided by the IMF and the World Bank under the Enhanced HIPC Initiative for a HIPC be sufficient to completely cancel 100% of the HIPC’s debt owed to such institutions; no provision of debt relief under the Initiative be conditioned on any country’s implementing a structural adjustment or stabilization program of the Poverty Reduction and Growth Facility of the IMF or any other such program operated solely or jointly by the IMF or the World Bank; all HIPCs that are working in good faith to develop and implement their Poverty Reduction Strategy Papers (PRSPs) pursuant to the Initiative not be required to make service payments on their debts, and wish to identify a legislator who will reintroduce H.R.643 – Debt Cancellation for the New Millennium Act (108th Congress, 2003-2004)