Lesotho, Bangladesh and Kenya. Debt relief would allow them to achieve progress towards meeting the MDGs despite the challenges posed by the economic crisis.
Congressional support for debt relief was demonstrated most recently by the overwhelming bipartisan support for the cancellation of Haiti’s debts following the devastating earthquake in January. As a result, your administration and Congress worked together to achieve complete cancellation of $828 million of Haiti’s remaining debts.
Congress is on record in support of expanding debt relief to all IDA-only countries. In the 110th Congress, the Jubilee Act for Responsible Lending and Expanded Debt Cancellation, which expanded eligibility for debt relief to all IDA-only countries, passed the House of Representatives with a two-thirds majority. The same year, the Jubilee Act passed the Senate Foreign Relations Committee with cosponsorship from 26 Senators, including then-Senators Joseph Biden and Hillary Clinton as well as yourself. The Jubilee Act has been reintroduced in the current Congress with a strong bipartisan group of original cosponsors, and continues to gain support.
We urge your administration to seek an international agreement for expanded debt cancellation, and we stand ready to work with you to implement expanded debt cancellation once such an international agreement is reached.
2) Use the voice, vote and influence of the United States at the World Bank, the IMF, and other international financial institutions to end the imposition of harmful and counterproductive conditionalities and policies. Under sustained pressure from civil society and some governments, these institutions have relaxed many of the rigid conditionalities of the past. However, counter-cyclical conditionalities that reduce spending on social services continue to be attached to loans and included in debt relief programs even during the economic crisis, and countries are being pushed to reduce stimulus spending too quickly.
It is especially critical in a time of economic crisis that the United States works to ensure that conditionalities on loans and debt relief focus on transparent policy-making procedures, good governance, and effective anticorruption measures and do not require governments to implement economic policies that harm the poor.
3) Promote responsible international lending and borrowing. In the past, many countries accumulated unsustainable debt through irresponsible lending and borrowing. Changing this pattern of irresponsible lending and borrowing will promote improved local governance and ensure greater transparency and attention to human rights. Specifically, we urge your administration to support the United Nations Conference on Trade and Development (UNCTAD)’s efforts to establish a set of guidelines for responsible lending and borrowing. We also urge your administration to support efforts to curb the irresponsible actions of so-called “vulture funds” that seek to profiteer from poor country debt by buying defaulted debt at a steep discount and then litigating aggressively to collect the full amount of the debt plus interest.
The upcoming Summit on the Millennium Development Goals is an important opportunity for the United States to exercise global leadership to help impoverished countries alleviate the impact of the global economic crisis and ensure that the MDGs are achieved by 2015. Debt relief