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Washington--Expediting debt relief to the world's most heavily indebted nations and placing a greater emphasis on human development are among the goals advocated by two U.S. Bishops in comments submitted Monday to the World Bank and the International Monetary Fund.
"Our concern is with the human aspects of the debt problem -- its impact on the poor and vulnerable in a society," said Archbishop Theodore E. McCarrick of Newark (NJ) and Bishop John H. Ricard of Pensacola-Tallahassee. "We advocate criteria for evaluating debt sustainability that are based on human development."
The Chairman of the U.S. Catholic Conference International Policy Committee and the Chairman of Catholic Relief Services, respectively, made their comments in response to a request by the international financial institutions (IFIs) as they begin to review their Highly Indebted Poor Countries (HIPC) Initiative.
The two Bishops expressed concerns with the fiscal criteria currently used by the IFIs in determining a nation's ability to keep up with debt repayments. Rather than focusing primarily on economic indicators like export earnings, the Bishops urged the IFIs to look also at the impact of debt repayment on human development indicators such as health, education, and sanitation in highly indebted nations, as well as other expenditures necessary for sustainable development and poverty reduction.
Likewise, Archbishop McCarrick and Bishop Ricard said poverty alleviation must be central to any economic restructuring plans imposed upon poor countries by IFIs as a condition of debt relief. It is common for creditors to require that debtor nations restructure their economies -- by privatizing state-owned industry, for example -- in exchange for substantial debt relief.
"When structural adjustment and stabilization policies have the effect of worsening the condition of people already struggling to meet their basic human needs, or of reducing others to a similarly impoverished condition, ... then they are unacceptable," the two prelates said.
In addition, they argued that the current six-year observation period a debtor nation must ordinarily wait for relief under the HIPC Initiative is too long for many nations.
"For many poor countries, debt is a major obstacle to progress in poverty reduction, and we believe it is imperative to minimize the delay in lifting this burden from the backs of millions struggling to meet their basic human needs," Archbishop McCarrick and Bishop Ricard said. "In the most impoverished countries, a six-year delay before the full amount of debt relief is received means that a generation of children will not have access to the resources that could be directed to education or health care assistance in the most critical years of their lives."
In addition, the Bishops' comments urged the IFIs to initiate better channels of communications with groups and entities within countries targeted for relief.
"Locally based NGOs, which can give voice to the interests of the poor and disadvantaged, should have a direct participation in the development and implementation of debt relief programs," they said. "Such participation by civil society would greatly improve the effectiveness of the resources provided."
In their cover letter, the two Bishops called the HIPC program "a very important initiative" and pledged to support efforts to have the United States take a greater leadership role in funding an expanded HIPC. Coincidentally, President Clinton announced Tuesday that the United States would extend its commitment to provide more relief, more quickly to heavily indebted countries with strong reform programs. He called on the international community to pursue comprehensive debt relief and pledged to work the G7 nations to implement the initiatives.
"While we applaud the efforts of the World Bank and the IMF, we believe that it is highly opportune to reexamine the current framework at this time to see if it can be strengthened so as to bring substantial, timely debt relief to all heavily-indebted countries," said Archbishop McCarrick and Bishop Ricard. "We also believe that the concerns of the poor must be addressed centrally ...., and that the relief should be structured to assure that the benefits accrue to the poor."
NOTE: The full text of Archbishop McCarrick and Bishop Ricard's cover letter and comments can be found on the USCC Website at: www.nccbuscc.org/comm/archives/99-058a.shtml.