REASON FOR THIS ALERT: We have an important opportunity to make major progress in relieving the debt of the poorest nations. Plans for debt relief for poor countries will be on the agenda as US Treasury Secretary John Snow and the Finance Ministers of the other major industrial countries, also known as the G-7, meet on June 10. This meeting will be in preparation for the July 6- 8 Heads of State meeting of the G-8, (which includes the G-7 countries plus Russia). As Catholics long concerned with this issue, this is our chance to urge our leaders to do more to help the worlds poorest people.
Contact Secretary John Snow on June 2, 2005 and urge him to press for an agreement on major new debt cancellation for the poorest countries at the June meeting of the G-7.
BACKGROUND: Pressure has been mounting for deeper debt relief for poor countries, recognizing that the current debt reduction program has been insufficient. Any cancellation of the debt owed to the World Bank and other international financial institutions (the so-called IFIs) requires the agreement of the governments of the G-7, which includes the US, United Kingdom, Canada, Germany, France, Italy and Japan. The UK is anxious to reach a deal at the meeting of G-8 leaders that it will host in Scotland this July. A critical step in this process is the Finance Ministers meeting in June.
The US and the UK have put forward proposals on debt relief that are similar in that both embrace the principle of 100 percent cancellation of debts owed to the World Bank and African Development Bank. However, some key differences remain. The US wants to limit further debt relief to those countries previously defined as heavily indebted under the Heavily-Indebted Poor Countries (HIPC) initiative. The UK proposal would include non-HIPC countries and would also cancel debts owed to the IMF. The US has backed away from canceling the debt of the IMF, in part because of disagreements about how it would be financed.
The UK (along with other G-7 members) is pushing for an increase in development aid to accompany IFI debt cancellation; however, the US points to recent increases in US foreign aid, most notably for combating HIV/AIDS. The US opposition so far to new financing may be the major sticking point
USCCB and CRS POSITION:
Based on our respect for the life and dignity of every person and the Churchs call for justice and equity in relationships between rich and poor countries, USCCB and CRS have long supported relieving the burdensome debts of low income countries.
Because IFI debt cancellation would free up major new resources for investments in health, education and poverty reduction in some of the worlds poorest countries, we strongly support a new debt relief agreement that would provide 100 percent cancellation of debts owed by Heavily Indebted Poor Countries to the major IFIs, including the International Monetary Fund.
Fairness dictates that other, non-HIPC very poor countries should also be included in any new agreement. Finally, we urge the Administration to join the UK and other G-7 members in offering new financing in order to secure a deal on 100 percent IFI debt cancellation.
(For additional information, see www.usccb.org/sdwp/international/aa0904.shtml.)
TAKE ACTION ON JUNE 2! USCCB and CRS, are asking Catholics to join with the Jubilee USA Network and others to contact US Treasury Secretary John Snow on June 2 and urge him to do the following at the June 10 meeting of G-7 Finance Ministers:
- Push for an agreement on 100 percent cancellation of poor country debts owed to international financial institutions.
- Offer new funding to demonstrate US commitment and to help secure a debt deal.
- Include the debt of the International Monetary Fund, using the IMFs own resources to pay for it.
- Ensure fairness to all of the poorest countries by including non-HIPC poor countries struggling with heavy debt burdens.
- Make sure that any debt relief goes to help the poorest people in the countries involved.
OR visit the CRS website, www.crs.org/actioncenter.cfm to send Secretary Snow a message on June 2.
For more information contact: Tina Rodousakis, Legislative Network Specialist, CRS, 1-800-235-2772 x 7462, firstname.lastname@example.org; Gerry Flood, USCCB, 202 541 3167, email@example.com; Fr. Andrew Small, OMI, USCCB, 202-541-3153, firstname.lastname@example.org; Kathy Selvaggio, CRS, 1-800-235-2772 x 7449, email@example.com.