REASON FOR THIS ALERT: Congress will soon consider the Multilateral Debt Relief Act of 2005, which represents an essential next step in alleviating the crushing burdens of debt that plague many developing countries. S. 1320 and its companion bill in the House, H.R. 3191, provide Congressional support for the recent G8 agreement on new debt cancellation and authorize the appropriation of the funds necessary to finance the U.S. share of its costs. The bills also encourage the Administration to go beyond the G8 agreement in important respects.
Please contact your Senators and Representatives and urge them to co-sponsor the Multilateral Debt Relief Act of 2005, S. 1320 in the Senate and H.R. 3191 in the House.
BACKGROUND: Debt payments continue to drain resources that poor countries desperately need for health care, food, education and social programs. The burden of debt also impedes governments abilities to respond to the HIV/AIDS crisis, droughts, civil strife and other emergencies.
An agreement recently announced by G8 leaders commits to canceling at least $40 billion of the debt owed by poor countries to the World Bank, the African Development Bank, and the International Monetary Fund. This new commitment, which is expected to be formally adopted in the next few months, would immediately benefit 18 developing nations classified as Heavily-Indebted Poor Countries (HIPCs) and eventually as many as 20 additional HIPCs.
This agreement represents a significant step in enabling poor countries to redirect their resources toward essential human needs, but much more must be done. Other developing countries should be included in the debt cancellation, and other multilateral creditors should forgive the debt owed to them. Furthermore, the G8 agreement cannot be implemented without U.S. support and funding to finance the debt cancellation.
The Multilateral Debt Relief Act of 2005 is important for three main reasons:
- It signals Congressional support and provides the authority for the funding necessary to implement the G8 debt cancellation. This in turn will reinforce the new global partnership launched at the G8 summit, offering the hope that countries can cooperate in eliminating the conditions that lead to suffering and despair.
- It authorizes greater debt relief than the G8 agreement by canceling debt owed to the Inter-American Development Bank, the largest creditor of heavily-indebted poor countries in Latin America and the Caribbean.
- It encourages the U.S. Treasury to work toward debt relief for the substantial number of countries that are not eligible under the G8 agreement but are nonetheless suffering debt burdens as great as, or greater than, those that are currently eligible. Fairness requires that these countries be made eligible for debt relief on the same basis without undue delay.
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 has long supported relieving the burdensome debts of low income countries. Catholic Relief Services (CRS), the aid and development agency of the U.S. Catholic Bishops, knows first hand the needs of the people living with the burden of crushing debts from its work among the poorest people of the earth in over 80 countries. Debt repayments should not come at the cost of basic human survival and dignity. The merits of deeper debt cancellation, when accompanied by conditions of accountability and transparency on the part of recipient countries, have been shown to generate much needed resources for health, education and poverty reduction for some of the worlds poorest people.
TAKE ACTION NOW! Please contact your Senators and Representatives and ask them to signal their support for reducing the crushing debt burdens by co-sponsoring S. 1320/H.R. 3191, the Multilateral Debt Relief Act of 2005.
OTHER WAYS YOU CAN HELP: Get involved in the Catholic Campaign Against Global Poverty www.usccb.org/globalpoverty, a joint effort by USCCB and CRS that encourages Catholics in the United States to learn about the issues of aid, trade and debt, how they affect our brothers and sisters worldwide, and what you can do to advocate for U.S. policies that promote economic and social development for people living in poverty.