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We are delighted to report that we have achieved a major victory for millions of poor people in debt-ridden countries! We have come from nowhere nine months ago to getting a large part of what we all have been striving for over the past two years. Treasury officials told us that two weeks ago we were "dead in the water" on debt relief legislation for this year, yet it has happened.
The momentum which all of you, together with our friends in the Jubilee 2000 movement, built up over many months plus an all-out push in the last few weeks made the difference. The frenetic final days included phone calls and faxes to key Congressmen from individual bishops and state conferences, and a day on Capitol Hill with U-2 star Bono. (He joined a press Conference with Bishop Glynn, an Episcopalian bishop and Congressmen Bachus (R-AL) and LaFalce (D-NY), and then paid a series of visits to key Senators and Representatives.)
On Monday of this week, Archbishop McCarrick came out of the annual bishops' meeting to talk to Secretary of the Treasury Larry Summers. Breaks in the meeting were used by Bishop Fiorenza to make telephone calls to the two key congressional negotiators on debt relief, Sen Gram. (R-TX) and Rep. Armey (R-TX), and for +McCarrick, Fiorenza and Delaney to talk to the national and Texas press.
Secretary Summers met Tuesday with representatives of USCC, several other Christian churches, Bread for the World, Oxfam and Jubilee 2000 to inform us of the agreement with Congress. He said that he never expected that debt relief would survive as one of the 4 or 5 key Administration issues in final budget negotiations for FY2000 -- but it did! He said that he was "speaking for the President and his colleagues in saying how grateful we are to all of you. Your pressure was really decisive."
These words of appreciation belong to all of you! Your persistent efforts over the past year have paid off. Congratulations!
As to the specifics of the deal, the Congress will appropriate $110 million for US bilateral debt relief. It will also grant the approval necessary for IMF participation in the Cologne debt relief initiative-- revaluation of gold holdings and use of $300 million from a special IMF contingency account.
The Cologne Initiative when fully funded will provide debt relief potentially to about 39 countries and will bring total HIPC debt relief for these countries to about $90 billion.
Treasury officials advised that the legislation will also include some of the policy provisions of HR 1095. It will call for application of the savings from debt relief to poverty reduction, and for IMF and World Bank policy conditionality to be revised to make poverty reduction a primary objective. All decisions on debt relief conditions are to be subject to transparent and participatory processes. We have yet to see the precise language on these provisions, but the Treasury description suggests that the fundamental objective of seeing that debt relief benefits the poor is covered in the legislation.
What is missing from the agreement, primarily, is an appropriation for financing the participation of the regional development banks (Inter-American Development Bank, African Development Bank, etc.) in the Cologne Initiative. These institutions hold about 15% of the debt of the HIPC countries Without this appropriation, which will trigger similar appropriations from the other major creditor countries, implementation of the Cologne Initiative is likely to suffer delays.
Also the Congress did not agree to release all the IMF funds to be used for debt relief. It withheld approval of the use of 5/14ths of the income from gold sales, but agreed to consider the matter again by about May 1, 2000. Finally, the appropriation for bilateral debt relief will have to be supplemented by an additional appropriation next year.
We intend to renew our campaign early next near to assure that these final pieces of the Cologne Initiative are put into place, and to try also to go beyond Cologne and obtain more relief for more countries-- in other words to push for final passage of H.R. 1095 (which was passed by Committee but got no further in this session) and the necessary appropriations.
And we will be entering 2000 from a dramatically stronger position than we entered 1999. Here is what Rep. LaFalce, one of the original sponsors of H.R. 1095, says in a statement released today:
"While we should enjoy this victory, we must not lose sight of the fact that much more remains to be done.... I am fully committed to pressing the Congress to begin early next year to meet these needs and finish the good work we have started."
In the meantime, congratulations again for a very successful 1999 debt relief campaign!