I

106TH CONGRESS

2D SESSION H. R. 5085

To reduce the long-term lending activities of the IMF and its role in

developing countries, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JULY 27, 2000

Mr. SANDERS (for himself, Mr. CAMPBELL, Mr. DEFAZIO, and Mr.

KUCINICH) introduced the following bill; which was referred to the Committee on Banking and Financial Services

A BILL

To reduce the long-term lending activities of the IMF and

its role in developing countries, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘IMF Reform Act of

5 2000’’.

6 SEC. 2. FINDINGS.

7 The Congress finds that—

8 (1) the International Monetary Fund (IMF)

9 was conceived at Bretton Woods, New Hampshire,

10 to promote a stable international financial system;
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1 (2) in the last 2 decades, the IMF has taken on

2 the role of lending to governments which cannot pay

3 their international debts, managing negotiations over

4 international debt repayments and access to credit

5 markets, and imposing and encouraging ‘‘structural

6 adjustment’’ policies in developing countries;

7 (3) structural adjustment policies have in many

8 cases led to economic instability, increased poverty

9 and inequality, the destruction of productive enter10 prises, and environmental degradation, while failing

11 to reduce debt burdens;

12 (4) the policies of the IMF in lending to and

13 managing the international debts of developing coun14 tries have often ignored the human rights and basic

15 needs of the majority of people in developing coun16 tries, and have allowed repressive regimes to borrow

17 money without popular consent, with the burden of

18 repayment left to the people;

19 (5) the international financial institutions have

20 sometimes encouraged developing countries to bor21 row money for policies and projects later acknowl22 edged by such institutions to have failed economi23 cally;

24 (6) the international financial institutions have

25 often lent money to corrupt regimes, which misspent
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1 or misappropriated the money, which then had to be

2 paid back by the population; and

3 (7) in managing the issue of the international

4 debt, the IMF has not adequately responded to con5 cerns about the morality of forcing developing coun6 tries to repay unjust debts, and indeed has ignored

7 the human toll that servicing these debts has caused,

8 and so another mechanism is needed for addressing

9 these issues.

10 SEC. 3. ACTIONS TO REDUCE LONG-TERM LENDING BY THE

11 IMF.

12 (a) REDUCTION OF LONG-TERM LENDING BY THE

13 IMF.—Title XVI of the International Financial Institu14 tions Act (22 U.S.C. 262p–262p–7) is amended by adding

15 at the end the following:

16 ‘‘SEC. 1625. CANCELLATION OF DEBT OWED TO THE IMF BY

17 ELIGIBLE POOR COUNTRIES.

18 ‘‘(a) IN GENERAL.—

19 ‘‘(1) CANCELLATION OF DEBT.—In order to

20 achieve multilateral debt cancellation and promote

21 human and economic development and poverty alle22 viation in eligible poor countries the Congress urges

23 the President to commence immediate efforts, within

24 the Paris Club of Official Creditors, the Inter25 national Monetary Fund (IMF), and other appro-
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1 priate multilateral development institutions to ac2 complish the following:

3 ‘‘(A) The IMF shall cancel all debts owed

4 to the IMF by eligible poor countries, the can5 cellation of which can be financed from ongoing

6 operations, procedures, and accounts of the

7 IMF established as of the end of the most re8 cent fiscal year, including the Poverty Reduc9 tion and Growth Facility (formerly known as

10 the ‘Enhanced Structural Adjustment Facility’

11 or ‘ESAF’).

12 ‘‘(B) Any waiting period before receiving

13 debt cancellation shall not exceed 4 months

14 from the date of an eligible poor country’s ap15 plication for debt cancellation.

16 ‘‘(C) The government of each eligible poor

17 country shall be encouraged to allocate 20 per18 cent of its national budget, including the sav19 ings from the cancellation of debt owed by the

20 country to the IMF, for the provision of basic

21 health care services, education services, and

22 clean water services to individuals in each coun23 try as provided for in the international 20/20

24 Initiative. In providing such services, the gov-
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1 ernment should seek input from appropriate

2 members of civil society.

3 ‘‘(2) PROHIBITIONS ON CERTAIN NEW LENDING

4 PRACTICES.—In order to ensure lasting reduction of

5 long-term lending by the IMF, the Congress urges

6 the President to commence immediate efforts, within

7 the Paris Club of Official Creditors, the IMF, and

8 other appropriate multilateral development institu9 tions to accomplish the following:

10 ‘‘(A) PROHIBITION OF NEW CONCESSIONAL

11 LOANS.—The IMF shall not issue any new

12 concessional loans, guarantees, insurance, or

13 credits to any country which receives cancella14 tion of debt under this section, within 3 years

15 after the date on which the country receives

16 such cancellation.

17 ‘‘(B) PROHIBITION OF PRIVILEGE FOR IMF

18 CREDIT.—The IMF shall not require or allow

19 any country receiving new concessional loans to

20 privilege the IMF as a creditor over the United

21 States or private creditors.

22 ‘‘(3) REPORT FROM THE COMPTROLLER GEN23 ERAL.—Within 90 days after the date of the enact24 ment of this section, the Comptroller General of the

25 United States shall prepare and submit to the Com-
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1 mittee on Banking and Financial Services of the

2 House of Representatives and the Committee on

3 Banking, Housing, and Urban Affairs of the Senate

4 a report on the availability of the ongoing oper5 ations, procedures, and accounts of the IMF for can6 celing the debt of eligible poor countries.

7 ‘‘(4) REPORT FROM THE PRESIDENT.—Not

8 later than December 31 of each year, the President

9 shall submit to the Committees on Banking and Fi10 nancial Services, and on International Relations of

11 the House of Representatives and the Committees

12 on Foreign Relations and on Banking, Housing, and

13 Urban Affairs of the Senate a report, which shall be

14 made available to the public, on the activities under15 taken under this section, and other progress made in

16 accomplishing the purposes of this section, for the

17 prior fiscal year. The report shall include a list of

18 the countries that have received debt cancellation, a

19 list of the countries whose request for such debt can20 cellation has been denied and the reasons therefore,

21 and a list of the countries whose requests for such

22 debt cancellation are under consideration.’’.

23 (b) PROMOTION OF EQUITABLE BURDEN SHAR24 ING.—In order to promote equitable burden-sharing by bi25 lateral, multilateral, and private creditors, the Congress
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1 urges the President to commence immediately efforts to

2 ensure that such creditors draw upon their own resources

3 to finance debt reduction to the extent possible without

4 diverting funds from other high priority poverty alleviation

5 programs.

6 SEC. 4. ACTIONS TO PROTECT ELIGIBLE POOR COUNTRIES

7 FROM HARMFUL IMF AND WORLD BANK

8 POLICIES.

9 Title XVI of the International Financial Institutions

10 Act (22 U.S.C. 262p–262p–7) is further amended by add11 ing at the end the following:

12 ‘‘SEC. 1626. PROTECTION AGAINST HARMFUL IMF AND

13 WORLD BANK POLICIES.

14 ‘‘(a) IN GENERAL.—In order to protect against

15 harmful International Monetary Fund (IMF) and Inter16 national Bank for Reconstruction and Development

17 (World Bank) policies in eligible poor countries the Con18 gress urges the President to commence immediate efforts,

19 within the Paris Club of Official Creditors, as well as the

20 World Bank, the IMF, and other appropriate multilateral

21 development institutions to accomplish the following:

22 ‘‘(1) The IMF and the World Bank shall not

23 impose, encourage, approve of, or endorse any gov24 ernment policy which has the intention or effect of

25 reducing access to basic social services, including
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1 health, education, nutrition, clean water, and sanita2 tion.

3 ‘‘(2) The IMF and the World Bank shall not

4 impose, encourage, approve of, or endorse any gov5 ernment policy which has the intention or effect of

6 undermining the ability of workers to exercise their

7 internationally recognized worker rights. For pur8 poses of this section, the term ‘internationally recog9 nized worker rights’ has the meaning given that

10 term in section 502(a)(4) of the Trade Act of 1974.

11 ‘‘(3) The IMF and the World Bank shall not

12 impose, encourage, approve of, or endorse any gov13 ernment policy which has the intention or effect of

14 damaging local small-scale enterprises and farms.

15 ‘‘(4) The IMF and the World Bank shall not

16 impose, encourage, approve of, or endorse any gov17 ernment policy which has the intention or effect of

18 degrading the environment.

19 ‘‘(5) The IMF and the World Bank shall not

20 impose, encourage, approve of, or endorse any gov21 ernment policy which has the intention or effect of

22 undermining democracy, including free and fair elec23 tions; civilian control of military, law enforcement

24 and security forces; the rule of law, equality before

25 the law and respect for individual and minority
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1 rights; and freedom of speech, publication, and asso2 ciation.

3 ‘‘(b) REPORT TO THE CONGRESS.—Not later than

4 December 31 of each year, the President shall submit to

5 the Committees on Banking and Financial Services and

6 on International Relations of the House of Representa7 tives and the Committees on Foreign Relations and on

8 Banking, Housing, and Urban Affairs of the Senate a re9 port, which shall be made available to the public, on the

10 activities undertaken under this section, and other

11 progress made in accomplishing the purposes of this sec12 tion, for the prior fiscal year.’’.

13 SEC. 5. PROHIBITION OF STRUCTURAL ADJUSTMENT PRO14 GRAMS.

15 (a) PROHIBITION OF STRUCTURAL ADJUSTMENT

16 CONDITIONS.—In order to promote human and economic

17 development and poverty alleviation in eligible countries

18 the Congress urges the President to commence immediate

19 efforts, within the Paris Club of Official Creditors, as well

20 as the International Bank for Reconstruction and Devel21 opment (World Bank), the International Monetary Fund

22 (IMF), and other appropriate multilateral development in23 stitutions to accomplish the following: The provision of

24 debt cancellation to poor countries shall not be conditioned

25 on any country adopting or implementing any structural
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1 adjustment program. In this section, the term ‘‘structural

2 adjustment program’’ means any structural adjustment

3 program of the Enhanced Structural Adjustment Facility

4 (ESAF) or its successors, any structural adjustment pro5 gram operated or overseen by the IMF or the World Bank,

6 or any other program of the IMF.

7 (b) REPORT TO THE CONGRESS.—Not later than De8 cember 31 of each year, the President shall submit to the

9 Committees on Banking and Financial Services and on

10 International Relations of the House of Representatives

11 and the Committees on Foreign Relations and on Bank12 ing, Housing, and Urban Affairs of the Senate a report,

13 which shall be made available to the public, on the activi14 ties undertaken under this section, and other progress

15 made in accomplishing the purposes of this section, for

16 the prior fiscal year.

17 SEC. 6. ELIGIBLE POOR COUNTRIES.

18 In this Act, the term ‘‘eligible poor countries’’ means

19 any poor country which has a functioning democratic gov20 ernment and which is among the entities identified by Ju21 bilee 2000 UK as needing significant debt cancellation, in22 cluding Angola, Benin, Bolivia, Burkina Faso, Burundi,

23 Cameroon, Central African Republic, Chad, Democratic

24 Republic of Congo, Republic of Congo, Cote d’Ivoire,

25 Equatorial Guinea, Ethiopia, Ghana, Guinea, Guniea-
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1 Bissau, Guyana, Honduras, Kenya, Lao PDR, Liberia,

2 Madagascar, Malawi, Mauritania, Mozambique, Nica3 ragua, Niger, Rwanda, Sao Tome and Principe, Senegal,

4 Sierra Leone, Tanzania, Togo, Uganda, Vietnam, Yemen,

5 Zambia, Bangladesh, Cambodia, Gambia, Haiti, Jamaica,

6 Morocco, Nepal, Nigeria, Peru, Philippines, and

7 Zimbabwe.

8 SEC. 7. ADVISORY COMMISSION; INTERNATIONAL DEBT

9 CONFERENCE.

10 (a) ADVISORY COMMISSION.—

11 (1) ESTABLISHMENT.—The Secretary of the

12 Treasury shall establish an International Debt Advi13 sory Commission (in this section referred to as the

14 ‘‘Commission’’).

15 (2) DUTIES.—The Commission shall—

16 (A) conduct a study of—

17 (i) the debts owed to the international

18 financial institutions (as defined in section

19 1701(c)(2) of the International Financial

20 Institutions Act), the servicing of which

21 prevents the governments of developing

22 countries from providing that their citizens

23 have access to basic education and health

24 care;
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1 (ii) the debts owed to the inter2 national financial institutions as a result of

3 lending for projects or policies now ac4 knowledged by the international financial

5 institutions to be economic failures;

6 (iii) the ecological damage that has re7 sulted from lending to developing countries

8 by international financial institutions; and

9 (iv) excess mortality and morbidity in

10 developing countries since 1982 as a result

11 of the implementation of ‘‘structural ad12 justment’’ policies designed by the inter13 national financial institutions; and

14 (B) make recommendations concerning

15 how the debt crisis may be definitively resolved

16 and such crises be averted in the future, which

17 recommendations may include proposals to re18 move the international financial institutions

19 from their central role in managing inter20 national debt, and to institute mechanisms in

21 debtor and creditor countries to deter the accu22 mulation of unsustainable debt.

23 (3) MEMBERSHIP.—

24 (A) IN GENERAL.—The Commission shall

25 be composed of 12 members, as follows:
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1 (i) 3 members appointed by the

2 Speaker of the House of Representatives.

3 (ii) 3 members appointed by the ma4 jority leader of the Senate.

5 (iii) 3 members appointed by the mi6 nority leader of the House of Representa7 tives.

8 (iv) 3 members appointed by the mi9 nority leader of the Senate.

10 (B) DEADLINE FOR APPOINTMENTS.—All

11 appointments to the Commission shall be made

12 not later than 45 days after the date of the en13 actment of this Act.

14 (C) TERM OF OFFICE.—Members of the

15 Commission shall be appointed for the life of

16 the Commission.

17 (D) VACANCIES.—Any vacancy in the

18 Commission shall be filled in the same manner

19 as the original appointment was made.

20 (E) NO PAY.—Members of the Commission

21 shall serve without pay.

22 (F) TRAVEL EXPENSES.—Members of the

23 Commission shall receive travel expenses, in24 cluding per diem in lieu of subsistence, in ac-
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1 cordance with sections 5702 and 5703 of title

2 5, United States Code.

3 (G) CHAIRMAN.—The majority leader of

4 the Senate, after consultation with the Speaker

5 of the House of Representatives and the minor6 ity leaders of the House of Representatives and

7 the Senate, shall designate 1 member of the

8 Commission to serve as Chairman of the Com9 mission.

10 (4) STAFF.—

11 (A) IN GENERAL.—The Commission may

12 appoint and fix the pay of additional personnel

13 as the Commission considers appropriate.

14 (B) EXPERTS AND CONSULTANTS.—The

15 Commission may procure temporary and inter16 mittent services under section 3109(b) of title

17 5, United States Code.

18 (5) POWERS.—

19 (A) HEARINGS AND SESSIONS.—The Com20 mission may, for the purpose of carrying out

21 this subsection, hold hearings, sit and act at

22 times and places, take testimony, and receive

23 evidence as the Commission considers appro24 priate. The Commission may administer oaths

25 or affirmations to witnesses appearing before it.
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1 (B) POWERS OF MEMBERS AND AGENTS.—

2 Any member or agent of the Commission may,

3 if authorized by the Commission, take any ac4 tion which the Commission is authorized to take

5 by this subsection.

6 (C) MAILS.—The Commission may use the

7 United States mails in the same manner and

8 under the same conditions as other departments

9 and agencies of the United States.

10 (D) OBTAINING OFFICIAL INFORMATION.—

11 The Commission may secure directly informa12 tion that the Commission considers necessary to

13 enable the Commission to carry out its respon14 sibilities under this Act. Upon request of the

15 Chairperson of the Commission, the head of

16 that department or agency shall furnish that in17 formation to the Commission.

18 (E) ADMINISTRATIVE SUPPORT SERV19 ICES.—Upon the request of the Commission,

20 the Administrator of General Services shall pro21 vide to the Commission, on a reimbursable

22 basis, the administrative support services nec23 essary for the Commission to carry out its re24 sponsibilities under this Act.
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1 (6) REPORT.—Within 180 days after the date

2 of the enactment of this Act, the Commission shall

3 submit to the Committees on Banking and Financial

4 Services and on International Relations of the House

5 of Representatives and the Committees on Foreign

6 Relations and on Banking, Housing, and Urban Af7 fairs of the Senate a written report on—

8 (A) whether the International Monetary

9 Fund (IMF) has canceled the debts owed to it

10 by the eligible poor countries;

11 (B) whether new IMF lending to such

12 countries has ceased; and

13 (C) the role, if any, the IMF is playing in

14 these countries.

15 (7) TERMINATION.—The Commission shall ter16 minate 6 months after the first meeting of the Com17 mission, which shall be not later than 30 days after

18 the appointment of all members of the Commission.

19 (b) INTERNATIONAL DEBT CONFERENCE.—Not later

20 than 180 days after the Commission submits the report

21 required by subsection (a)(6), the President of the United

22 States shall call for a conference of representatives of the

23 governments of the member countries of the IMF and the

24 International Bank for Reconstruction and Development

25 (World Bank) to consider and enact proposals for resolu-
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1 tion of the international debt crisis, and to consider and

2 enact proposals to prevent recurrence of international debt

3 crises, including such recommendations as are proposed

4 by the Commission pursuant to subsection (a).

5 SEC. 8. CONDITIONAL BAN ON PROVIDING FUNDS TO THE

6 IMF.

7 (a) IN GENERAL.—None of the funds appropriated

8 in any Act may be obligated or made available to the

9 International Monetary Fund (IMF) unless—

10 (1) the IMF has cancelled all debts owed to it

11 by eligible poor countries as described in the amend12 ment made by section 3 of this Act;

13 (2) the IMF has taken actions to protect eligi14 ble poor countries against harmful IMF policies as

15 described in the amendment made by section 4 of

16 this Act;

17 (3) the IMF has terminated its involvement in

18 the Enhanced Structural Adjustment Facility and

19 its successors and has ceased to condition debt relief

20 on implementation of structural adjustment pro21 grams as described in section 5 of this Act; and

22 (4) the Secretary of the Treasury has certified

23 to the Congress that the conditions referred to in

24 paragraphs (1), (2), and (3) have been met.
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1 (b) LIMITATION.—Subsection (a) shall not apply to

2 any funds appropriated to provide debt relief to poor coun3 tries.

4 SEC. 9. PROHIBITION ON CERTAIN ACTIONS BY UNITED

5 STATES GOVERNMENT OFFICIALS RELATING

6 TO ELIGIBILITY FOR UNITED STATES BILAT7 ERAL ASSISTANCE OR LOAN PROGRAMS.

8 Notwithstanding any other provision of law, no offi9 cer or employee of the United States Government may re10 quire, as a condition of eligibility of a country for United

11 States bilateral assistance or loan programs, that—

12 (1)(A) the country have an agreement with the

13 International Monetary Fund (IMF) or the Inter14 national Bank for Reconstruction and Development

15 (World Bank); or

16 (B) in the judgment of IMF or World Bank of17 ficials, the country have adhered to past agreements

18 with the IMF or World Bank; or

19 (2) the country have adopted a particular eco20 nomic policy, unless this requirement has been spe21 cifically approved by the Congress.

22 SEC. 10. DELINKING WORLD BANK CONDITIONS FROM IMF

23 CONDITIONS.

24 (a) POSITION OF THE UNITED STATES.—The Sec25 retary of the Treasury shall instruct the United States Ex-
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1 ecutive Director at the International Bank for Reconstruc2 tion and Development (World Bank) to vote to oppose the

3 linkage of World Bank loans to policy conditions designed

4 by the International Monetary Fund, and to use the voice

5 and influence of the United States to urge the other execu6 tive directors at the World Bank from other countries to

7 oppose such linkage.

8 (b) CONDITIONAL BAN ON PROVIDING FUNDS TO

9 THE WORLD BANK.—None of the funds appropriated in

10 any Act enacted after the enactment of this Act, including

11 appropriations for callable capital, may be obligated or

12 made available to the World Bank unless the World Bank

13 has ceased conditioning its loans on whether a country has

14 an agreement with the International Monetary Fund

15 (IMF), or whether in the judgment of IMF officials such

16 country has adhered to an agreement with the IMF. The

17 preceding sentence shall not apply to any funds appro18 priated to provide debt relief to poor countries, or to pro19 vide resources for the International Development Associa20 tion.

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