I

107TH CONGRESS

1ST SESSION H. R. 1642

To urge reforms of the Enhanced Heavily Indebted Poor Countries (HIPC)

Initiative, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

APRIL 26, 2001

Ms. WATERS (for herself, Mr. BACHUS, Mrs. MALONEY of New York, Mr.

SANDERS, and Ms. LEE) introduced the following bill; which was referred

to the Committee on Financial Services

A BILL

To urge reforms of the Enhanced Heavily Indebted Poor

Countries (HIPC) Initiative, 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 ‘‘Debt Cancellation for

5 the New Millennium Act’’.

6 SEC. 2. FINDINGS.

7 The Congress finds the following:

8 (1) The Enhanced HIPC Initiative was devel9 oped by the countries of the G–7 during the G–7
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1 Summit meeting in Cologne, Germany, June 18–20,

2 1999.

3 (2) The purpose of the Enhanced HIPC Initia4 tive is to provide debt relief to the world’s poorest

5 countries and enable these countries to invest the

6 savings from debt relief in HIV/AIDS treatment and

7 prevention, health care, education, and poverty re8 duction programs.

9 (3) The Enhanced HIPC Initiative requires

10 heavily indebted poor countries (HIPCs) to develop

11 and implement plans known as Poverty Reduction

12 Strategy Papers (PRSPs) with the participation of

13 civil society for the purpose of reducing poverty.

14 (4) The Enhanced HIPC Initiative has yielded

15 some promising results in some HIPCs. For exam16 ple, Tanzania has eliminated school fees, Honduras

17 is offering 3 more years of free schooling for public

18 school students, and Uganda has significantly re19 duced the rate of HIV transmission.

20 (5) The Enhanced HIPC Initiative does not

21 provide full cancellation of the debts of HIPCs.

22 (6) The International Monetary Fund (IMF)

23 and the International Bank for Reconstruction and

24 Development (World Bank) have sufficient resources
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1 to provide full cancellation of the debts that HIPCs

2 owe to these institutions.

3 (7) The Enhanced HIPC Initiative requires

4 HIPCs to implement structural adjustment pro5 grams approved by the IMF, which impose economic

6 austerity upon these countries and are strongly op7 posed by civil society in many of the countries in

8 which the programs have been implemented.

9 (8) The process of developing and implementing

10 PRSPs has required considerable time and effort on

11 the part of officials and citizens in many HIPCs,

12 and, as a result, these countries have been unable to

13 begin to receive debt relief as quickly as had been

14 planned.

15 (9) The Enhanced HIPC Initiative requires

16 HIPCs to continue to make service payments on

17 their debts while they are developing and imple18 menting PRSPs, as well as while they are imple19 menting the IMF’s structural adjustment programs.

20 (10) By the end of the year 2000, only 22 out

21 of 41 HIPCs had begun to receive debt relief under

22 the Enhanced HIPC Initiative, and their debt serv23 ice payments have been reduced by an average of

24 only 27 percent. Furthermore, 16 of these 22 coun-
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1 tries are still spending more money on debt service

2 payments than they are on health care.

3 (11) Bangladesh, Haiti, and Nigeria were ex4 cluded from the Enhanced HIPC Initiative, although

5 they are impoverished countries with significant debt

6 burdens.

7 (12) The complete cancellation of the debts of

8 impoverished countries will remove a major impedi9 ment to poverty reduction and economic growth, en10 able these countries to invest their resources in HIV/

11 AIDS treatment and prevention, health care, edu12 cation, and poverty reduction, and give these coun13 tries a fresh start in the new millennium.

14 SEC. 3. REFORMS OF THE ENHANCED HIPC INITIATIVE.

15 Title XVI of the International Financial Institutions

16 Act (22 U.S.C. 262p–262p–7) is amended by adding at

17 the end the following:

18 ‘‘SEC. 1625. REFORMS OF THE ENHANCED HIPC INITIATIVE.

19 ‘‘Congress urges the President to commence imme20 diately efforts, within the Paris Club of Official Creditors,

21 as well as the International Bank for Reconstruction and

22 Development (World Bank), the International Monetary

23 Fund (IMF), and other appropriate multilateral develop24 ment institutions to accomplish the following modifica-
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1 tions in the Enhanced Heavily Indebted Poor Countries

2 (HIPC) Initiative:

3 ‘‘(1) FULL DEBT CANCELLATION.—The amount

4 of debt relief provided by the IMF and the World

5 Bank under the Enhanced HIPC Initiative for the

6 benefit of a HIPC shall be sufficient to completely

7 cancel 100 percent of the debts owed by the HIPC

8 to these institutions. Debt cancellation shall be pro9 vided by the IMF and the World Bank using their

10 own resources.

11 ‘‘(2) PROHIBITION ON STRUCTURAL ADJUST12 MENT PROGRAMS.—The provision of debt relief

13 under the Enhanced HIPC Initiative shall not be

14 conditioned on any country adopting or imple15 menting any structural adjustment or stabilization

16 program of the Poverty Reduction and Growth Fa17 cility of the IMF or any other structural adjustment

18 or stabilization program operated solely or jointly by

19 the IMF or the World Bank.

20 ‘‘(3) IMMEDIATE SUSPENSION OF DEBT SERV21 ICE PAYMENTS FOR COUNTRIES DEVELOPING

22 PRSPs.—All HIPCs that are working in good faith

23 to develop and implement their Poverty Reduction

24 Strategy Papers (PRSPs) pursuant to the Enhanced

25 HIPC Initiative shall not be required to make serv-
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1 ice payments on their debts. The PRSPs shall be de2 veloped and implemented with the participation of

3 civil society in order to ensure that the savings from

4 debt relief will be invested in HIV/AIDS treatment

5 and prevention, health care, education, and poverty

6 reduction programs.

7 ‘‘(4) COUNTRY ELIGIBILITY.—The eligibility re8 quirements of the Enhanced HIPC Initiative shall be

9 revised to make Bangladesh, Haiti, and Nigeria eli10 gible.’’.

11 SEC. 4. TECHNICAL ASSISTANCE.

12 The Secretary of the Treasury shall provide or other13 wise arrange for the provision of technical assistance upon

14 request to heavily indebted poor countries (within the

15 meaning of the Enhanced Heavily Indebted Poor Coun16 tries (HIPC) Initiative) regarding compliance with all con17 ditions for debt relief pursuant to the Enhanced HIPC

18 Initiative, including the development and implementation

19 of their Poverty Reduction Strategy Papers (PSRPs). The

20 Secretary of the Treasury shall inform all such countries

21 of the availability of the technical assistance within 30

22 days after the date of the enactment of this Act.

23 SEC. 5. REPORT TO THE CONGRESS.

24 Not later than December 31 of each year, the Presi25 dent shall submit to the Committees on Financial Serv-
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1 ices, on Appropriations, and on International Relations of

2 the House of Representatives and the Committees on For3 eign Relations, on Banking, Housing, and Urban Affairs,

4 and on Appropriations of the Senate a report, which shall

5 be made available to the public, on the activities under6 taken under this Act, and on the progress made in accom7 plishing the modifications to the Enhanced HIPC Initia8 tive called for in this Act, for the preceding fiscal year.

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