I

107TH CONGRESS

1ST SESSION H. R. 1567

To encourage the provision of multilateral debt cancellation for countries

eligible to be considered for assistance under the Heavily Indebted Poor

Countries (HIPC) Initiative or heavily affected by HIV/AIDS, and for

other purposes.

IN THE HOUSE OF REPRESENTATIVES

APRIL 24, 2001

Ms. LEE (for herself and Ms. WATERS) introduced the following bill; which

was referred to the Committee on Financial Services

A BILL

To encourage the provision of multilateral debt cancellation

for countries eligible to be considered for assistance

under the Heavily Indebted Poor Countries (HIPC) Initiative or heavily affected by HIV/AIDS, 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. FINDINGS.

4 The Congress finds the following:

5 (1) According to the United Nations, economic

6 and social factors contribute to the spread of HIV/
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1 AIDS, which now infects an average of 16,000 peo2 ple every day.

3 (2) Due to the debt crisis in the majority of im4 poverished countries, substantially more money is

5 spent on debt repayment each year than on HIV/

6 AIDS prevention and treatment programs.

7 (3) Structural adjustment programs in the de8 veloping world, in an attempt to enable the impover9 ished nations to repay their debt, have required gov10 ernments to impose failed and often harmful policies

11 including charging user fees for the use of medical

12 clinics. These user fees can create an obstacle to ef13 fective prevention and treatment programs.

14 (4) In Kenya, when user fees were imposed at

15 Nairobi’s Sexually Transmitted Disease clinics, at16 tendance decreased 35–60 percent.

17 (5) User fees have also been shown to decrease

18 the use of health clinics in Mozambique, the Congo,

19 Ghana, and Zimbabwe.

20 (6) Cuts in health clinic budgets, required by

21 structural adjustment programs, may also contribute

22 to the spread of HIV/AIDS.

23 (7) Structural adjustment programs have also

24 contributed to internal and international labor mi25 gration. Labor migration is associated with increase
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1 in HIV transmission rates in Senegal, Ghana,

2 Benin, Nigeria, and Kenya.

3 (8) The HIV/AIDS pandemic will result in tens

4 of millions of orphaned children worldwide, creating

5 an unprecedented strain on the world’s economic re6 sources and relief efforts.

7 (9) Secretary General of the United Nations,

8 Kofi Annan, stated in 1999 that ‘‘the impact of

9 AIDS is no less destructive than that of warfare

10 itself, and by some measures, far worse’’.

11 (10) Many of the same nations in Sub-Saharan

12 Africa which are crushed beneath the weight of for13 eign debt are experiencing catastrophic loss of life

14 and negative economic growth due largely to the

15 HIV/AIDS pandemic.

16 (11) The decision of the G–8 countries at the

17 Cologne Summit in 1999 to reduce by

18 $100,000,000,000 the debt of the countries listed by

19 the World Bank and the International Monetary

20 Fund (IMF) as Heavily Indebted Poor Countries

21 (HIPCs) (which combined owe approximately

22 $220,000,000,000 in debt) is a measure for which

23 only 22 have qualified. These countries have seen

24 their annual debt service reduced by an average of

25 26 percent, a level of reduction which is neither al-
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1 lowing these countries a sustainable exit from debt,

2 nor freeing up substantial resources to combat pov3 erty and the AIDS pandemic.

4 (12) Per capita government expenditure on

5 health care in most African countries is below $10,

6 and the per capita share of debt service to foreign

7 creditors is up to 5 times as high as public health

8 expenditure.

9 (13) The Congress enacted section 596 of the

10 Foreign Operations, Export Financing, and Related

11 Programs Appropriations Act, 2001. This dem12 onstrated the political commitment to eliminate user

13 fees for primary health care and education.

14 (14) A large-scale program of multilateral and

15 bilateral debt cancellation explicitly linked to HIV/

16 AIDS control would have minimal impact on creditor

17 country taxpayers and budgets.

18 (15) The active participation of all stakeholders

19 in the epidemic, in the process of negotiating debt

20 cancellation for HIV/AIDS prevention and care, is a

21 precondition for the implementation of effective pro22 grams.

23 (16) The United States has shown good faith

24 by providing $435,000,000 in fiscal year 2001 for

25 bilateral debt cancellation and multilateral debt re-
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1 duction. This action should encourage international

2 financial institutions to match the debt cancellation

3 efforts of the G–8 countries to ensure burden shar4 ing.

5 SEC. 2. MULTILATERAL DEBT CANCELLATION EFFORTS

6 FOR COUNTRIES ELIGIBLE TO BE CONSID7 ERED FOR ASSISTANCE UNDER THE HEAVILY

8 INDEBTED POOR COUNTRIES (HIPC) INITIA9 TIVE OR HEAVILY AFFECTED BY HIV/AIDS.

10 The Secretary of the Treasury shall instruct the

11 United States Executive Directors at the International

12 Bank for Reconstruction and Development and the Inter13 national Monetary Fund to use the voice, vote, and influ14 ence of the United States to call for a vote in their respec15 tive institutions on (and call for the publication of the out16 come of any such vote)—

17 (1) negotiating a strategy for cancelling the

18 debts owed to the institution by any country that is

19 eligible to be considered for assistance under the

20 Heavily Indebted Poor Countries (HIPC) Initiative

21 or is heavily affected by HIV/AIDS, which should

22 ensure that the savings from debt cancellation are

23 used for poverty reduction in a process that is fair

24 and transparent, and that includes the participation

25 of national governments, including parliamentary
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1 bodies, nongovernmental organizations, and civil so2 ciety;

3 (2) in the interim, accepting an immediate mor4 atorium on debt service payments and accrual of in5 terest on such debt owed by any such country;

6 (3) encouraging each such country and civil so7 ciety stakeholders to ensure that—

8 (A) the national HIV/AIDS strategic plan

9 is fully funded, and that a significant propor10 tion of the savings from debt cancellation is

11 used for the HIV/AIDS response and other

12 health priorities, as determined locally; and

13 (B) HIV/AIDS and infectious disease con14 trol strategies are based upon best practices, in15 cluding prevention, care, treatment, orphan re16 sponse, and accessibility to affordable drugs

17 and social and health infrastructure; and

18 (4) using the reserve accounts or net income of

19 the institution to offset the costs of any such debt

20 cancellation.

21 SEC. 3. OPPOSITION TO USER FEES FOR PRIMARY EDU22 CATION OR PRIMARY HEALTH CARE.

23 The Secretary of the Treasury shall instruct the

24 United States Executive Directors at at the International

25 Bank for Reconstruction and Development and the Inter-
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1 national Monetary Fund to oppose and vote against any

2 program of these institutions that would include user fees

3 or service charges for primary education or primary health

4 care, including prevention and treatment efforts for HIV/

5 AIDS, malaria, tuberculosis, and infant, child, and mater6 nal well-being.

7 SEC. 4. ANTICORRUPTION STRATEGIES.

8 The Secretary of the Treasury, in consultation with

9 appropriate governmental agencies, nongovernmental or10 ganizations, and civil society, shall develop strategies to

11 counter corruption in the countries described in section

12 2.

13 SEC. 5. REPORTS.

14 Not later than 1 year after the date of the enactment

15 of this Act, the Secretary of the Treasury shall submit

16 to the Committees on Financial Services and on Inter17 national Relations of the House of Representatives and

18 the Committees on Banking, Housing, and Urban Affairs

19 and on Foreign Relations of the Senate a written report

20 on all progress in debt cancellation efforts undertaken

21 pursuant to this Act and on the effects of the debt can22 cellation provided pursuant to this Act on funding for

23 HIV/AIDS programs, projects, activities (including any

24 vaccination approaches, health care delivery system infra25 structure development, HIV prevention education), and
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1 the effectiveness of such programs, projects, and activities

2 in reducing the worldwide spread of HIV/AIDS. The re3 port should include recommendations for measures to en4 sure accountability in the use of the savings from such

5 debt cancellation.

6 SEC. 6. DEFINITIONS.

7 In this Act:

8 (1) G–8 COUNTRIES.—The term ‘‘G–8 coun9 tries’’ means the group consisting of France, Ger10 many, Japan, the United Kingdom, the United

11 States, Canada, Italy, and Russia established to fa12 cilitate economic cooperation among the 8 major

13 economic powers.

14 (2) HEAVILY AFFECTED BY HIV/AIDS.—The

15 term ‘‘heavily affected by HIV/AIDS’’ means, with

16 respect to a country, that the country has an HIV/

17 AIDS incidence of at least 3 percent or the country

18 has declared a national health emergency related to

19 HIV/AIDS.

20 (3) HEAVILY INDEBTED POOR COUNTRIES

21 (HIPC) INITIATIVE.—The term ‘‘Heavily Indebted

22 Poor Countries (HIPC) Initiative’’ means countries

23 that are eligible for consideration for highly

24 concessional assistance from the International Devel25 opment Association, and from the Poverty Reduction
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1 and Growth Facility of the International Monetary

2 Fund.

3 (4) HIV/AIDS.—The term ‘‘HIV/AIDS’’ means

4 infection with the human immunodeficiency virus.

5 Such term includes the acquired immune deficiency

6 syndrome.

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