I 

108TH CONGRESS 

1ST SESSION H. R. 643

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

Initiative, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 6, 2003

Ms. WATERS (for herself, Mr. LEACH, Mr. FRANK of Massachusetts, 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 does not 

15 provide full cancellation of the debts of HIPCs. 

16 (5) The International Monetary Fund (IMF) 

17 and the International Bank for Reconstruction and 

18 Development (World Bank) have sufficient resources 

19 to provide full cancellation of the debts that HIPCs 

20 owe to these institutions. 

21 (6) The Enhanced HIPC Initiative requires 

22 HIPCs to implement structural adjustment pro23 grams approved by the IMF, which impose economic 

24 austerity upon these countries and are strongly op-
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1 posed by civil society in many of the countries in 

2 which the programs have been implemented. 

3 (7) The process of developing and implementing 

4 PRSPs has required considerable time and effort on 

5 the part of officials and citizens in many HIPCs, 

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

7 begin to receive debt relief as quickly as had been 

8 planned. 

9 (8) The Enhanced HIPC Initiative requires 

10 HIPCs to continue to make service payments on 

11 their debts while they are developing and imple12 menting PRSPs, as well as while they are imple13 menting the IMF’s structural adjustment programs. 

14 (9) Many HIPCs have experienced revenue 

15 losses as a result of reductions in prices for export 

16 commodities. These revenue losses have reduced sig17 nificantly the benefits of debt relief. 

18 (10) Bangladesh, Haiti, and Nigeria were ex19 cluded from the Enhanced HIPC Initiative, although 

20 they are impoverished countries with significant debt 

21 burdens. 

22 (11) The complete cancellation of the debts of 

23 impoverished countries will remove a major impedi24 ment to poverty reduction and economic growth, en25 able these countries to invest their resources in HIV/
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1 AIDS treatment and prevention, health care, edu2 cation, and poverty reduction, and give these coun3 tries a fresh start in the new millennium. 

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

5 Title XVI of the International Financial Institutions 

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

7 the end the following: 

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

9 ‘‘Congress urges the President to commence imme10 diately efforts, within the Paris Club of Official Creditors, 

11 as well as the International Bank for Reconstruction and 

12 Development (World Bank), the International Monetary 

13 Fund (IMF), and other appropriate multilateral develop14 ment institutions to accomplish the following modifica15 tions in the Enhanced Heavily Indebted Poor Countries 

16 (HIPC) Initiative: 

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

18 of debt relief provided by the IMF and the World 

19 Bank under the Enhanced HIPC Initiative for the 

20 benefit of a HIPC shall be sufficient to completely 

21 cancel 100 percent of the debts owed by the HIPC 

22 to these institutions. Debt cancellation shall be pro23 vided by the IMF and the World Bank using their 

24 own resources. 
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1 ‘‘(2) PROHIBITION ON STRUCTURAL ADJUST2 MENT PROGRAMS.—The provision of debt relief 

3 under the Enhanced HIPC Initiative shall not be 

4 conditioned on any country adopting or imple5 menting any structural adjustment or stabilization 

6 program of the Poverty Reduction and Growth Fa7 cility of the IMF or any other structural adjustment 

8 or stabilization program operated solely or jointly by 

9 the IMF or the World Bank. 

10 ‘‘(3) IMMEDIATE SUSPENSION OF DEBT SERV11 ICE PAYMENTS FOR COUNTRIES DEVELOPING

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

13 to develop and implement their Poverty Reduction 

14 Strategy Papers (PRSPs) pursuant to the Enhanced 

15 HIPC Initiative shall not be required to make serv16 ice payments on their debts. The PRSPs shall be de17 veloped and implemented with the participation of 

18 civil society in order to ensure that the savings from 

19 debt relief will be invested in HIV/AIDS treatment 

20 and prevention, health care, education, and poverty 

21 reduction programs. 

22 ‘‘(4) COUNTRY ELIGIBILITY.—The eligibility re23 quirements of the Enhanced HIPC Initiative shall be 

24 revised to make Bangladesh, Haiti, and Nigeria eli25 gible.’’. 
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1 SEC. 4. TECHNICAL ASSISTANCE. 

2 The Secretary of the Treasury shall provide or other3 wise arrange for the provision of technical assistance upon 

4 request to heavily indebted poor countries (within the 

5 meaning of the Enhanced Heavily Indebted Poor Coun6 tries (HIPC) Initiative) regarding compliance with all con7 ditions for debt relief pursuant to the Enhanced HIPC 

8 Initiative, including the development and implementation 

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

10 Secretary of the Treasury shall inform all such countries 

11 of the availability of the technical assistance within 30 

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

13 SEC. 5. REPORT TO THE CONGRESS. 

14 Not later than December 31 of each year, the Presi15 dent shall submit to the Committees on Financial Serv16 ices, on Appropriations, and on International Relations of 

17 the House of Representatives and the Committees on For18 eign Relations, on Banking, Housing, and Urban Affairs, 

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

20 be made available to the public, on the activities under21 taken under this Act, and on the progress made in accom22 plishing the modifications to the Enhanced HIPC Initia23 tive called for in this Act, for the preceding fiscal year.

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