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#30: More on the debt: Support the McKinney Bill which addresses the situation (fwd)

From: Max Blanchet <MaxBlanchet@worldnet.att.net>

> Support McKinney Debt/IMF bill - organizational sign-on letter
> The following is a sign-on letter in support of the new legislation on
> cancellation and IMF restrictions being introduced by Rep. Cynthia
> We will be distributing this to all members of Congress.
> If your organization would like to sign on, please send a note to
> signon@rtk.net <mailto:signon@rtk.net> and indicate what city you're based
> in.
> Please send your response by Thurday, July 1.
> Thanks!
> 50 Years Is Enough Network
> = = = = = = = = = = = = = = = = = = = = =
> To: Members of the United States Congress
> From: Organizations concerned about the Third World debt crisis and IMF
> structural adjustment policies
> Re: McKinney Debt Cancellation Act of 1999
> Dear Member of Congress:
> Representative Cynthia McKinney plans to introduce legislation which would
> cancel the bilateral debt of poor countries to the United States and
> the International Monetary Fund to do the same as a condition of receiving
> funds from the United States. More than a dozen Members have already
> to co-sponsor this legislation. We urge you to support this important
> legislation by adding your name as a co-sponsor. Please contact Merwyn
> in Representative McKinney's office at 225-1605 to indicate your support.
> It is now universally recognized that the external debts of the poorest
> countries are unpayable. The international debt cancellation movement has
> called for the annulment of these debts by the millennium, in accord with
> the biblical call for cancellation of debt. Harvard economist Jeffrey
> director of the Harvard Institute for International Development, has
> testified to the House Banking Committee that this call for debt
> cancellation is reasonable and practical: the institutions which hold this
> debt could easily absorb the cancellation, which would require a small
> portion of their resources. Yet poor people in poor countries continue to
> pay a heavy price for the continued effort by their governments to service
> this debt, as hundreds of thousands of children die from preventable
> due to the diversion of resources from health care and education to debt
> service. The G7 has recently proposed a small improvement of the existing
> debt initiative, but the G7 initiative is simply "tinkering around the
> edges" as Sachs has said: it does not get rid of the debt, it does not
> up the needed resources for spending on health care and education, and it
> leaves the IMF as "gatekeeper" to debt relief and in control of the
> economies of the indebted countries.
> The McKinney bill covers countries classified as heavily indebted poor
> countries [HIPCs] by the World Bank, plus Haiti, the poorest country in
> Western Hemisphere. The nominal debt to the U.S. of these countries is
> $6 billion. Because this unpayable debt is worth far less than its nominal
> value, under current budget rules it would only cost about $600 million to
> cancel it. This represents less than 4% of the money that the U.S. gave to
> the IMF last year -- money which went to bail out bankers, prop up
> repressive regimes, and give the IMF leverage to impose brutal austerity
> policies. Similarly, Sachs estimates $7.83 billion for the nominal debt
> by HIPCs to the IMF, and shows how the IMF could easily absorb writing off
> this unpayable debt, without any new resources from the United States or
> other countries. The McKinney bill requires the IMF to write-off this debt
> as a condition of future U.S. funding.
> In his testimony Sachs called for the elimination of the IMF's Enhanced
> Structural Adjustment Facility [ESAF]. This step is long overdue. As a
> development model for poor countries, ESAF has been a failure, even as
> measured by IMF goals. According to the IMF's own staff review, annual
> per capita GDP growth averaged 0.0% for countries with ESAF programs over
> the period 1991-1995, whereas non-ESAF developing countries experienced,
> average, 1.0% annual real per capita GDP growth. African countries with
> programs fared even worse, with an average annual .3% decline in real per
> capita incomes over the period of IMF structural adjustment from
> At the same time the external debt burden of ESAF countries has grown
> as a share of their economies. As Sachs pointed out, ESAF undermines
> democracy by empowering the IMF to micromanage the governments of poor
> countries -- a task which, as Sachs says, is "well beyond the IMF's
> and competence." We oppose any scheme to provide new funds to ESAF,
> including the IMF's current plan to use gold sales for this purpose. The
> McKinney bill requires the IMF to eliminate ESAF as a condition of future
> U.S. funding.
> Poor countries have languished under a crushing external debt burden and
> austerity for far too long. Finally the political moment has arrived when
> something can be done about it. We urge you to co-sponsor the McKinney
> Cancellation Act. Thank you for your consideration.