PRESS RELEASE

 

For Immediate Release                                                                     Contact:  Mikael Moore

December 11, 2006                                                                            (202) 225-2201                                                   

 

SENIOR MEMBERS OF HOUSE

FINANCIAL SERVICES COMMITTEE

URGE INTER-AMERICAN DEVELOPMENT BANK

TO CANCEL POOR COUNTRY DEBTS

            Washington, D.C. – On Capitol Hill on Friday, December 8, 2006, Reps. Maxine Waters (D‑CA), James A. Leach (R-IA), Barney Frank (D-MA), Spencer Bachus (R-AL), and Carolyn B. Maloney (D-NY) sent a letter to Luis Alberto Moreno, the President of the Inter-American Development Bank (IDB), urging him to use his influence to ensure that the IDB promptly implements its decision to cancel the debts of five impoverished countries in Latin America.  A similar letter was sent to Treasury Secretary Henry M. Paulson, Jr.  The text of the letter follows:

            We welcome the decision of the Board of Governors of the Inter-American Development Bank (IDB), which was announced on November 17, to cancel the debts of five impoverished countries in Latin America.  We urge you to use your influence to ensure that the IDB Board of Governors agrees to cancel the largest amount of debt possible for all five countries and implements this decision without delay.

            As you know, the Multilateral Debt Relief Initiative (MDRI) promised to cancel the debts that qualifying heavily indebted poor countries (HIPCs) owe to the IMF, the World Bank, and the African Development Bank, but not those owed to the IDB.  As a result, the four HIPCs in Latin America – Bolivia, Guyana, Honduras and Nicaragua – have had to continue to make payments on their debts to the IDB, even after receiving debt cancellation through the MDRI.  Meanwhile, the most impoverished country in Latin America – Haiti – has not had any of its debts canceled because it was not included in the MDRI program.  The IMF currently estimates that Haiti will have to wait at least two more years before seeing full cancellation from the IDB or any multilateral creditor.  All five of these impoverished countries deserve to have their IDB debts canceled immediately and completely. 

            We understand that the IDB has yet to determine a cut-off date for the loans that will be affected by this agreement.  The United States Treasury Department reportedly supports canceling debts resulting from all IDB loans disbursed on or before December 31, 2004, a proposal that would result in $3.5 billion in debt cancellation.  However, the IDB is also considering cut-off dates in 2001 or 2003.  A cut-off date prior to December of 2004 would be most unfortunate.  A cut-off date in December of 2001 would reduce the amount of debt cancellation to as little as $1.6 billion. 

            We urge you to use your influence to ensure that the IDB promptly implements its agreement to cancel poor country debts.  We also urge you to support a cut-off date no earlier than December 31, 2004, for the loans affected by the agreement.  We look forward to your response and to working with you to free needy and deserving poor countries from the burden of multilateral debts.