US pennypinching

[Doug Henwood]

[As if official debt-relief efforts weren't already marred by onerous 
conditionality and chintzy financing....]

Wall Street Journal - March 1, 2000

Penny-Pinching Blamed
For Hurting Relief Efforts

By MICHAEL M. PHILLIPS
Staff Reporter of THE WALL STREET JOURNAL

WASHINGTON -- The American-led international debt-relief effort for 
poor nations is running low on money because of U.S. penny-pinching, 
Treasury Secretary Lawrence Summers said.

The result, Mr. Summers said, is that some reform-minded developing 
nations will have to divert scarce funds from education and health 
programs to pay off foreign debts.

"To put it bluntly, if we do not play our part in this area, debt 
relief for Bolivia, Guyana, Honduras and Nicaragua will not happen," 
Mr. Summers testified at a Senate Foreign Relations Committee 
hearing. For instance, Bolivia, which has won U.S. praise for its 
market-minded economic policies, could miss out on $35 million in 
debt relief this year and an additional $110 million next year, he 
said.

Mr. Summers blamed Congress's refusal to meet the administration's 
funding requests. Congress provided only about a third of President 
Clinton's $320 million request for fiscal 2000, and the 
administration is awaiting action on an unusual $210 million 
supplementary request for the year. The president has also asked for 
$225 million in debt-relief funds for fiscal 2001 and $375 million in 
advance appropriations for future years.

If the U.S. doesn't pay its contribution to the debt-relief effort, 
which President Clinton and his rich-country counterparts unveiled 
with great fanfare last year, Latin American countries will be 
especially hard hit. Those countries' debts to the Inter-American 
Development Bank are largely being reduced with U.S. funds. Most 
other industrialized nations are focusing more on cutting debts owed 
to the African and Asian development banks.

But Mr. Summers also warned that Mozambique, where heavy rains have 
left as many as one million people homeless and caused $70 million or 
more in damage, could see delays in getting promised debt relief 
because of the funding shortage. The country is expected to qualify 
for $250 million in relief over the next 20 years, on top of some 
earlier debt reductions.

"The U.S. has to contribute its fair share," said Seth Amgott, a 
spokesman for Oxfam America, an antipoverty group that has been in 
the forefront of the debt-relief issue. "It shouldn't take a flood in 
Mozambique to get people's attention."