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Statement on Debt Relief for Poor Countries

 

Most Reverend John H. Ricard, SSJ
Chairman, Committee on International Policy
United States Conference of Catholic Bishops 

June 8, 2004

As the leaders of the most powerful nations of the world gather for the G-8 Summit, we call upon them to make it an occasion of decisive action to complete the unfinished agenda of debt relief for poor countries.

We urge President Bush to take the lead with his colleagues on this urgent matter. We greatly appreciate the President’s new initiative for combating HIV/AIDS, malaria and tuberculosis, and the Millennium Challenge Account. These initiatives, coupled with increases in ongoing development assistance, would reflect the most substantial US commitment to alleviating poverty and disease in decades. Nevertheless, we believe that a definitive resolution of the debt problem is an essential complement to these efforts if poor countries are to move towards the Millennium Development Goals for poverty reduction and human development.

We recognize that there are many important matters that must be taken up at the Sea Island meeting, but debt relief should not be pushed aside. Responding to the needs of our poorest brothers and sisters is not a matter of choice; it is our moral responsibility. Investing in human development is also a wise path, as fostering hope and prosperity in the poorest countries will help to ensure greater international security and peace.

It has been almost ten years since Pope John Paul II recalled the Biblical tradition of the Jubilee as a time to reestablish justice and equity and issued his oft-repeated call for “reducing substantially, if not canceling outright, the international debt which seriously threatens the future of many nations.” The worldwide Jubilee 2000 movement which was mobilized in the following years, and in which we were active participants, was the driving force behind the 1999 revision of the Heavily-Indebted Poor Countries’ (HIPC) debt relief program. We welcomed this important initiative and note that it has resulted in the cancellation of large amounts of external debt and has been accompanied by important increases in social expenditures.

A substantial number of potential HIPC countries, however, have yet to qualify for relief. Thus, HIPC must be extended beyond the current expiration date of December 2004. But extension is not sufficient. The program must be strengthened. This is because, despite its accomplishments, HIPC has failed to achieve the Jubilee promise of a “fresh start” for the poor. First, the countries currently benefiting from HIPC debt reduction will continue to face debt payment obligations totaling over $2.5 billion annually. Second, the rise in debt levels caused by recent changes in factors such as export earnings and exchange rates illustrate the HIPC countries’ high degree of vulnerability to external events. This highlights the importance of deep debt relief to provide a cushion against the inevitable external shocks.

These results are not just about statistics. They are about people, their lives and well-being. Our brother bishops in Africa and Latin America tell us that debt payments are draining resources badly needed for health, education and other essential investments. They know that debt relief is not a panacea. Combating poverty requires action on many fronts by governments and people working together for the common good. Yet they also know that support from the wealthier countries is essential and that deeper debt relief must be part of the solution.

We urge the G-8 leaders, therefore, to develop concrete measures for new poor country debt relief at Sea Island that would “reduce substantially, if not cancel outright” the international debt seriously affecting many poor nations. We believe that implementation of the debt-relief provisions included in the U.S. Global HIV/AIDS Act of 2003, which call for reductions in debt stocks of eligible countries sufficient to bring about deep reductions in debt service obligations on old debt, would go a long way towards meeting this objective. It is also necessary that the substantial number of highly indebted poor countries not currently eligible for the HIPC program be considered for deep debt reduction.





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