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Old 06-09-2004, 06:56 PM   #1
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G8 considering 100% DEBT CANCELLATION!

Woo HOO! If you haven't yet, there is NO time like the present to give the White House or US Treasury a call. If fact, do it again even if you have. This really could happen this time....


Washington Post, June 9, 2004

U.S. Considers Forgiving Poor Nations' Debts

By Paul Blustein and Mike Allen

The Bush administration is considering throwing its weight behind a
British-backed plan that would eliminate the debt owed by some of the
world's poorest countries to international lending institutions, according
to people familiar with the matter.

The initiative would significantly deepen the debt relief available to poor
countries under a program launched during the 1990s. It may help Washington
obtain broad backing for its efforts to forgive most of Iraq's debt, because
proposals to grant debt relief to Baghdad have raised questions about why an
oil-rich country should get generous terms while poorer nations remain
financially strapped.

The initiative is still being debated within the administration, and
although advocates had hoped it might get a major push forward at this
week's Group of Eight summit meeting in Sea Island, Ga., that is unlikely,
administration officials said.

Some critics of the initiative argue that it is unwise to write off poor
countries' debts entirely, because the countries' governments may have less
incentive to adopt sensible economic policies if they assume their
obligations will be forgiven eventually. Another problem is the cost,
because it is far from clear that the administration is willing to commit
the billions of dollars that would have to be spent in coming years to
underwrite the write-off of debt by the World Bank and other international

Still, the plan has powerful boosters -- top officials in the U.S. and U.K.
treasury departments. The British government has been a leading champion of
increasing aid and debt relief, and for Prime Minister Tony Blair, getting
American backing for the plan would enable him to show a payoff for the
support he gave to President Bush on the Iraq issue.

Officials from both governments were extremely guarded in discussing the
plan and refused to be quoted by name, citing the fluid nature of the
negotiations. Tony Fratto, a Treasury spokesman, declined to comment. A
White House official said, "There are a lot of ideas in the U.S. government
and in the international community on this issue, but we have not settled on
an approach."

Under one option, reported by the British newspaper the Guardian yesterday,
the debt owed to the International Monetary Fund, World Bank and other
lenders by 27 countries in sub-Saharan Africa, Latin America and South Asia
would be eliminated. About 10 more countries could become eligible for such
relief; moreover, future World Bank aid to those countries would be given in
the form of grants rather than loans.

A 100 percent write-down would be considerably more generous than the terms
that the 27 countries can currently get under the Highly Indebted Poor
Countries initiative. The HIPC plan, which was launched in 1996 and expanded
in 1999, is aimed at reducing the countries' obligations to a manageable
level, defined as a certain multiple of their exports. The world's rich
countries have financed much of the initiative by contributing to a trust
fund used to pay the debts of the poor countries to the IMF and World Bank
as they come due.

Debt-relief advocates who have been talking with officials in Washington
and London about the proposal voiced hope that it would get a rhetorical
endorsement at the summit. They have been prodding the summiteers to provide
at least enough funding to extend the existing HIPC program.

"This summit can and should keep old promises on debt relief," said Jamie
Drummond, executive director of DATA, a group founded by the rock star Bono
to support aid, debt relief and trade concessions for Africa. "But the
proposal of 100 percent relief is something more -- a historic breakthrough,
a lasting exit from the shackles of debt for the poorest nations."

The rich nations would have to put up substantially more money -- over $1
billion a year for the next few years, and significantly greater amounts in
later years -- to fund the proposed 100 percent write-off plus the
conversion of loans to grants. Otherwise, the loss of debt payments from the
poor countries would hurt the financial condition of the World Bank and
other multilateral lenders, restricting their ability to aid other
developing countries that need assistance.

The need to ensure that money will be forthcoming from the rich countries
is a potentially major obstacle. The British, in particular, have insisted
that a concrete plan must be established to guarantee funding.

"It's very important to acknowledge a point of principle about the need for
greater multilateral debt relief," a British official said. "That shouldn't
be diminished. But it has to have a credible financing plan to back it."

Although adoption of the plan could help Bush politically by possibly
burnishing his image as a "compassionate conservative," a number of
economists are strongly opposed to 100 percent debt write-offs, even for
very poor countries. Among them is John Williamson, a scholar at the
Institute for International Economics, co-author of a book proposing a
substantial expansion of HIPC.

"It will go down well with all the debt campaigners, but it's not terribly
good development policy," Williamson said. "Once one establishes the
principle that at the end of the day a country gets a 100 percent debt
write-off, that destroys any incentive" for prompt adoption of the economic
reforms required to become eligible for HIPC.

"The other thing is the question of equity," Williamson said. "It's one
thing to bring down the indebtedness of HIPC countries, but it seems to me
to be terribly inequitable to give them a total write-off" when other poor
nations, such as Indonesia, don't qualify because their debt burden isn't
quite as overwhelming or their per-capita incomes aren't as low.

For the administration, the more important comparison may be Iraq. Since
Bush wants Baghdad's creditors to forgive most of its debt, which the
administration estimates at about $120 billion, it might help to show that
poor countries are also getting a generous deal.

But White House officials stressed that they consider the Iraqi debt a
separate issue. "There is no way there is going to be a grand bargain
combining HIPC and Iraq debt," a senior administration official said. "That
is not going to happen."

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Old 06-09-2004, 07:57 PM   #2
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to Bush and Friends--here's my with my G8 Drop the Debt Sign!


forgot about stoopid Angelfire...


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Old 06-09-2004, 08:06 PM   #3
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Excellent! My Congressman is behind the Bill in the House. I'm so proud of him! I'm writing to *him* as well to thank him for co-introducing the bill. He's Spencer Bachus, I think the finest compassionate conservative I've ever seen. He's been working on this for five years, and for the record his kids are proud owners of Bono's autograph.
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Old 06-10-2004, 07:31 AM   #4
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That's great news!

Sherry if you email me the sign pic I'll host it, angelfire and geocities will never post here
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Old 06-10-2004, 07:35 AM   #5
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This is awesome news! I hope to be able to give props to the people who deserve it if this goes through.
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Old 06-10-2004, 07:35 AM   #6
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Yay! That's great news! I really hope that this goes through!
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Old 06-10-2004, 10:32 AM   #7
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Time to really pull out the stops and get the ball rolling until its unstoppable.
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Old 06-10-2004, 10:35 AM   #8
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thanks for posting Sherry.. it is great news and pushing that all goes well.. next fair trade etc..
hope that everybody that can call did call .. to back this
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Old 06-10-2004, 02:49 PM   #9
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Thanks Kitty!

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Old 06-10-2004, 06:23 PM   #10
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wish I had better news....

An update...wisDear friends of Jubilee USA,

First of all, thanks to all of you for your incredible response to our
action alert yesterday. We received numerous reports that Treasury and the
White House were *flooded* with calls yesterday from all of you calling for
100% debt cancellation.

One Jubilee supporter reported that the secretary at the Treasury department
told her, "You wouldn't believe the number of calls I'm getting," and that
every one of her lines was filled with people calling for 100% cancellation.

Unfortunately, we have bad news to report from the summit. We just finished
watching President Bush's final press conference and Reuters and AFP have
also now confirmed that what the G-8 have agreed to on debt for impoverished
nations is: 1) the HIPC program will be extended for 2 more years and 2)
that some additional money will be committed to "top-up" the initiative to
bring a few more countries to "debt sustainability." This is of course
wholly insufficient and legitimizes HIPC, which after 8 years has failed to
provide an exit from the crisis.

That's the bad news. The GOOD news is: for the first time, there was serious
consideration by the G-8 -- in particular by the UK and the US Treasury
department to support 100% cancellation. Reports in the Wall Street Journal,
Financial Times, Washington Post, and the Guardian (UK) over the past few
days confirm that 100% debt cancellation was being discussed at the highest

This means that we are in a much better position than we ever have been.
This means our work to support the Jubilee Act in Congress is now more
critical than ever. We can, must, and will pick up on the momentum generated
here in Georgia. We know that the real decision on next steps on debt won't
be finalized until the fall meetings of the IMF and World Bank in October.
We have our work cut out for us, but we can and we must push forward our
vision of 100% debt cancellation, funded by the IMF/World Bank's own
resources, without harmful conditions, for all impoverished countries.
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Old 06-10-2004, 08:01 PM   #11
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