rn: Jubilee success- foreign debt relief


Jan Slakov

Dear RN,                      Oct. 1

What are we to make of the news, below, that the Clinton administration is
proposing to offer debt relief to the world's poorest countries and that the
money saved must be used for social programs? Great news, but I can't help
but be sceptical...

After all, US Treasury Secretary Lawrence Summers (quoted below) is the same
one who was featured in the May 18 (99) "CORP-FOCUS" article by Robert
Weissman entitled "The Trouble with Larry" In it, Weissman points out that
Summers, and the corporate mindset in general, seem to see nothing wrong
with the idea that:

"Just between you and me, shouldn't the World Bank be encouraging more
migration of the dirty industries to the LDCs [least developed

And the Clinton administration has continued to train repressive militaries
which are used to wipe out the very people who are struggling to improve
living conditions in countries like East Timor. (See the next posting on
US/UK training for butchers.)

all the best, Jan

Date: Thu, 30 Sep 1999 21:31:31 -0400 (EDT)
From: jan m <•••@••.•••>
Subject: jubilee success! foreign debt relief

fwded message --->

Date: Wed, 29 Sep 1999 18:00:01 -0400 (EDT)
From: Daniel Brezenoff <•••@••.•••>
Subject: jubilee success!
To: •••@••.•••


WASHINGTON (Reuters) - President Clinton pledged Wednesday the United
States would forgive
                      all debts owed to it by impoverished countries,
challenging other rich nations to be equally

                      Clinton, speaking at the annual meetings of the
International Monetary Fund and World Bank said it
                      was ``an economic and moral imperative that we use
this moment of global consensus to do better''
                      for the world's poorest countries.

                      ``Today I am directing my administration to make it
possible to forgive 100 percent of the debt these
                      countries owe to the United States,'' Clinton said.

                      Clinton's pledge, which was conditional on countries
using the debt forgiveness to finance basic
                      human needs, was received with a standing ovation by
those in the auditorium.

The commitment was the first of its kind from any of the Group of Seven
industrialized nations.

The G7 set the terms of the Heavily Indebted Poor Countries debt-relief
scheme at a meeting in Cologne in July. Financing for
the $27.4 billion plan was announced at the IMF/World Bank meetings
Monday. The Cologne plan called for rich countries to
forgive 90 percent of their debts but critics continued campaigning for
total forgiveness.

``Unsustainable debt is helping keep too many poor countries and poor
people in poverty,'' Clinton said. ``I do not think we
can say in good conscience that we support the idea that (poor countries)
should choose between making interest payments and
investing in their children's education.''


U.S. Treasury Secretary Lawrence Summers told reporters after Clinton's
speech that the United States would welcome other
rich nations to join in the effort. ``We will certainly be seeking others
to join us,'' Summers said.

Following Clinton's speech, advocates for debt relief were ecstatic.
Jubilee 2000, a coalition which has been dogged in its push
for complete debt forgiveness, said that the G7 should now work out a deal
to match Clinton's pledge.

``This announcement changes everything,'' Jubilee 2000 Director Ann
Pettifor said. ``In order to meet the president's challenge
to 'do better,' the world's leaders must meet again before the

The group, which boasts the Pope, rocker Bono, noted Harvard economist
Jeffrey Sachs and many U.S. lawmakers among its
supporters, has been pushing for the debt forgiveness as a gift for the
poor on the eve of the new millennium.

Clinton said funding for the expanded debt relief was included in his
request to Congress last week for almost $1 billion to fund
the U.S. contribution to debt relief.


The countries in question owe the United States about $5.7 billion. But
since the debt is valued at much less than its face value,
the entire amount could be financed with the $1 billion budget request,
Summers said.

The IMF/World Bank meetings have centered on the need to ease the debt
burden for the world's poorest countries and find
ways to reduce grinding poverty. At the meetings, the IMF has gone to
great lengths to display a softer, more caring approach,
announcing it would make poverty its focus in future and cooperate more
with the World Bank.

Earlier, developing countries welcomed the new desire to help poor
countries tackle their debt and poverty crisis.

Francisco Aguirre-Sacassa, Nicaragua's ambassador to the United States,
told Reuters that debt relief ``is one of the critical
economic issues.''

``For a country like Nicaragua, where debt is three times our gross
domestic product and we spend five times more to service
debt than we do on education, HIPC is critical.''