To urge reforms of the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative, and for other purposes.

February 6, 2003

Ms. WATERS (for herself, Mr. LEACH, Mr. FRANK of Massachusetts, and Ms. LEE) introduced the following bill; which was referred to the Committee on Financial Services

To urge reforms of the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Debt Cancellation for the New Millennium Act'.

SEC. 2. FINDINGS.

The Congress finds the following:

(1) The Enhanced HIPC Initiative was developed by the countries of the G-7 during the G-7 Summit meeting in Cologne, Germany, June 18-20, 1999.

(2) The purpose of the Enhanced HIPC Initiative is to provide debt relief to the world's poorest countries and enable these countries to invest the savings from debt relief in HIV/AIDS treatment and prevention, health care, education, and poverty reduction programs.

(3) The Enhanced HIPC Initiative requires heavily indebted poor countries (HIPCs) to develop and implement plans known as Poverty Reduction Strategy Papers (PRSPs) with the participation of civil society for the purpose of reducing poverty.

(4) The Enhanced HIPC Initiative does not provide full cancellation of the debts of HIPCs.

(5) The International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (World Bank) have sufficient resources to provide full cancellation of the debts that HIPCs owe to these institutions.

(6) The Enhanced HIPC Initiative requires HIPCs to implement structural adjustment programs approved by the IMF, which impose economic austerity upon these countries and are strongly opposed by civil society in many of the countries in which the programs have been implemented.

(7) The process of developing and implementing PRSPs has required considerable time and effort on the part of officials and citizens in many HIPCs, and, as a result, these countries have been unable to begin to receive debt relief as quickly as had been planned.

(8) The Enhanced HIPC Initiative requires HIPCs to continue to make service payments on their debts while they are developing and implementing PRSPs, as well as while they are implementing the IMF's structural adjustment programs.

(9) Many HIPCs have experienced revenue losses as a result of reductions in prices for export commodities. These revenue losses have reduced significantly the benefits of debt relief.

(10) Bangladesh, Haiti, and Nigeria were excluded from the Enhanced HIPC Initiative, although they are impoverished countries with significant debt burdens.

(11) The complete cancellation of the debts of impoverished countries will remove a major impediment to poverty reduction and economic growth, enable these countries to invest their resources in HIV/AIDS treatment and prevention, health care, education, and poverty reduction, and give these countries a fresh start in the new millennium.

SEC. 3. REFORMS OF THE ENHANCED HIPC INITIATIVE.

Title XVI of the International Financial Institutions Act (22 U.S.C. 262p-262p-7) is amended by adding at the end the following:

`SEC. 1625. REFORMS OF THE ENHANCED HIPC INITIATIVE.

`Congress urges the President to commence immediately efforts, within the Paris Club of Official Creditors, as well as the International Bank for Reconstruction and Development (World Bank), the International Monetary Fund (IMF), and other appropriate multilateral development institutions to accomplish the following modifications in the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative:

`(1) FULL DEBT CANCELLATION- The amount of debt relief provided by the IMF and the World Bank under the Enhanced HIPC Initiative for the benefit of a HIPC shall be sufficient to completely cancel 100 percent of the debts owed by the HIPC to these institutions. Debt cancellation shall be provided by the IMF and the World Bank using their own resources.

`(2) PROHIBITION ON STRUCTURAL ADJUSTMENT PROGRAMS- The provision of debt relief under the Enhanced HIPC Initiative shall not be conditioned on any country adopting or implementing any structural adjustment or stabilization program of the Poverty Reduction and Growth Facility of the IMF or any other structural adjustment or stabilization program operated solely or jointly by the IMF or the World Bank.

`(3) IMMEDIATE SUSPENSION OF DEBT SERVICE PAYMENTS FOR COUNTRIES DEVELOPING PRSPs- All HIPCs that are working in good faith to develop and implement their Poverty Reduction Strategy Papers (PRSPs) pursuant to the Enhanced HIPC Initiative shall not be required to make service payments on their debts. The PRSPs shall be developed and implemented with the participation of civil society in order to ensure that the savings from debt relief will be invested in HIV/AIDS treatment and prevention, health care, education, and poverty reduction programs.

`(4) COUNTRY ELIGIBILITY- The eligibility requirements of the Enhanced HIPC Initiative shall be revised to make Bangladesh, Haiti, and Nigeria eligible.'.

SEC. 4. TECHNICAL ASSISTANCE.

The Secretary of the Treasury shall provide or otherwise arrange for the provision of technical assistance upon request to heavily indebted poor countries (within the meaning of the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative) regarding compliance with all conditions for debt relief pursuant to the Enhanced HIPC Initiative, including the development and implementation of their Poverty Reduction Strategy Papers (PSRPs). The Secretary of the Treasury shall inform all such countries of the availability of the technical assistance within 30 days after the date of the enactment of this Act.

SEC. 5. REPORT TO THE CONGRESS.

Not later than December 31 of each year, the President shall submit to the Committees on Financial Services, on Appropriations, and on International Relations of the House of Representatives and the Committees on Foreign Relations, on Banking, Housing, and Urban Affairs, and on Appropriations of the Senate a report, which shall be made available to the public, on the activities undertaken under this Act, and on the progress made in accomplishing the modifications to the Enhanced HIPC Initiative called for in this Act, for the preceding fiscal year.

END