Jubilee Act passed in the House!
On April 16th, the House of Representatives passed the Jubilee Act for Responsible Lending and Expanded Debt Cancellation of 2008. This bill pushes the Bush Administration to begin negotiations for an agreement with the IMF, World Bank, and the Paris Club of bilateral creditors to allow up to 24 additional low-income countries to qualify for international debt relief.
Debt cancellation is important because it is a tested and proven tool for releasing resources to fight poverty and injustice. For example, savings from debt cancellation in 2005 have enabled Zambia to hire 4,500 new teachers and eliminate fees for rural health care. Similarly Uganda used its $57.9 million in savings from debt relief in 2006 to invest in energy infrastructure, primary education, malaria control, health care, and water infrastructure. In fact, the bill requires that countries receiving debt relief use their savings for poverty reduction efforts. To ensure accountability, the Jubilee Act also requires countries to
- Foster transparent and participatory policies to achieve poverty reduction through economic growth;
- Ensure sound budget procedures, good governance, and effective anti-corruption measures; and
- Produce and disclose to the public an annual report disclosing how the savings from debt cancellation will be used.
The bill also includes measures that ensures that countries benefiting from debt cancellation will not fall back into unsustainable debt.
In addition to being a useful tool for reducing global poverty, debt cancellation is also important because of the unfair ways by which debt has accumulated for most countries. According to the Jubilee USA Network, debt:
- Is already paid - nations have already paid back their debts time and again. Debt continues to accumulate only because of skyrocketing interest rates and compound interests making repayment impossible. For example, from 1970-2002, Africa received some $540 billion in loans and paid back $550 billion in principal and interest. Yet Africa remains today with a debt stock of $295 billion.
- Hurts the poor - Loans are given with conditions that require countries to limit government spending. This leads to a reduction in spending on essential human services, like primary health and education, and access to safe water.
- Isn't really owed - Much of the debt is a result of "bad faith" lending including: the practice of pushing loans on developing nations because banks had too much money and had to lend it, knowingly lending to corrupt governments for political purposes, and lending with conditions ensuring profits return to the creditors.
Thanks to your advocacy efforts, the Jubilee Act passed the House on April 16 by a vote of 285 to 132. But it's not over yet! For the bill to become law, it must pass the Senate! To find out more information on how to call your state senator, visit: Jubilee USA Network
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