Letter to National Security Advisor, Dr. Condoleezza Rice from religious leaders of three major Christian communions, regarding debt relief

October 15, 2002


Dr. Condoleezza Rice
Assistant to the President
for National Security Affairs
The White House
Washington, D.C. 20504


Dear Dr. Rice:


We urge you to support advocacy by the United States of deeper debt cancellation for impoverished countries than has resulted to date from the implementation of the Heavily Indebted Poor Countries (HIPC) initiative of the International Monetary Fund and the World Bank. We appreciate that the Bush Administration has recognized the need for debt relief for impoverished countries, and in particular we appreciate your personal commitment to raising the priority of Africa in U.S. policy. Present debt relief efforts, with Administration support, have reduced the annual debt service payments of the most impoverished and indebted countries by one-third, from $3 billion per year to $2 billion per year. With these savings, HIPCs have increased spending for health, education and other critical development needs. For example, Malawi is using debt relief to finance the purchase of critical drugs for hospital and health centers and hiring extra staff, and Uganda's debt savings have contributed to a marked decrease in HIV prevalence and a doubling of primary school enrollment.


However, deeper debt cancellation is badly needed. According to the September, 2002, IMF-World Bank "Status of Implementation" report on the HIPC initiative, two-thirds of the HIPC countries surveyed have experienced a deterioration in the "sustainability" of their debt compared to IMF-World Bank projections, with half of these countries experiencing a "large deterioration." At the same time, as you are aware, the HIV/AIDS crisis in poor countries is straining public health budgets.


The United States Senate, in Title 3 of H.R. 2069, calls for the U.S. to advocate that no HIPC qualifying for debt relief be required to pay more than 10% of its government revenue on external debt service, and no more than 5% if it has a public health crisis, as does H.R. 4524, the Smith-LaFalce bill. We estimate that this reform would cut an additional $1 billion in annual poor country debt service.


This proposal is an important step in helping the most impoverished countries lift the burden of debt that continues to draw precious resources away from fighting poverty and HIV/AIDS to repaying debts to the richest countries and institutions. We do not want to see resources contributed by U.S. taxpayers to fight HIV/AIDS recycled into debt payments to the IMF or other bilateral and multilateral creditors. We therefore urge you to support this reform.


We continue to look forward to working with you to advance a development agenda that provides substantial assistance to the poor of the developing world.


Sincerely,


Africa Faith and Justice Network
American Jewish World Service
Bread for the World
Catholic Relief Services
Church World Service
Episcopal Church USA
Evangelical Lutheran Church in America
Evangelicals for Social Action
Global AIDS Alliance
Jubilee USA Network
Lutheran World Relief
Mennonite Central Committee U.S. Washington Office
National Council of the Churches of Christ in the USA
Oxfam America
Presbyterian Church (USA)
Society of Missionaries of Africa
Union of American Hebrew Congregations
United Methodist Church, General Board of Church and Society
United States Conference of Catholic Bishops
Washington Office on Africa
World Vision US