[Congressional Record Volume 145, Number 125 (Thursday, September 23, 1999)]
[Extensions of Remarks]
[Page E1939]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page E1939]]



                 DEBT RELIEF AND IMF REFORM ACT OF 1999

                                 ______
                                 

                            HON. JIM SAXTON

                             of new jersey

                    in the house of representatives

                      Thursday, September 23, 1999

  Mr. SAXTON. Mr. Speaker, today I have been joined by my friend Dennis 
Kucinich in offering legislation to advance debt relief and reform of 
the International Monetary Fund (IMF). While this may appear to be an 
ambitious undertaking, it is my view that true and lasting debt relief 
will be most quickly and effectively obtained through IMF reform. The 
bill contains four main sections: conditions on gold sales; termination 
of ESAF and use of its reserves for debt relief; a freeze on IMF 
funding until debt relief is provided; and Congressional pre-approval 
of future proposed quota increases.
  As the research of the Joint Economic Committee (JEC) has found, the 
IMF in recent decades has drifted away from its original mission and 
towards becoming another development bank much like the World Bank. The 
development and economic restructuring loans made under this policy 
have become increasingly problematic, as the recent cases of Russia and 
Indonesia indicate. The leading edge of this drift in IMF policy has 
been the Enhanced Structural Adjustment Facility, or ESAF.
  It was a fundamental policy mistake for the IMF to have established 
ESAF and embarked on the course of development lending that has led to 
so many serious problems around the world. This legislation seeks to 
correct this mistake by closing ESAF and using its reserves for debt 
relief. The legislation is based on the view that the policy underlying 
the establishment of ESAF is bankrupt, and therefore ESAF should be 
ended, and its legacy of heavy debt burdens on the poorest nations 
should be written off. As I have said many times, my own view is that 
this type of lending through the IMF's general resources should also be 
ended, and the IMF refocused on its original function.
  The bill also would pre-condition U.S. approval of gold sales upon 
the following: cancellation of IMF debt owed by countries eligible for 
debt relief under HIPC, increased IMF financial transparency, a 
Congressional finding of IMF compliance with Congressional reforms, an 
accurate accounting of IMF costs, and use of the gold restitution 
provisions. The IMF's attempt to tap taxpayer funds through the new 
gold sales proposal about to be unveiled would be blocked. The bill 
would also block future IMF appropriations until debt relief is 
provided and require Congressional pre-approval of any future proposed 
quota increases.
  The IMF has been generously funded by the taxpayers of its major 
donor nations for many years. However, these resources have often been 
used to implement counterproductive IMF policies around the world. The 
IMF and Administration approach essentially papers over IMF mistakes 
with additional taxpayer money tapped in ways that are not always 
transparent. It is our view that the cost of IMF policy mistakes should 
be paid out of IMF resources, and not through further contributions by 
the taxpayers.
  For more information on the IMF and international economics, please 
visit our website at www.house.gov/jec.

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