[Congressional Record Volume 148, Number 44 (Thursday, April 18, 2002)]
[Senate]
[Pages S2966-S2967]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BIDEN (for himself, Mr. Santorum, Mr. Kerry, Mr. Frist, 
        Mr. Sarbanes, Mr. Chaffee, and Mr. DeWine):
  S. 2210. A bill to amend the International Financial Institutions Act 
to provide for modification of the Enhanced Heavily Indebted Poor 
Countries (HIPC) Initiative; to the Committee on Foreign Relations.
  Mr. BIDEN. Madam President, I rise today, along with my colleague, 
Senator Santorum, to introduce legislation to reform the way we provide 
debt relief for the poorest nations of the

[[Page S2967]]

world. We are joined in this effort by Senators Kerry, Frist, Sarbanes, 
Chafee, and DeWine.
  Earlier today, our friends from the House, Chris Smith, John LaFalce, 
Spencer Baucus, Maxine Waters, Barney Frank met with us to announce the 
introduction of companion legislation on their side of the Hill.
  Looking around at that group of people, it would be fair to wonder 
what we all have in common. Some days, not much. Today, however, what 
we have in common is a shared concern about the fate of the men, women, 
and children in the poorest countries of the world.
  It is true that the war on terrorism has brought home to us more 
clearly than before that conditions of grinding poverty in the rest of 
the world are ignored at our peril. Common sense tells us that our 
national security is at risk in a world where millions of people have 
little to live for, and are ripe for the seductions of radical, even 
violent action against the desperate conditions they face every day.
  As Tom Friedman has said in another context, if you don't visit the 
bad neighborhoods, they will visit you.
  But that cannot be the only reason that we all share a concern about 
poverty in the underdeveloped countries of the world. All of the 
world's great religions charge us to look after each other, and show 
special concern for those who need it most.
  Common decency recoils at the conditions of disease and deprivation 
faced by others while we are so blessed with abundance here.
  Common sense, and common decency. That is what brought us all 
together today.
  Few things offend both common sense and common decency more than the 
situations faced by the poor countries of the world who lack the 
resources to provide the most basic public health care and the most 
basic education, but yet still send money to the international 
financial institutions established by the wealthiest nations of the 
world.
  They send two billion dollars a year here to Washington, home of the 
World Bank and the International Monetary Fund, and to the regional 
development banks around the world, to pay interest on loans they have 
taken out over the years, money that they desperately need for basic 
human services.
  We set up those institutions to promote conditions for global 
economic growth and stability, and to promote economic development. And 
they do many good things. But the blessings that came when those loans 
went out to poor countries in many cases have turned into a curse. Now 
many of those countries are stuck in a debt trap, where payments to 
simply service the interest on those loans weaken their ability to 
provide the kind of essential public services needed for basic human 
existence, much less sustainable economic growth.
  Tragically, most of the countries with the greatest debt burdens are 
among the worst victims of the HIV/AIDS epidemic. The resources needed 
in African countries in the fight against HIV/AIDS are already beyond 
their reach. The burden of debt makes that fight even harder.
  Two years ago, the United States joined with the other members of the 
IMF and the World Bank to reduce the debt burdens of the Heavily 
Indebted Poor Countries. The world's churches led that fight, the 
Jubilee 2000 fight, to undo some of the harm done by this cycle of 
debt. I was proud to be part of that effort.
  The result was a real improvement in the debt situation of many 
countries. Our experience with that program shows that the money we 
free up with debt relief really does go for the important services the 
poor citizens of these countries really need.
  As a matter of fact, about 40 percent of the debt savings in those 
countries is going for education, and 25 percent for health care.
  But realistically, these countries will still be stuck in a debt trap 
far into the future.
  In fact, just this week the Bank and the Fund honestly admitted that 
under the current formula, many countries will simply not reach a 
sustainable level of debt. James Wolfenson, President of the World 
Bank, has said that he is considering deeper debt relief to achieve the 
goals of the existing HIPC program. The legislation I am introducing 
today with Senator Santorum will make success under that HIPC program 
more likely.
  Specifically, for the many countries facing a public health crisis, 
such as the HIV/AIDS epidemic, we say that no more than five percent of 
their budgets should go to service their debt to the international 
financial institutions. For those who do not face such a crisis, debt 
service should exceed no more than ten percent of their budget.
  While the existing HIPC program sets a sustainable level of debt at 
150 percent of a country's income from exports, our bill says that it 
is also important to measure the debt burden against a country's 
budget, as well. That's the best way to see the real impact on a 
country's ability to meet its own pressing domestic needs.
  In fact, given the deep problems the eligible nations have with 
trade--most of them export basic commodities whose prices have been 
declining--using export income should not be the sole basis for 
determining their ability to pay. The HIPC program currently assumes 
that the eligible countries will enjoy much higher growth in that 
export income than they have ever been able to achieve. That is a 
formula for disappointment.
  Deeper debt relief, more sustainable debt levels, measured by a 
country's actual ability to pay as a share of its budget, that is what 
our legislation would establish as the U.S. negotiating position at the 
Bank and the Fund. If those reforms are adopted, an additional billion 
dollars a year of debt service will be lifted from the poorest nations.
  This weekend, the Bank and the Fund will be meeting here in 
Washington, and I expect those very issues will be under discussion. 
The legislation we are introducing today offers a way to achieve the 
original goals of debt relief, and the goals of our own foreign policy 
in the developing world.
  Common sense, and common decency, should help us find some common 
ground to achieve those goals. The broad coalition of support this 
legislation already enjoys tells me that we can succeed.
                                 ______