Jubilee Act of 2009 (H.R.4405)
In December 2009, the Jubilee Act was re-introduced to the House of Representatives by Rep. Maxine Waters (D-CA) along with 8 bipartisan co-sponsors. The Jubilee Act passed the House of Representatives in the 110th Congress with a two-thirds majority, but stalled in committee in the Senate. The Jubilee Act for Responsible Lending and Expanded Debt Cancellation (its official name) would expand eligibility for debt cancellation to 65 countries, while prohibiting harmful economic and policy conditions such as user fees for health care and education, measures that would increase the cost of clean drinking water or compromise workers’ rights, and requirements that would constrain government spending on health care and education.
As Jubilee USA’s website states, the Jubilee Act gives the United States the opportunity to “make a new deal on debt in which poor countries have a chance to fight poverty instead of paying off huge debts.” The human cost of these large debt payments is most alarming. Scarce resources are diverted from health care, education, food assistance, and economic development in order to pay interest on huge debts. The countries most heavily impacted by AIDS have precious little money to devote to programs for AIDS prevention, treatment, and care. The debt crisis has tangible effects on ability to provide health care: In Zambia, where approximately 20% of the adult population is infected with HIV, the country spends $76 million on its health budget and $89 million on debt service to the IMF and World Bank. Cameroon, Uganda, Malawi, and Guyana have all used partial debt relief to help finance AIDS prevention and care programs, saving lives and easing suffering.
In terms of the international debt crisis, we are not talking just about dollars: we are talking about people. In the words of Julius Nyerere, the former president of Tanzania, "Must we starve our children to pay our debts?"
On January 12th, a catastrophic 7.0 earthquake hit Haiti, killing over 200,000 people and leaving over one million homeless. While Haiti reached the “completion point” in the Heavily Indebted Poor Countries (HIPC) program in 2009, cancelling $1.2 billion of debt to bilateral and multilateral lenders such as the IMF, World Bank and the US government.
However, because the HIPC program only covers debts accrued up to 2004, Haiti is still $1 billion in debt to the Inter-American Development Bank and the IMF, and is expected to pay at least $100 million per year for the next five years. The global community has recognized that these are debts Haiti simply cannot pay as it recovers from the earthquake – the IMF has estimated that the recovery could cost in excess of $1 billion, or 15% of Haiti’s GDP.
In response, the House of Representatives (Debt Relief for Earthquake Recovery in Haiti Act, HR 4573) and the Senate Haiti Recovery Act, S2961) passed legislation urging the United States to use its power at international lending institutions to cancel this remaining debt. The President signed the bill into law in April 2010.