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Jubilee USA Network www.jubileeusa.org
July 22, 2010
IMF Takes Two Steps Forward and One Step Back on Haiti
Jubilee USA Encouraged by IMF's Debt Cancellation for Haiti, Concerned by New Loan
Contact: Melinda St. Louis, Deputy Director, 202-441-7579
Hayley Hathaway, Communications Coordinator, 202-543-0692
Jubilee USA Network welcomes the International Monetary Fund Executive Board's decision to cancel Haiti's $268 million debt to the institution in response to the January 12 earthquake. Yet the IMF's decision to provide $60 million in financing support as a new loan raises serious concerns.
When the IMF provided emergency assistance to Haiti as a $102 million loan after the earthquake, Jubilee USA and allies world-wide mobilized, calling for all of Haiti's debt to international financial institutions, including the post-quake IMF loan, to be canceled.
The Fund's launch of the Post-Catastrophe Debt Relief Trust Fund, through which Haiti's debt cancellation will be financed, represents an important step forward for the IMF as it initiates a concrete framework that provides debt cancellation and grant support to countries which face devastation beyond their control.
"It is indeed a victory that the International Monetary Fund responded to calls from civil society and governments around the world to cancel Haiti's debts. Now we must raise our voices again to make sure the Fund understands that a loan of any kind is completely inappropriate for a country in such desperate need," says Eric LeCompte, Executive Director of Jubilee USA Network.
The $60 million loan approved yesterday is the most concessional loan available from the IMF, with zero percent interest until the end of 2011 and a five and a half year grace period. If it is held as international reserves as planned, the loan may not add to the country's long-term debt burden. Still, the decision to provide this assistance as a loan risks putting Haiti into debt yet again.
"The IMF is taking two steps forward and one step back. This is a precedent-setting moment as the IMF has agreed to use internal resources to cancel the debt of a country facing extraordinary need. But, unfortunately, this good news is undermined by the IMF's new loan. The role of the IMF in Haiti has been long criticized, and this new loan could set Haiti on the wrong path toward a new cycle of debt. The IMF must go further by using its new Post-Catastrophe Trust Fund to provide assistance on grant terms and ensure that this comes without harmful conditions," says LeCompte.
Six months after the tragic earthquake struck the impoverished country, it is clear that Haiti will need massive support for the foreseeable future. 1.6 million Haitians remain homeless, and at the current rate, it will take 10 to 15 years just to clear the streets of Port-au-Prince of wreckage.
Tell President Obama to Achieve the Millennium Development Goals
Help us urge President Obama to take a stand in support of debt cancellation to help achieve the Millennium Development Goals. Representative Waters and Senator Casey are asking their colleagues to join them in signing letters to President Obama. These letters urge President Obama to incorporate expanded debt cancellation and responsible finance for poor countries into his plan to achieve the Millennium Development Goals (MDGs), which he has promised to present to the United Nations in September.
Please call and email your Representative and Senators today to ensure that President Obama includes debt relief as a part of his strategy to fight poverty.
As a constituent deeply committed to ending global poverty and achieving the Millennium Development Goals (MDGs), I urge you to take leadership on these issues by signing on to an important letter addressed to President Obama. Ahead of the upcoming Millennium Development Goal Review Summit, Congresswoman Waters is circulating a letter asking President Obama to include expanded debt cancellation for impoverished countries and responsible sovereign finance in his plan to achieve the MDGs.
The letter urges the President to support the following policies:
1. Expand debt cancellation for impoverished countries – There are 20 countries, like Kenya and Lesotho, that are struggling to meet the MDGs and could greatly benefit from debt cancellation but have been left out of previous debt cancellation deals.
2. Actively engage in the creation of frameworks for responsible lending and borrowing such as fair and transparent sovereign debt arbitration and curbing predatory vulture fund behavior.
3. Ensure continued World Bank and IMF reform to increase institutional transparency and accountability, and end harmful conditions attached to loans and debt relief.
With the economic crisis and the Millennium Development Goals only five years away, it is a critical moment for the United States to play a leading role in the fight against poverty. To sign on to this important letter, your staff can contact Kathleen Sengstock in Congresswoman Waters’ office.
Call (202) 224-3121 and ask for your Members of Congress.
Here’s a sample script for the House of Representatives:
“Hello My name is xxx from xxxxx and I am a constituent of Representative ___. I want him/her to sign on to Representative Waters' letter to President Obama. This letter urges the President to include expanded debt cancellation and responsible finance for impoverished countries in his plan to meet the Millennium Development Goals. He should bring these policies to the UN Millennium Development Goal Review Summit in September so millions can benefit from the proven results of debt cancellation."
Here’s a sample script for the Senate :
“Hello My name is xxx from xxxxx and I am a constituent of Senator ___. I want him/her to sign on to Senator Casey's letter to President Obama. This letter urges the President to include expanded debt cancellation and responsible finance for impoverished countries in his plan to meet the Millennium Development Goals. He should bring these policies to the UN Millennium Development Goal Review Summit in September so millions can benefit from the proven results of debt cancellation."
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Stop VULTURE Funds Act (H.R. 2932)
www.jubileeusa.org/vulturefunds.html
www.jubileeusa.org/fileadmin/user_upload/Resources/Vulture_Funds/HR2932-Stop_Vulture_Funds.pdf
Stop Vulture Funds from Hurting Poor Countries!
It's time to stop Vulture Funds from harming poor countries once and for all. Vulture Funds are predatory hedge funds that siphon off newly freed resources from debt cancellation. They profiteer off debt cancellation resources by buying up poor country debt in default at pennies on the dollar and then abusing US Courts to sue for the full amount of the debt plus exorbitant interest rates and court fees. Instead of US tax dollars going to poverty alleviation projects like building schools and treating HIV/AIDS, they go into the bank accounts of greedy Vultures.
Luckily, you can tell Congress to stop this behavior once and for all! Send a message to your House Representative telling him to co-sponsor the Stop Vulture Funds Act, which will prevent further misuse of our Courts in Vulture Fund cases against poor countries.
HR 2932 Legislative Leave Behind Packet
When meeting with your Member of Congress, please take the following items with you and give them to your members or their staffer in a folder in the order in which they are presented below.
www.jubileeusa.org/vulturefunds/leavebehindpacket.html -- all you need to know about the bill
1. Vulture Funds: A Threat to the Poorest Countries and U.S. Foreign Assistance
2. Stop VULTURE Funds Act (H.R. 2932) – Summary and FAQ by Africa Action
3. Vulture Funds Glossary by Africa Action
4. Vulture Funds and Poor Country Debt: Recent Developments and Policy Responses by Jubilee USA
5. Stop Vulture Culture by TransAfrica Forum
6. GAO Report on Vulture Funds
7. IMF Commercial Creditor Lawsuit List
8. Bill text HR 2932
9. List of Original Cosponsors
10. Organizational Sign-on letter to Congress
List of Cosponsors as of 5/28/2010*
Rep Baca, Joe [CA-43] - 9/30/2009
Rep Bachus, Spencer [AL-6] - 6/18/2009
Rep Baldwin, Tammy [WI-2] - 12/3/2009
Rep Bishop, Sanford D., Jr. [GA-2] - 10/29/2009
Rep Brown, Corrine [FL-3] - 7/9/2009
Rep Cohen, Steve [TN-9] - 9/17/2009
Rep Conyers, John, Jr. [MI-14] - 6/18/2009
Rep DeLauro, Rosa L. [CT-3] - 11/5/2009
Rep Edwards, Donna F. [MD-4] - 5/28/2010
Rep Ellison, Keith [MN-5] - 4/14/2010
Rep Eshoo, Anna G. [CA-14] - 3/4/2010
Rep Filner, Bob [CA-51] - 7/9/2009
Rep Fudge, Marcia L. [OH-11] - 9/17/2009
Rep Green, Al [TX-9] - 9/17/2009
Rep Grijalva, Raul M. [AZ-7] - 7/28/2009
Rep Gutierrez, Luis V. [IL-4] - 6/18/2009
Rep Hastings, Alcee L. [FL-23] - 10/8/2009
Rep Hinchey, Maurice D. [NY-22] - 6/18/2009
Rep Honda, Michael M. [CA-15] - 7/9/2009
Rep Jackson, Jesse L., Jr. [IL-2] - 7/28/2009
Rep Lee, Barbara [CA-9] - 6/18/2009
Rep Lewis, John [GA-5] - 7/31/2009
Rep Lynch, Stephen F. [MA-9] - 4/14/2010
Rep McCollum, Betty [MN-4] - 11/5/2009
Rep Meeks, Gregory W. [NY-6] - 6/18/2009
Rep Moore, Gwen [WI-4] - 6/18/2009
Rep Moran, James P. [VA-8] - 7/9/2009
Rep Norton, Eleanor Holmes [DC] - 6/18/2009
Rep Payne, Donald M. [NJ-10] - 6/18/2009
Rep Richardson, Laura [CA-37] - 9/30/2009
Rep Schakowsky, Janice D. [IL-9] - 6/18/2009
Rep Stark, Fortney Pete [CA-13] - 9/30/2009
Rep Wasserman Schultz, Debbie [FL-20] - 6/18/2009
