Clinton Pledges Cancellation For Poor-Country Debt

30^th September 1999

President Clinton announced today that the US would cancel 100% of debt owed to the United States by the world's poorest countries, provided the money was spent on basic human needs. His statement was made at a joint meeting of the World Bank and IMF and laid down a direct challenge to other creditors to increase the debt cancellation on offer.

"Today I am directing my administration to make it possible to forgive 100 percent of the debt these countries owe to the United States, when, and this is quite important, when needed to help them finance basic human needs and when the money will be used to do so," Clinton announced.

Explaining the decision, Clinton said: "Simply put, unsustainable debt is helping to keep too many poor countries and poor people in poverty." He went onto say that debt cancellation was a "moral and economic imperative at this moment of global consensus"

White House spokesman Jake Siewert confirmed that Clinton's announcement represents an expansion of the previous U.S. commitment to debt relief made at the Cologne summit of the Group of Seven (G7) major powers in June. He said the United States had intended initially to forgive 90 percent of the debt owed by eligible nations. ``Today we're talking about 100 percent debt forgiveness,'' Siewert said.

In addition to the proposal, Clinton also outlined his personal commitment to debt cancellation. He said:

"I hope we will start the new millennium with a new resolve, to give every person in the world, through trade and technology, through investments in education and health care, the chance to be part of a widely shared prosperity in which all the people's potential can be developed more fully."

He emphasised: "For me, it is a personal priority of the highest order."

The announcement follows intense pressure from the Jubilee 2000 movement, and in particular the declaration by the Pope following a meeting with musicians, academics and campaigners on September 23^rd. The Pope specifically questioned why progress in resolving the debt problem is so slow, and expressed impatience with the protracted negotiations.

When Clare Short, UK Minister for International Development, was challenged on the BBC Today Programme as to whether Britain would be following suit, she said, "I'm sure Stephen Byers will look into it." (Stephen Byers is the Minister for the Department of Trade and Industry to whom 95% of Third World debt due to Britain is owed).

Many government representatives at the IMF and World Bank meetings had been saying privately and publicly that now that the Cologne deal was agreed, the issue of debt had been dealt with. However Clinton's statement breaks open the debate again and should significantly advance the process.

Ann Pettifor, Director of Jubilee 2000 UK Coalition said:

"This announcement changes everything. In order to rise to President Clinton's challenge to `do better', the world's leaders must meet again before the millennium and agree to 100% cancellation."

"Under the deal agreed this week in Washington, too many countries will still be paying more on debts than on health and education. It covers too few countries, offers too little cancellation and has no deadline. As a result relief will be stretched over too many years. The world's leaders must go further - now."

Bono, responding to the announcement said:

"This is what we want from our politicians: vision, balls and an ear to the ground. Tony Blair and Gordon Brown have it too. This is what Jubilee 2000 is about - people power, cliched though it may sound. Next up, Gerhard Schroeder, Lionel Jospin and Keizo Obuchi and the World Bank."