US campaigners hope for long-awaited victory in Congress as Bush backs debt relief in Presidential debate

Hopes have risen for a successful outcome to the year-long campaign to persuade the United States Congress to fund the country's share of the HIPC international debt reduction initiative, following reports of progress in negotiations between lawmakers in Washington.

The Wall Street Journal reported on 10 October that the Republican-led Congress could meet or even exceed the Clinton administration's request for $435 million to write off debt owed to the US and help international institutions do the same, as part of the international deal agreed at the Cologne G8 Summit in June 1999. The reported Republican offer would provide an estimated $238 million for this year an additional $210 million which had been requested last year, but never funded. The final deal on the 2001 US budget is now thought likely to be agreed around October 20.

While hopes are now high that the funding will be provided, concern remains over a request by the administration to allow the IMF to revalue a portion of its gold to finance debt cancellation – a move which Congress approved only in part in last year's budget round, leaving the need for approval of a second tranche this year. The Republican leadership's position on this is not yet clear. Attention is also being focused on the price the Republicans will extract from the Clinton administration in return for its debt relief funding, and the President is thought to be under pressure to restrict funding for family-planning organisations that advocate abortion rights in poorer countries.

On the same day as the Wall Street Journal's report, Republican presidential nominee George W Bush backed the cancellation of third world debt as an expression of one of the `values' he would apply to foreign policy if elected president. Asked if the United States' power brought with it `special obligations to the rest of the world', Bush answered: “Yes, it does. Take, for example, Third World debt. I think - I think we ought to be forgiving Third World debt under certain conditions. I think, for example, if we're convinced that a Third World country that's got a lot of debt would reform itself, that the money wouldn't go into the hands of a few, but would go to help people, then I think it makes sense for us to use our wealth in that way.”

Later in the debate, Bush repeated his support for debt cancellation when asked about declining levels of foreign aid. He added: “That's a place where we can use our generosity to influence, in a positive way, influence nations. I believe we ought to have foreign aid, but I don't think we ought to just have foreign aid for the sake of foreign aid. I think foreign aid needs to be used to encourage markets and reform. I think a lot of times we just spend aid and say we feel better about it, and it ends up being spent the wrong way.”

On the International Monetary Fund, he said: “I think the IMF has got a role in the world, but I don't want to see the IMF out there as a way to say to world bankers, "If you make a bad loan, we'll bail you out." It needs to be available for emergency situations.”

A Washington Post editorial on 10 October also highlighted the need for urgent debt cancellation, and called on the US Congress to support it. The Post wrote; “The blockage, which has been erected by Sen. Phil Gramm, is a lever to get the administration to promise IMF reforms. But the reforms are ill-advised, and Mr. Gramm should not hold debt relief hostage to them.”

Looking at Congressional obstacles to progress on two other issues – funding for UN peacekeeping missions and the promotion of free speech – as well as debt relief, the editorial concluded: “All three arguments affect America's international standing. The United States has sent the United Nations off on peacekeeping missions; it has sent advisers to developing countries to promote free speech as a cornerstone of democracy; it has advocated debt relief. If Congress undercuts these positions, it will be damaging two things at once: sound policies and American credibility.”