Clinton proposes to forgive debt of poorest countries

U.S. windfall would go to as many as 36 nations

September 30, 1999|By LOS ANGELES TIMES

WASHINGTON -- President Clinton offered yesterday to forgive all the official debts to the United States of as many as 36 of the world's poorest nations, provided that they use their windfall to finance "basic human needs."

The plan, which in theory could enable the Treasury Department to erase a total of $5.7 billion in debt, builds on a previous U.S. commitment to write off a substantial portion of those countries' red ink.

Yesterday's offer only slightly increases the dollar amount of debt forgiveness that Clinton had previously pledged. But agreeing to completely clear the books of such debt was seen by advocates as symbolically important.

Much of the debt is considered virtually impossible to collect, and some anti-poverty advocates said the plan's greatest value would be in goading other affluent countries to follow the U.S. lead.

Clinton's offer reflected a growing awareness among the world's financial leaders that the gulf between rich and poor countries had become a major problem at a time of widespread affluence in the advanced world.

"I don't believe we can possibly agree to the idea that these nations that are so terribly poor should always be that way," Clinton told an international audience of financial officials at the annual meetings of the International Monetary Fund and World Bank.

"I don't think we can in good conscience say we support the idea that they should choose between making interest payments on their debt and investing in their children's education."

Clinton called debt relief "a gift to the new millennium." His offer followed a campaign to forgive the debt burdens of the world's poorest countries that has been supported by Pope John Paul II and a growing cadre of political activists on several continents.

In June, leaders of the world's seven wealthiest nations, meeting in Germany, pledged to slash the debt burdens of the neediest countries by $70 billion or more.

Details of that highly complex international plan are being worked out. The plan could ease the debt loads of many impoverished nations starting next year.

"Today I am directing my administration to make it possible to forgive 100 percent of the debt these countries owe 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 told the financial leaders, prompting a standing ovation.

Pub Date: 9/30/99

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