Dear Friends,
During the last year, Lutheran World Relief has asked you to take action on debt cancellation and thankfully through your advocacy, the Group of Eight (G-8) nations agreed to cancel the debt of 18 of the world’s poorest countries. Under the terms of the debt cancellation deal, 14 nations in Africa and four nations in Latin America were promised 100% cancellation of their debts to the International Monetary Fund (IMF), the World Bank, and the African Development Fund in 2006. This deal is important as it will release nearly $1 billion to fight poverty in these nations.
However the G-8 deal did not include the cancellation of the debts owed to the Inter-American Development Bank by the Latin American countries that qualify for the G-8 debt deal: Bolivia, Guyana, Honduras, and Nicaragua, who will pay $1.4 billion in debt service over the next five years to the Inter-American Development Bank. There are also other impoverished countries not part of the G-8 deal in Latin America and the Caribbean -- such as the Dominican Republic, Ecuador, Haiti, and Peru -- whose impoverished people could greatly benefit from the cancellation of debts owed to the Inter-American Bank.
WHY CANCEL DEBT IN LATIN AMERICA?
- Debt takes money from social services. Seventy percent of Hondurans live below the poverty line and a staggering 81% do not have access to clean drinking water. In 2003, Honduras made $363 million in debt service payments, which is almost one-third of the government’s revenue for the year. That same year Honduras spent twice as much on debt service as on public health. In 2006, Honduras will still pay $80 million in debt service to the IDB; money that could be spent on health care, education or clean water.
- Much of Latin America’s debt is odious. Under international legal precedent, a debt is considered odious when creditors lend knowingly to undemocratic or illegitimate regimes and the funds do not benefit the population. The debt of Nicaragua is a good example of odious debt. Much of Nicaragua’s current debt burden was incurred under the Somoza family’s military regimes with the most notorious dictator being Anastasio Somoza Debayle. The IDB lent $321.6 million to Nicaragua even though the rule of the Somaza family was marked by political repression of media and opposition voices, deteriorating economic conditions, and embezzlement of international aid funds. Nicaragua is still paying interest on this odious debt.
TAKE ACTION
Lutheran World Relief invites YOU to join us in calling for the definitive cancellation of all debts in Latin America and the Caribbean which impede human development and progress towards the Millennium Development Goals.
Email the U.S. Treasury Secretary John Snow at john.snow@do.treas.gov or fax him at (202) 622-0073. Please feel free to adapt this letter to your own style or to reflect additional concerns for you may have.
SAMPLE EMAIL/FAX
Secretary Dear Snow,
Last July, world leaders with the support of the Bush administration promised to cancel completely the debts of up to 38 of the world's most impoverished countries. This marked an important step towards conclusively addressing the debt crisis.
However, the G-8 did not adequately address the debt crisis in Latin America when they met last summer. While they promised $4.5 billion of debt stock cancellation to Nicaragua, Honduras, Bolivia, and Guyana from the World Bank and IMF, they ignored the fact that these same countries owe $5 billion to the Inter-American Development Bank (IDB).
I am writing to urge you to enact the definitive cancellation of all debts in Latin America and the Caribbean which impede human development and progress towards the Millennium Development Goals (MDGs). As a first step towards this, I urge you to work for the immediate and total cancellation of the debts held by Bolivia, Guyana, Haiti, Honduras and Nicaragua to the IDB.
Debt cancellation should be enacted without economic conditions - and urgently - as delays to debt cancellation cost lives. As long as impoverished countries in the region must make debt service payments to the IDB, they will be unable to achieve the MDGs and begin to reverse the stark conditions of poverty faced by their citizens.
Sincerely,
Your name and, if you wish, any
THANK YOU FOR YOUR ACTION!
Please join us in praying for our brothers and sisters in Latin American and around the world, as the poorest of the poor struggle to feed their families, send their children to school, and earn a living in the face of poverty and injustice.
Thank you for your tireless work – when you raise your voice in solidarity, the sound is heard around the world!
WHO IS LWR? Lutheran World Relief, an international nonprofit organization, works to end poverty and injustice by empowering some of the world's most impoverished communities to help themselves. With partners in 35 countries, LWR seeks to promote sustainable development with justice and dignity by helping communities bring about change for healthy, safe and secure lives; engage in Fair Trade; promote peace and reconciliation; and respond to emergencies. LWR is headquartered in Baltimore, Md. and has worked in international development and relief since 1945.
Lutheran World Relief is a ministry of the Evangelical Lutheran Church in America (ELCA), The Lutheran Church-Missouri Synod (LCMS), individuals and parish groups in international relief, development, advocacy and social responsibility.
More on Debt Cancellation:
Debt cancellation is desperately needed. African countries who owe international debts spend more on repayment of these debts than on health care for their citizens, even with limited and conditional debt relief. The average spent per person on debt service is $14 per person while the average spent on health care is less than $5 per person.
Debt relief works. Uganda, one of the first countries to receive debt relief, used $1.3 million of its debt savings specifically for its national HIV/AIDS prevention plan. This investment played a key role in reducing HIV infection rates by 40%. Imagine what 100% cancellation would achieve!
Lutheran World Relief, as a member of the Jubilee USA Network, supports 100% cancellation of multilateral debt (IMF, World Bank, regional development banks) for all impoverished nations - without harmful economic policy conditions attached.
