Hearing of the State, Foreign Operations, and Related Programs Subcommittee of the House Appropriations Committee - U.S. Treasury International Assistance Programs and U.S. Contributions to International Financial Institutions
Interview
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REP. JACKSON: Thank you, Madam Secretary. And Mr. Secretary, thank you very much. Thank you, Madam Chairman, and thank you, Mr. Secretary -- (laughing) --
REP. LOWEY: (Crosstalk) --
REP. JACKSON: -- for your service to the country and for your testimony. Mr. Secretary, I want to focus a couple of my questions on the idea of debt relief. In 1999 I introduced a bill, the HOPE for Africa Act: Human Rights Opportunity Partnership and Empowerment. One of the tenants of that bill was full debt relief for all sub- Saharan African countries.
Secretary Paulson, I know you understand that detrimental role that debt payments have on many poor countries. Nobody benefits from these payments. Many of these debt payments were not incurred by the current governments saddled with them, and these debts disproportionately affect the poor people in these countries by preventing the governments from providing basic services like education and health care.
I'm concerned that not enough has been done to evaluate these debt relief resources. It has been three years since the Gleneagles G8 Debt Relief Agreement. I'm wondering what impact has this debt relief had on development outcomes in recipient countries and also how does the United States propose to continue funding our commitments to compensate the World Bank dollar for dollar for any lost income due to higher levels of debt relief?
And secondly, last week our good friend, Congresswoman Maxine Waters, passed out at the Financial Services Committee H.R. 2634, the Jubilee Act for Responsible Lending and Expanded Debt Cancellation of 2007. Does Treasury support this bill and its goal of increasing Multilateral Debt Relief?
SEC. PAULSON: Okay, well first of all, congressman, thank you from my home town. And thank you for your question. And I think you're right on that debt relief has been critical. I think you know how aggressive President Bush has been for aid to Africa and in debt relief.
I have spent a fair amount of time, as has our team at Treasury, working through the debt relief for Liberia. And a big part of what we're doing with IDA and with the big request and the increase -- and I just want to just point out to everybody on this committee that Treasury's overall budget went up a little bit. And a big increase we were proposing for this part of the budget is -- which doesn't translate into a lot for Treasury overall is emblematic of the importance we place on these programs. And so the -- and so look at IDA. Look at African Development Bank. Look at what we've done for Liberia.
And then to get to your rears, that's not as positive a story. We've put forward -- I'm just hoping we get this -- we tried a different approach this year. Last year we put in a much bigger request. None of it got through Congress. This year we put through what we just absolutely need, the $42 million for the World Bank for -- to deal with IDA.
Now, in terms of Jubilee, I'm sure that's a good program. This is not something we're pressing because we think -- we see -- when we're over $800 million in the rears for the debt relief for the countries that need it the most and the really low income countries, and we're way behind on that. We haven't got behind the effort -- the broader effort, which is, I'm sure, very well-intended and would be beneficial for the Jubilee program. It's just a matter of priorities and funding. What it is, we've already done and got on the table. But I appreciate your leadership in this area.
REP. JACKSON: With respect to Liberia for the few moments that I have left, can you lay out for us, from your perspective, what Treasury's plan is for Liberia? The chairwoman led a delegation of members of this committee to Liberia recently, and we've looked closely at some of the structural problems on the ground in that country. And clearly, Ellen Johnson-Sirleaf is in need of the assistance.
SEC. PAULSON: She's a hero, and there's a lot of -- first of all, you know what we did in terms of the debt relief, and she's -- and I'll tell you, she's very grateful for that help with the African Development Bank, the IMF, the World Bank. And what I'd like to do is you, you know, is so interested in this. I will send a team up to meet with you and just really take you through all the things, because this program is really multifaceted. And a lot of it is focused on capacity building, because this is a country -- this woman is a true hero. She's come into a very difficult situation, and she needs help on all fronts.
And Treasury is much more focused on some of the economic capacity building and helping put together a tax system and those kinds of things. But there's really quite a broad effort.
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