Congresswoman Waters Expresses Concern About Food Crisis and Debt Burden Affecting Poor Nations
Criticizes Policies of World Bank as Harmful
Congresswoman Maxine Waters (D-CA) expressed concern for poor nations suffering from both the global food crisis and burdensome international debt and called for the World Bank to enact policies that are fairer and more effective in addressing the problems of such countries. She spoke today during a hearing of the House Financial Services Committee, on which she serves, regarding U.S. contributions to the World Bank's International Development Association (IDA) and the African Development Bank's African Development Fund (AfDF).
"Clearly, the World Bank needs to change its approach to agricultural development," Congresswoman Waters said.
The World Bank has imposed significant requirements on the agricultural sector of developing countries as a condition for their receiving loans. However, these requirements - such as eliminating government subsidies for seeds and fertilizer and assistance with marketing, food storage and distribution as well as lowering tariffs on agricultural imports - have dramatically reduced local farm production and made people more dependent on foreign sources of food. Congresswoman Waters cited numerous examples in Africa and Latin America of the decline of agriculture that has resulted and the subsequent vulnerability of populations to rising food prices. In contrast, she noted that Malawi's agricultural output has increased enormously since the government decided to ignore the World Bank's advice and reinstate fertilizer subsidies.
Congresswoman Waters, a longtime leader of efforts to reduce the financial burden on poor countries, also reiterated the importance of helping them climb out from under the mountain of debt owed to multilateral financial institutions like the World Bank. She specifically recommended an immediate suspension of debt payments from ten heavily indebted poor countries to the World Bank and other multilateral lenders. These ten countries are already in line to receive debt cancellation, but they are currently required to continue making debt payments to the World Bank while implementing the World Bank's conditions for debt cancellation. Among the countries in this predicament are Haiti and Liberia, two of the most impoverished countries in the world.
"Given the severity of the global food crisis, it is both unjust and unwise to require countries that are doing their best to implement World Bank conditions to continue making debt payments to the World Bank while their people go hungry," she said.
Congresswoman Waters introduced the Jubilee Act (H.R. 2634), legislation to expand debt cancellation for the world's poorest countries, and the House of Representatives passed it earlier this year.
"The expansion of debt cancellation programs is one important way to address the global food crisis. Money that poor countries must spend on debt payments is money they cannot spend purchasing food or developing agricultural capacity," she said.