Date: Sun, 15 Nov 1998 16:42:43 -0500 (EST)
From: "Vera M. Britto" <fiatlux-AT-umich.edu>
Subject: [Fwd: No Recovery from Mitch Without Debt Cancellation] (fwd)


                    CENTRAL AMERICA CANNOT RECOVER
                        FROM HURRICANE MITCH 
                      WITHOUT DEBT CANCELLATION

Call on the United States and the multilateral financial institutions 
to do their part to remove the obstacle that promises to doom all relief
efforts.

Relief funds and supplies are pouring into Central America in the wake
of
the incredible devastation of Hurricane Mitch.  The response is
heartening.
But for the people of Honduras, Nicaragua, El Salvador, and Guatemala,
this
aid will be meaningless unless their foreign debt burdens are
eliminated.

For many years these countries have labored under crushing external
debts.
Honduras and Nicaragua, the two countries most badly affected by the
hurricane, have qualified in the last couple years for consideration for
some "debt relief" under programs for the very poorest countries in the
world.  In light of Hurricane Mitch, which has left more than 25,000
people
in the two countries dead or missing, put hundreds of thousands at risk
of
malaria and other diseases, and rendered about a quarter of the combined
population of Nicaragua and Honduras -- over two million people --
homeless,
incremental reductions would be grossly insufficient.  

Even as international relief pours in, Honduras is obliged to pay back
more
than $1 million each day, and Nicaragua nearly that amount.  To rob
these
countries of their scarce resources at the same time we supply them with
emergency relief is illogical and immoral.  And long after the relief
efforts end, the daily demand on these economies will persist.  That
means
that actual recovery from this disaster, which has in one week robbed
these
countries of perhaps half their Gross National Products, will never
happen.
Re-scheduling the debt or a temporary moratorium would only postpone or
draw
out the pain.  Full debt cancellation is the only solution.

Cuba and France have cancelled all debts owed them by the countries.
Austria, Norway, Spain, and many other countries have pledged partial
relief.  But the United States, the richest country in the world and the
most influential in terms of setting international debt policies, has
made
no commitment.  While it committed hundreds of millions to providing
arms
during the Central American civil wars of the 1980s, it has not even
addressed the issue of the debt burden in Central America.

Please send the following letter to President Clinton and Treasury
Secretary
Robert Rubin, or write one of your own.  Send copies to the heads of the
multilateral financial institutions (the Inter-American Development Bank
--
which holds more of these countries' debts than anyone else -- the
International Monetary Fund, and the World Bank).  Debt cancellation is
the
only medicine that can save these desperate economies.

Alliance for Global Justice; Columban Justice & Peace Office; Democratic
Socialists of America; EPICA; Essential Action; 50 Years Is Enough
Network;
Friends of the Earth; Guatemala Partners; Jubilee 2000/USA; NETWORK: A
Catholic Social Justice Lobby;  Network in Solidarity with the
Guatemalan
People (NISGUA); Nicaragua Network; Nicaragua-U.S. Friendship Office;
Preamble Center for Public Policy; Public Citizen's Global Trade Watch;
Quest for Peace; and Witness for Peace

Contact: Nicaragua Network / Alliance for Global Justice
1247 E Street, S.E. - Washington, DC  20003 - 202/544-9355 -
nicanet-AT-igc.org


==============================================================================President Bill Clinton                          Treasury Secretary
Robert
Rubin
The White House                                 Department of the
Treasury
Washington, DC  20500                           Washington, DC  20220
Fax: 202/456-2461                                       Fax:
202/622-0073

Dear Mr. Clinton and Mr. Rubin:

With Hurricane Mitch, Honduras and Nicaragua, two of the poorest and
most
indebted countries in Latin America, have been hit by what may be the
worst
disaster they have ever faced. In response to the humanitarian
emergency,
we
call for the immediate and unconditional cancellation of the external
debt
repayment obligations of both countries, and substantial debt reduction
for
El Salvador and Guatemala, both also severely affected by the hurricane.
The
disaster has removed the ability of these countries to repay external
debt.
All available resources should be used to address to the needs of the
population in this crisis. Recent press reports indicate that the
reconstruction effort will cost billions and take many years.

The bilateral debt of these countries owed to the United States should
also
be canceled immediately. Former Presidents Bush and Carter have both
called
for immediate action on the debt issue in the wake of the crisis. Both
France and Cuba have already erased the debts owed them by these
countries,
and other creditor nations are supporting debt cancellation. But the
U.S.
has remained silent on the need for debt cancellation. We emphasize that
debt cancellation must not be conditioned on compliance with IMF
structural
adjustment programs or similar demands. Demands for government austerity
are
surely inappropriate in the face of sudden and massive homelessness,
disease, and hunger.

This disaster will take the affected nations, already among the poorest
countries in Latin America, decades to overcome. Broad coalitions of
social
organizations in Central America have called for cancellation of debt.
Half-measures such as debt re-scheduling or a "debt moratorium" would be
insufficient.  Anything less than cancellation of the monumental,
unpayable
debt burden would extend and deepen the suffering of the victims. 

It is disgraceful that the United States, the richest and most powerful
country in the world, and the most influential in terms of economic
policies
such as debt relief, has made no commitment, indeed said nothing, about
the
Central American debt in the wake of Hurricane Mitch.  It is astounding
that
we could be mounting international relief efforts while still insisting
that
these countries pay back interminable debts.  Please do what is
necessary
to
make the United States a true leader in making recovery possible for the
people of Central America.

Sincerely,      


cc:  Enrique Iglesias, President             Michel Camdessus, Managing
Director 
     Inter-American Development Bank            International Monetary
Fund
     1300 New York Ave., N.W.                   700 19th St., N.W.
     Washington, DC  20577                      Washington, DC  20431
     Fax:  202/623-1799                         Fax: 202/623-4661
                        James Wolfensohn, President 
                        World Bank Group
                        1818 H Street, N.W.  
                        Washington, DC  20433
                        Fax: 202/522-0355