Global Policy Forum

In 1996 the World Bank and the International Monetary Fund began a program that was supposed to help the world's poorest nations escape their debt traps. Dozens of nations spend up to 60 percent of their budgets for interest on foreign debt that will never be retired -- leaving little for the basic health care and education needed to reduce poverty. But the debt reduction program has been too stingy. This month the world's richest countries will decide how much to increase it. The proposals offered fall far short of real relief.

Debtor countries, mostly African, largely owe money that lenders pushed on eager governments decades ago, in part to cover commercial loans. The current relief program has several problems that the wealthy nations, known as the G-7, say they want to fix at their summit meeting in Cologne, Germany, on June 18. One is that the standards for qualifying -- six years of adherence to an I.M.F. reform and austerity plan -- are so strict that only Uganda and Bolivia have seen any reduction in their payments, and that has been negligible. Another is that the I.M.F.'s austerity requirements have forced countries to cut basic social services.

Washington's limited plan, which will probably win support from the other G-7 countries, would allow countries to qualify for debt relief more quickly, focus the I.M.F. on the importance of spending on the poor, and allow several new countries to qualify. The Administration says a wider plan is unlikely to win over Congress or other nations -- Japan and France are the biggest creditors.

Congress may be more supportive than the Administration thinks. About 50 House members from across the spectrum back a plan sponsored by Jim Leach, an Iowa Republican, to provide deeper relief and help insure that the money is better used. A Harvard economist, Jeffrey Sachs, argues that the World Bank and I.M.F. have the reserves to forgive all they are owed by poor nations. Debt forgiveness must go to those who earn it through sound economic policies and well-targeted social programs, but the Administration's proposal would allow only a handful of countries to spend more on basic health and education needs. It is heartless to argue that the United States or the I.M.F. cannot afford to lift a burden now borne by the children of Mali or Zambia.

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