People looking to fix bad credit and get excited about American democracy in an election year neednt look further than the current proposals on poor country from multilateral institutions being put forward by the presidential campaigns. This has gone from an issue that concerned only a few committed activists to one that engages the political mainstream.

The Bush administrations initial proposal as reported in the press was the first to offer specifics, offering 100% cancellation for around 30 nations considered Highly Indebted Poor Countries (HIPC).  Most of this would be funded through the World Bank and International Monetary Fund (IMF)s existing gold and cash reserves.  The Presidents proposal would also convert World Bank loans to interest-free grants, according to reports from recent civil society  meetings with the U.S. Treasury Department.

Not to be outdone, Senator John Kerry recently called attention to his own campaigns proposal, which calls for the same end goal on but includes more countries.  The Kerry initiative also notes that deeper cancellation should not come at the expense of future foreign aid flows topoor countries and suggests such measures can be made through modifying the [existing] Enhanced Highly Indebted Poor Countries Initiative.

Support from other G-7 countries is needed for either proposal to become policy.  Recent press reports suggest that there may be some support in Europe, as UK Chancellor of the Exchequer Gordon Brown backed the goal of poor country cancellation, and suggested that British taxpayers would foot 10% of the bill.  Whatever the outcome, the topic of cancellationwill continue to loom large well beyond the U.S. elections.

FPIF (online at ) analyst Todd Tucker works with the for Economic and Policy Research in Washington, DC, and writes frequently on trade, development and economic implications of foreign policy issues.  For more information on CEPRs work, please visit .

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