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Secretary Paulson today announced he will work with Congress to provide debt reduction for Liberia:
I had the honor of meeting with Liberian President Johnson-Sirleaf this week to discuss her strong efforts to rebuild Liberia after its devastating civil war. Since her election in January 2006, President Johnson-Sirleaf's government has focused on Liberia's reconstruction while demonstrating its commitment to economic and political reforms. I applaud these reform efforts and we will work with the international community to find ways to eliminate Liberia's debt burden, which will allow Liberia to normalize its relations with the multilateral donor community, gain greater access to desperately needed development assistance, and put its finances on a more sound footing. We call on other countries to make similar commitments.
Secretary Paulson today requested that Congress authorize the use of up to $35 million in debt reduction funds provided for in legislation now under consideration by Congress to help fund the costs of forgiving Liberia's debt to the international financial institutions.
At this time, the Administration is prepared to:
- Forgive our $391 million in claims on Liberia under the Heavily Indebted Poor Country (HIPC) framework. We requested funding in the FY08 budget to cover the start of that process.
- Set aside $15 million to contribute to forgiving Liberia's debt to the African Development Bank.
- Redirect more than $150 million in funds held by the IMF as a contribution to forgiving Liberia's debt to the IMF, in consultation with Congress.
Previously, the United States has given generously to the Liberian government's efforts to provide basic services to its people such as restoring electric power and running water, and building roads, schools, and health clinics:
- The U.S. has provided more than $500 million of development assistance to Liberia over the past three years, accounting for more than half of total bilateral development assistance received by Liberia during that time.
- In the FY07 and FY08 budgets, we have requested more than $200 million for Liberia.
Background
Liberia's debt equals $3.7 billion. More than $1.5 billion of that debt is in arrears to the international financial institutions (World Bank, IMF, and the African Development Bank). The vast majority of the arrears can be eliminated using internal resources at these institutions, but some additional funding will be needed from donors.