VZCZCXYZ0003
OO RUEHWEB

DE RUEHC #4427 3410025
ZNR UUUUU ZZH
O 070006Z DEC 07
FM SECSTATE WASHDC
TO USMISSION USUN NEW YORK IMMEDIATE 0000

UNCLAS STATE 164427 
 
SIPDIS 
 
SIPDIS 
USUN FOR MICHAEL SNOWDEN 
 
E.O. 12958: N/A 
TAGS: EFIN EAID AORC UN
SUBJECT: UNGA:2-C INSTRUCTIONS TO JOIN CONSENSUS ON DEBT 
RESOLUTION 
 
 
¶1.  This is an action request. 
 
¶2.  USUN is instructed to join consensus on the following 
draft resolution: "External debt and development: Towards a 
durable solution to the debt problems of developing 
countries." The Department congratulates USUN negotiators for 
their successful efforts to bring considerable balance to 
this year's resolution on debt.  You have managed to focus 
discussion away from calls for additional debt forgiveness to 
the crucial challenges of improving debt management capacity, 
reinforcing national responsibility for sound debt policy, 
and recognizing the need for greater transparency and 
accountability in public debt management.  You have also 
gotten member states to take stock of the significant 
progress made in relieving the debt burdens of the world's 
poorest countries.  Addressing developing country concerns on 
debt in this cooperative and constructive manner will be 
important as we begin the process in the coming year of 
reviewing and assessing progress in realizing the Monterrey 
Consensus on financing for development.  USUN should 
reinforce these points in a plenary statement that draws on 
the text provided in para. 3 below. 
 
¶3.  Points for an explanation of position on the debt 
resolution when it is taken up in Second Committee plenary: 
 
-- The United States is prepared to join consensus on this 
resolution.  We strongly support the Monterrey Consensus that 
affirms that debt is an important part of the development 
finance equation, and that debt sustainability requires 
national strategies for managing liabilities, as well as good 
governance and sound domestic macroeconomic policies. 
 
-- Much has been done to address the debt problems of 
developing countries in the past few years.  The Multilateral 
Debt Relief Initiative has provided 24 debtors nearly $42 
billion in debt forgiveness.  In addition, creditors 
participating in the Heavily Indebted Poor Countries (or 
HIPC) initiative have granted an additional $45 billion in 
debt relief to 22 countries that have successfully completed 
targeted poverty reduction strategies.  Another 9 countries 
have entered the HIPC process, and should benefit from an 
additional $18 billion in HIPC debt relief upon completion of 
economic reform programs. 
 
-- The U.S. has been a leader in promoting debt relief to 
eligible Heavily Indebted Poor Countries and to the 
low-income countries included in the Multilateral Debt Relief 
Initiative.  Indeed the U.S. goes beyond the HIPC framework 
to forgive 100 percent of eligible bilateral debts for 
countries that meet their commitments under the HIPC 
initiative.  We have also supported an increase in 
grant-based financing in countries that are unable to secure 
adequate financing because of their economic situation. 
 
-- We are pleased that member states began to recognize those 
accomplishments in this year's resolution.  In confronting 
difficult challenges, such as a debt crisis, it is important 
that we periodically take stock of our progress, while at the 
same time renewing our commitment to tackling the challenges 
of the future. 
 
-- While we have moved beyond a state of crisis in debt 
sustainability, we recognize that there are still many 
significant debt challenges facing individual countries and 
the international community collectively.  Countries, 
particularly those benefiting from debt relief, must 
strengthen their capacity to manage debt and recognize this 
task as an important part of fiscal policy.  As the 
resolution notes, part of the solution is the establishment 
of transparent and accountable debt management systems. 
Helping countries to build the capacity to do this work is an 
important part of the UN's activities.  The United States 
recognizes that the UN Trade and Development Conference plays 
a significant role in this area, providing capacity building 
support that we should acknowledge and further encourage. 
 
-- We also want to underscore that debt relief programs must 
focus on poor countries suffering from unsustainable debt. 
Efforts to extend these specialized debt relief programs to 
middle-income countries distracts from needed efforts to 
implement fully the HIPC and MDRI initiatives and to ensure 
that assistance funds are first directed to the most needy. 
In the absence of debt relief, sound debt management has its 
own reward in a lower price of debt financing for development. 
 
-- This resolution on international debt management and 
sustainability calls on member states to foster the political 
will among creditors, both public and private, to provide 
comparable treatment to debtor countries that have already 
worked out sustainable debt relief agreements with the 
majority of its creditors.  By urging comparable treatment, 
the UN is helping countries that seek to manage their debt 
responsibly and to use the resources freed to invest in 
development and poverty reduction. 
 
-- The United States congratulates our development partners, 
both creditors and debtors alike, for their cooperative 
spirit in tackling the challenges of debt sustainability for 
development and urges continued meaningful discussion and 
support for effective debt management. 
RICE