The US House of Representatives yesterday rejected an amendment to foreign aid legislation that would have added $390 million over the next two years for international debt relief. The House action left the US debt relief figure at $69 million.

Treasury Secretary Lawrence Summers and Gene Sperling, President Bill Clinton's economic adviser, said that this would fall short of US obligations under the Highly Indebted Poor Countries (HIPC) initiative launched last year by the world's richest countries (Pauline Jelinek, Associated Press, 13 Jul).

"This is a remarkable moment for the US," Summers said, calling the amount "grossly inadequate." He added, "We are richer than ever before and we are growing faster than ever before. Yet the Achilles' heel for the US is our reluctance to engage adequately in the world."

The United States, whose funding would provide 3% of the debt relief program, is expected to be criticized at next week's annual economic summit in Japan for slowing the process (Stephen Fidler, Financial Times, 13 Jul).

US officials fear this rejection for increased funding will give other nations an opportunity to back down from their own promises, threatening the collapse of the whole initiative (Jelinek, AP).

"Owing to the delay in providing funding for the enhanced HIPC initiative, debt relief for Latin America is stalled," Summers said. "Unless the US funds its share of the initiative, this vital undertaking will stall in Africa" (Fidler, Financial Times).

US Accepts Invitation To Attend Lebanese Donors Conference

The United States accepted an invitation from Lebanon to participate in a donor conference on 27 July in Beirut which will study a plan to rebuild southern Lebanon following the Israeli withdrawal.

"We look forward to cooperating with the government of Lebanon, with the international donor community, with the World Bank and with the UN in working for a well structured well coordinated program which will (bring) the assistance which South Lebanon needs so much," said US Ambassador to Lebanon David Satterfield (Agence France-Presse/Arabia.com, 12 Jul).

Japan Extends Debt Relief To Yemen

Japan extended assistance of more than $3 million in debt relief to Yemen on 3 July.

This grant is based on the resolution by the UN Conference on Trade and Development to adopt debt relief measures for countries facing serious difficulties in servicing their debts (Sana'a Yemen Times, 10 Jul).