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Jubilee 2000/USA Condemns New Loan Program for AIDS Drugs

Campaign calls for debt cancellation, plus grants for prevention, testing and treatment programs, improvement and construction of health care facilities, and the provision of generic medicine.                        

On July 19, 2000, the US Export-Import Bank announced a pilot program to finance $1 billion per year in exports of HIV- and AIDS-related pharmaceuticals and supplies to Sub-Saharan Africa.

Under this program, major U.S. drug companies will offer their name- brand products at a discount, and Ex-Im Bank will finance their export with five-year loans to 24 eligible countries. Most of the loans are expected to carry an interest rate of about 7 percent.

The price of various so-called combination therapies of drugs, which can substantially prolong the lives of HIV patients, range between $10,000 and $15,000 each year per patient. Drug companies are expected to reduce those prices to between $1,000 and $2,000 per patient in sales to impoverished countries.  The U.S.-backed loans would then finance the purchase of the drugs by African countries at those lower prices.

Jubilee 2000/USA condemned the new loan program, calling it, "a repeat of the flawed loan schemes and tied aid that have led to the current debt crisis...Even if US pharmaceutical companies sell their products at a discount, they are still unlikely to be affordable for the average African afflicted with HIV/AIDS."  The plan "would significantly increase an overwhelming debt burden that is already crippling economies, destroying health care systems, and closing schools."

Jubilee 2000/USA called, instead, for debt cancellation.  "Such debt cancellation could relieve these countries of tens of billions in debts - far more funding than is currently being proposed in any HIV/AIDS response initiative.  The US and its allies should also address the HIV/AIDS pandemic with other real solutions, such as grants for prevention, testing and treatment programs, improvement and construction of health care facilities, and the provision of generic medicines.  The Export-Import Bank loan scheme is part of the problem, not the solution."

More than 13 million Africans have died from AIDS and nearly 24 million people on the continent have either HIV or AIDS. More than two-thirds of those with AIDS live in the sub-Saharan region and economists have said the escalating epidemic is the biggest threat to the continent's economy.

What is the Ex-Im bank?  The Ex-Im Bank is an independent U.S. government agency established in 1934 to create US jobs through exports.  Using funds from the federal government, it helps finance the sale of U.S. exports primarily to countries considered "emerging markets" throughout the world, by providing loans, guarantees, and insurance.  In October 1997, Congress reauthorized Eximbank's operations until the year 2001.

Learn more about HIV/AIDS in Africa, and about the loan program, from web links at the end of this message!

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Jubilee 2000/USA Statement: 

Jubilee 2000/USA Denounces New Export-Import Bank Loan Initiative Loans for HIV/AIDS will increase debt, undermine cost effective treatment
 
Jubilee 2000/USA denounces the recently announced initiative of the United States Export-Import Bank regarding HIV/AIDS.  This new initiative would provide loans at commercial interest rates to African nations suffering from the scourge of HIV/AIDS so that these nations could purchase treatment drugs from US pharmaceutical companies.  These loans would have a repayment term of five years. 

Jubilee 2000/USA condemns this initiative on several counts.  These loans will perpetuate the destructive cycles of indebtedness.  Our platform specifically speaks to the need for lenders to also bear responsibility for debts.  This initiative is a repeat of the flawed loan schemes and tied aid that have led to the current debt crisis.  The US government is rightly seeking debt cancellation for many of these countries, yet this program would significantly increase an overwhelming debt burden that is already crippling economies, destroying health care systems, and closing schools. Many of these countries suffering from the HIV/AIDS pandemic are so poor they cannot borrow at commercial rates, and instead receive grants or concessional lending from donor agencies.  The HIV/AIDS pandemic is a humanitarian crisis, not a marketing opportunity for US pharmaceutical products.

Since the first AIDS deaths were recorded in the 1980s, 83 percent of these deaths have been in sub-Saharan Africa, and 95 percent of the world's AIDS orphans are Africans.

The Export-Import Bank program would require African nations to purchase HIV/AIDS drugs from US pharmaceutical companies.  Thus, the primary beneficiaries of this program will be US pharmaceutical companies, not the poor of Africa.  This initiative also draws attention from the critical issue of HIV/AIDS drug prices.  Rather than provide access to new resources, it may instead pressure African nations not to purchase cheaper, generic drugs to fight HIV/AIDS.  Even if US pharmaceutical companies sell their products at a discount, they are still unlikely to be affordable for the average African afflicted with HIV/AIDS. 

The international campaign to cancel the crushing debt of the world's impoverished countries has forced the United States and its rich allies in the Group of Seven to take steps to address the crippling debt burden.  The richest nations also pledged at their recent summit new resources to fight HIV/AIDS in the poorest countries. 

The world's rich nations should live up to their promises.  In this Jubilee year, they should cancel the debts of indebted, impoverished nations.  This debt cancellation would free up resources that could be dedicated to health care programs and the prevention and treatment of HIV/AIDS more specifically.  Such debt cancellation could relieve these countries of tens of billions in debts- far more funding than is currently being proposed in any HIV/AIDS response initiative.  The US and its allies should also address the HIV/AIDS pandemic with other real solutions, such as grants for prevention, testing and treatment programs, improvement and construction of health care facilities, and the provision of generic medicines.  The Export- Import Bank loan scheme is part of the problem, not the solution.

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Resources and background info on the web:

The impact of HIV/AIDS and crushing debt on Africa:

    UNICEF says the AIDS epidemic is the greatest health crisis facing the world's children today, and every country, international organization and business must unite to combat it; UNICEF says in the first 10 months of 1998, 1,300 teachers in Zambia reportedly died of the disease, two-thirds the number of new teachers trained a year:

   
http://abcnews.go.com/sections/living/DailyNews/aids_unicef0712.html

    The UN says the AIDS epidemic is expected to wipe out about half the current population of teenagers in the worst-hit African nations, devastating economies and shattering societies.  The United Nations says $4 billion per year in assistance needed to fight AIDS in Africa and calls for debt relief:

    http://abcnews.go.com/sections/world/DailyNews/aids000627.html

    UN report, issued June 27, 2000, estimates over One-third of Today's 15-year-olds Will Die of Aids in Worst-affected Countries -- for info click on http://www.africapolicy.org/docs00/hiv0007.htm

    Zambian doctors fired while AIDS epidemic rages:

    http://dailynews.yahoo.com/h/nm/20000720/hl/aids_zambia_1.html

    The connection between HIV/AIDS and crushing debt:

    http://www.j2000usa.org/debt/aids.html

        Uganda says HIPC debt reduction program will allow it to    redirect $110 million to fight HIV/AIDS over three years:

http://www.unaids.org/whatsnew/others/sat_meetings.html#IPAA

US government assistance to fight HIV/AIDS:

    Senate passes authorization of initial funding for trust fund to combat AIDS and HIV!

    http://dailynews.yahoo.com/h/nm/20000727/hl/africa_2.html

The Export-Import Bank's loan program:

    The Export-Import Bank's description of the program:

    http://www.exim.gov/press/jul1900a.html

    A coalition of AIDS activists protested the plan:

    http://dailynews.yahoo.com/h/nm/20000720/hl/aids_loan_1.html

    Oxfam Great Britain also criticized the program:

    http://www.oxfam.org.uk/storage.cgi?id=1111&type=pr&wf=1

    A news story summarizing the debate over the program -- click
on:
   
http://abcnews.go.com/sections/politics/WhitehouseWag/wag000727.html

    The British newspaper, the Guardian, covered the story:
   
http://www.guardianunlimited.co.uk/Archive/Article/0,4273,4043301,00.h
tml

    More perspectives on the Ex-Im Bank:

    http://www.igc.org/infocus/briefs/vol4/v4n18exim.html

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The underside of the booming economy is the growing problem of hunger in the US. One in 10 families cannot afford the food they need. Fewer people are eligible for food stamps. Many of those who depend on food stamps and other assistant programs are not sharing in current economic benefits; charities and food banks providing the additional assistance are finding their resources strained. The Hunger Relief Acts (S. 1805 and H.R. 3192) are bipartisan efforts to remove many barriers that prevent those in need from participating in the Food Stamp Program and help close the gap between need and assistance. Low-income legal aliens would be eligible to receive food stamps. More money would also be available to food banks with emergency services. Both bills have large bipartisan support, but some predict that much of what is in this legislation will be attached to an end-of-the-year spending bill, and with that, some of the provisions in the bills may be dropped, making the Hunger Relief Act less effective in combating hunger. Contact your Senator or Representative; urge them to support this act if they have not already done so.

Brother Leo Shea, F.M.S.
NARB J/P

 

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Some questions from the US Bishops "Faithful Citizenship" document:
How will we protect the weakest in our midst--innocent, unborn children? How will we address the tragedy of 35,000 children dying every day of the consequences of hunger, debt, and lack of development around the world? How will we address the growing number of families and individuals without affordable and accessible health care? How can health care protect and enhance human life and dignity? How will our society best combat continuing prejudice, bias, and discrimination, overcome hostility toward immigrants and refugees, and heal the wounds of racism, religious bigotry, and other forms of discrimination? How will our nation resist what Pope John Paul II calls a growing "culture of death"? Why does it seem that our nation is turning to violence to solve some of its most difficult problems -- to aboriton to deal with difficult pregnancies, to the death penalty to combat crime, to eithanasia and assisted suicide to deal with the burdens of age and illness?

Brother Leo Shea, F.M.S.
NARB J/P

 

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Sign The Rainforest Site Petition, which will be delivered to the United Nations Commission on Sustainable Development this Fall 2000. The petition urges the UN to enforce the international community’s political and legal commitments to protect the rainforests. All you have to do is click on the link below to sign up - and don't forget to pass this e-mail along to all of your friends http://www.therainforestsite.com/rbt/TRSPetition/r061322
    Thought you might want to help.

Bro. Warren Perrotto, MSC

 

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