§262p–4c Initiation of Discussions to Facilitate Debt-for-development Swaps for Human Welfare and Environmental Conservation

Summary

The Treasury Secretary must tell the U.S. Executive Director at the World Bank to start talks with the World Bank, the International Development Association, and the International Finance Corporation. The goal is to ask those institutions to give advice and help to countries that want to exchange debt for projects that help people and the environment. The guidance should cover ways (including trust funds) to do these swaps during debt rescheduling while keeping the country’s overall economy stable and keeping the value of the funds received. Congress found that such swaps can cut debt and free money for charity, education, science, conservation, health, farming, microcredit, and local nonprofits, and that debt-ridden countries may want to use them if they do not harm their economy or cause inflation. Debt-for-development swap: a tax-exempt U.S. charity (501(c)(3)) buys or is given qualifying foreign debt and then uses it to support charitable, educational, or scientific work in that foreign country. Qualified debt: includes a foreign government’s sovereign debt, debt owed by private groups in that country, and debt owed by partly private, partly public institutions.