(no subject given)

[Karen Cromley]

Dear Friends,

The following letter has been signed by AFSC executive director Kara Newell
and 70 leaders of religious organizations and congregations. It is a call
for the U.S. to offer temporary debt relief to Peru and Ecuador, so that
necessary relief and reconstruction following El Ni=F1o can take place. The
U.S. has the largest bi-lateral loans to these countries. Other members of
the Paris Club who have bi-lateral loans to Peru and Ecuador are being
approached by organizations in their own countries.

The idea surfaced at the February Peru Peace Network meeting and was
developed in coordination with Human Rights organizations and economists in
Peru and Ecuador. There was particular concern to support relief for both
countries as a way of lending support to their efforts to resolve their
border conflict. The U.S. is one of the guarantor nations in this process.

AFSC's Andean QIARs (Quaker International Affairs Representatives) helped
gather some of the local information on the destruction caused by El Ni=F1o.

Feel free to encourage local groups to write similar letters to President
Clinton.

May 27, 1998
=20
Mr. Bill Clinton
President of the United States
1600 Pennsylvania Ave.
Washington, DC 20500

Dear Mr. President:

We are a group of nongovernmental organizations working in solidarity
for the welfare of the people of Peru and Ecuador. We are writing you to
urge your assistance in the devastation that El Ni=F1o has heaped upon these
two countries.

While the Pacific current has begun to cool and El Ni=F1o is no longer
in the daily news, Peru and Ecuador, the hardest hit countries of Latin
America, continue to assess the damage. Reliable government figures in
both countries are difficult to obtain, but reports from Peru confirm at
least 200 dead and approximately 400,000 flood victims. According to the
government, there are more than 100,000 homes affected, 6,392 kilometers of
highway destroyed, and 87 bridges lost. Peru's fishing industry suffered a
78% decline in January and 80% of the crops in the northern part of the
country have been destroyed.

In Ecuador, the story is similar. CNN has reported that El Ni=F1o in
Ecuador is responsible for 183 deaths, 33 missing, and 91 serious injuries.
More than 30,000 Ecuadorans have become victims of El Ni=F1o. In March,
Ecuadoran newspapers reported that almost 7,500 homes had been destroyed or
damaged. At the same time, the government released estimates of US $1
billion in agricultural crop losses. The major industries of oil, bananas,
and fish have all been severely hit. The highway system on the coast has
completely collapsed. As in Peru, health care workers are now battling
cholera, malaria, dengue, salmonella, and even leprosy. =20

The immediate impact of El Ni=F1o on the economies of Ecuador and Peru=
has
been overwhelming, but the long term effects are equally alarming. In
February, the export of cocoa beans from Ecuador fell more than 60%. The
decline in this and other exports will have a ripple effect throughout the
economy. The Ministry of the Economy of Peru revised its prediction for
the growth in the GDP, reducing it from 5% to 4%. Respected economists in
the private sector predict a growth rate in the range of only 2%. In
Ecuador, international financial companies are the ones predicting a 2%
growth in that economy, less than half of what was originally expected.
The GDP figures will decline even further if, as some forecast, a drought
(La Ni=F1a) occurs in
the wake of El Ni=F1o. =20

Both Peru and Ecuador are historically poor countries. In recent
years, the impact of severe structural readjustment requirements, national
economic policies narrowly focused on exports and foreign investment, and
autocratic government which values patronage over broad-based development
have exacerbated the poverty. The further loss of income and the cost of
reconstruction in the wake of El Ni=F1o will be an unbearable burden if ther=
e
is not some avenue of financial relief for these countries. =20
=20
The interim administration in Ecuador predicts a need for at least US
$2 billion to recover from El Ni=F1o. Estimates in Peru indicate the cost o=
f
recovery in that country could be U.S. $2.5 billion. At the same time,
Peru is obligated to make annual payments of US $1.7 billion on its
bilateral debt. Neither Peru nor Ecuador is capable of paying both. =20

Both Peru and Ecuador need some form of debt relief so that they can
adequately address the suffering and destruction caused by El Ni=F1o.
Therefore, we are asking for a temporary amendment on their bilateral debt
agreement with the U.S. Specifically, we ask that the U.S. offer:

1) an exchange in which obligated foreign debt payments for the years
1998, 1999, and 2000 will be paid into National Reconstruction Fund;
2) or, at least, a deferred payment of the quotas for those three
years. =20

These quotas would be put at the end of the calendar of payments without
any penalties.

We believe that maximum resources should be made available for
reconstruction so the countries can restore their citizens' lives and
livelihood, as well as the infrastructure needed for productive activities.
Full restoration of productive capacity is not only essential to national
recovery today, but fundamental to viable trade partnerships in the future.
It is simply responsible lending to enable the borrower to be restored to
economic health following a disaster. As you said in Cape Town:
"..the trick is to get enough debt relief to countries to get the debt
burden down so that they can grow and they're not crushed..."

We urge that the U.S. use its influence to see that those who suffered
from El Ni=F1o are participants in the design and implementation of their ow=
n
recovery. Their active participation in a transparent and inclusive manner
will ensure better use of resources, and more importantly, rebuild
community and self confidence. Local capacity building and strengthening
of civil society are primary objectives for many donor programs and should
be a part of this action. =20

A similar request is being made of other creditor countries in the
Paris Club. It comes at a time when Ecuador and Peru are committed to a
very important peace process in resolution of their border treaties, of
which the U.S. is a guarantor. It is critical that the international
community make simultaneous gestures of solidarity to these two governments
and their people at this moment. Action such as this will demonstrate the
basic human priorities about which all of us should be vigilant.
=20
As the leader of the nation with the largest bilateral loans to these
countries, you can set an example for other members of the Paris Club. By
calling for a moratorium on bilateral debt repayment, you can demonstrate
that productive economic measures and active humanitarian concern can be a
part of the same policy. It is simply in the best interest of the people
of Peru and Ecuador, as well as the future of U.S. economic relations with
these two countries.
=20
Respectfully,

Mark Saucier/Alice Wolters
National Coordinators
Peru Peace Network/USA