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NGO: Nepal Needs Debt Relief

Local residents clear the rubble from their homes which were destroyed after last week's earthquake in Bhaktapur, Nepal, May 4, 2015.

A group of international aid, religious and other groups are calling for debt relief for Nepal following the devastating earthquake that killed more than 7,000 people and left thousands more injured or homeless.

Jubilee Network USA is a coalition of religious and relief groups that works to eliminate extreme poverty. Coalition Executive Director Eric LeCompte says Nepal was repaying $220 million a year to international lenders before the quake. He says money for further repayments should go to repair, rebuild, and help the nation recover.

LeCompte says international lenders previously cut debts owed by the West African nations devastated by the Ebola crisis. He says the debt relief programs he has in mind come with requirements for greater transparency and accountability. He says that means the money that would have gone to repayment goes to the most vulnerable citizens, rather than tax benefits for companies or to bolster the military.

The International Monetary Fund’s Gerry Rice says the agency will dispatch experts to assess Nepal’s needs “as soon as the humanitarian situation subsides.” He says in disaster cases, the IMF typically provides medium and long-term financing to help rebuilding efforts and offers technical support.

Nepal has nearly 28 million people and before the devastating quake, its economy was growing at a better than a five percent annual rate according to the World Bank. The loss of thousands of lives, and widespread damage to roads, buildings, and other infrastructure seems likely to hurt growth. The average income is just $730 a year, and a quarter of Nepal’s population lived in poverty.

Nepal also owes money to the World Bank and the Asian Development Bank, and LeCompte says his organization is trying to persuade those agencies to do more ease the burden on Nepal.