Over the past year, the U.S. Congress and the administration have wrestled with how best to help nations facing ruin because of major financial crises or astronomical debt burdens. As chairman of the Senate Banking Committee, there is one principle on which I have not been willing to compromise: U.S. aid must help nations solve -- not repeat -- their problems.

Too often, U.S. assistance is not used to lift the world's poor out of grinding poverty but is wasted on bureaucrats and tyrants, condemning their citizens to a continuing downward spiral of poverty. We need to stop squandering our money and start focusing it where it can make a real difference to millions of poor around the world. To break the recurring cycle of poverty, we must reform the International Monetary Fund by refocusing its priorities and returning it to its original mission. And we must ensure that the benefits of IMF-related debt relief go to the people of desperately poor countries, not to the corrupt elite who run them.

A LOOK AT IMF'S MISSION, PRIORITIES

Reform of the IMF is the critical first step. As a very large contributor to the IMF, the United States is not getting a good return on its investment. IMF crisis lending packages have grown larger, longer, and more frequent, with few economic or developmental results in the recipient countries to show for it. Many of my constituents in Texas would say that this investment doesn't pass the common-sense test.

The Congress proposed some basic reforms in 1998, when we provided $18,200 million of U.S. taxpayers' money for the IMF. In exchange, we insisted that the IMF place a priority on market-oriented reforms and good governance measures, to make sure the world's poor receive the benefits of the IMF assistance. Some progress has been made. But for the most part, we are still waiting for the IMF to get to work and for the reforms to take hold.

Over the past year, I have been pushing for an even more basic reform: re-assertion of the IMF's original mission. If we want to make sure the world's poor (and U.S. taxpayers) get a good return on our investment, it seems to me that the United States should clearly define the mission we want the IMF to perform. That mission should be close to that originally envisioned for this organization. Under the Bretton Woods accord, the IMF started out with a mandate to make short-term liquidity loans to try to keep fixed exchange rates fixed. But like all government agencies, national and international, when that was no longer their mission, they redefined their mission and expanded it over time.

Today, the IMF spends its time dealing with major currency crises in the developing world through long-term, often concessional loans. The terms of these loans stretch on for years. Seventy nations have been in debt to the IMF for more than 20 years. In March 2000, a congressionally authorized advisory commission on international financial institutions, known as the Meltzer Commission, submitted a report to the U.S. Congress on the IMF and the development banks. As the commission pointed out, the IMF's mission creep has made poorer nations increasingly dependent on the IMF without promoting their economic progress.

This debt-driven cycle of poverty will not be broken until the IMF reforms both its priorities and its mission. To reform its priorities, the IMF should fully implement the congressionally proposed reforms of 1998. By pressing nations for market-oriented policies that encourage economic growth and democracy and discourage corruption, we can help ensure that the citizens -- rather than the ruling elite -- see the benefits of the IMF assistance.

To reform the IMF mission, I have proposed three steps. The first of these is to refocus the IMF on its core mission of short-term lending to address financial and monetary instability, and removing the IMF from the development assistance business (a job for which the World Bank is better suited). Second, cap and start phasing out existing long-term lending programs. Third, set interest rates on IMF loans that reflect the lender-of-last-resort nature of IMF resources, so that nations are encouraged to use private sources of funding first. With these changes, the world's poor can see some meaningful relief.

DEBT RELIEF

We need similar reforms when it comes to debt relief under the multilateral Heavily Indebted Poor Countries (HIPC) initiative. To date, 22 desperately poor countries -- Benin, Bolivia, Burkina Faso, Cameroon, Guyana, The Gambia, Guinea, Guinea-Bissau, Honduras, Madagascar, Malawi, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Sao Tome and Principe, Senegal, Tanzania, Uganda, and Zambia -- have qualified for relief amounting to more than $30,000 million. Another 11 may qualify in the future.

These 33 countries have borrowed money from the United States and others. Often, the money has been squandered on programs that have been rejected all over the world; too many times, it was stolen outright by bureaucrats or tyrants. But these countries petitioned the United States repeatedly for debt forgiveness, and last year, Congress finally agreed. Congress provided $435 million for U.S. participation in the HIPC initiative and authorized the IMF to use the proceeds from IMF gold sales for its participation.

In College Station, Texas, where I am from, it is pretty hard to gain support for forgiving billions of dollars of debt to countries that took the money and threw it away. Even so, I was willing to write off these loans because I believed that the rational policy for the United States was to write off loans to desperately poor countries that haven't a prayer of paying the loans back.

But I didn't support the final agreement last year to approve the debt relief funding. I didn't support it because it did not even attempt to guarantee that the fruits of the debt relief would flow to the people, not the government, of the receiving nations. The Clinton administration promoted the debt relief effort as "good financial practice" and "the right way to reduce poverty." That may have been the intent. But without guarantees of how the nations' now-freed-up resources are to be used, there is a high risk that they will end up subsidizing government corruption in places like The Gambia and Cameroon, or violence in war-torn nations like Chad, instead of breaking the cycle of poverty that traps their citizens.

I believed then and I still believe that if we are going to cancel nations' debt, we should make sure the benefits go to the people who live in those countries and not to the corrupt elite who run them. Otherwise, our goodwill gesture will be nothing more than throwing good money after bad. Others have reached the same conclusion that I have.

CONDITIONS FOR DEBT FORGIVENESS

One example of my concern: On the very same day that Uganda, one of the initial countries targeted for debt forgiveness, qualified for debt relief, its president bought himself a $32 million luxury Gulf Stream jet to get himself around the country. The "good" news appears to be that the jet originally was to have cost $47 million. But that pales beside the bad news, which is, of course, that $32 million might have done hard-working, poor Ugandans a lot of good if used to promote economic growth instead.

Another example: Chad, a nation that may qualify for HIPC relief, is prominent in the State Department's annual report on human rights abuses. The latest State Department report notes that state security forces in Chad continue to commit extra-judicial killings and to torture, beat, abuse, and rape persons. I am not in favor of providing debt relief to a government guilty of the torture, beatings, abuse, and rape of its own people.

It is true that elected civilian governments are increasingly common, but not in many of these countries. And there may be new ways to keep our money from subsidizing war budgets or dictators' Swiss bank accounts, but the IMF won't use them. The result may be continued war, theft, and brutality -- and continued misery on a continental scale.

I viewed the solution on debt relief as the same solution American families use when the bill collector comes knocking at their door: they figure out how much they are making and how much they are spending, and decide what changes they will make to get themselves solvent again. In other words, they change their habits and they change their behavior.

So I proposed that we condition debt forgiveness on two points: first, that no forgiveness be allowed for any nation whose government engages in gross violations of human rights, and, second, that the nation receiving forgiveness must establish market-based benchmarks to measure progress on economic and good governance reforms. I believed that this was the most effective way to ensure that the U.S. contribution would break the recurring misery of these nations' citizens. This was my proposal when debt relief funding was voted on last year, and it continues to be.

BREAKING THE CYCLE OF POVERTY

Millions of people around the world live in grinding poverty and misery. They deserve better from their leaders. Through IMF refocus and reform, their governments might have learned that adopting market-oriented structural measures that will promote economic growth and good governance is wiser than continuing socialist approaches that deny economic freedom and promote dependence on IMF and foreign loans. Through international debt relief conditioned upon channeling the newly available resources to productive use, their governments might have promoted a better standard of living for their people.

I regret that neither IMF reform nor debt relief guarantees made great strides forward last year. For the sake of the world's poor, I hope that economic progress will be made nonetheless. Meanwhile, I intend to keep fighting to see that U.S. aid helps nations break -- not repeat -- the cycle of poverty.

(Note: The opinions expressed in this article do not necessarily reflect the views or policies of the U.S. Department of State.)