Relatively least developed countries (as determined on the basis of criteria comparable to those used for the United Nations General Assembly list of “least developed countries”) are characterized by extreme poverty, very limited infrastructure, and limited administrative capacity to implement basic human needs growth strategies. In such countries special measures may be necessary to insure the full effectiveness of assistance furnished under subchapter I of this chapter.

For the purpose of promoting economic growth in these countries, the President is authorized and encouraged to make assistance under this part available on a grant basis to the maximum extent that is consistent with the attainment of United States development objectives.

The Congress recognizes that the relatively least developed countries have virtually no access to private international capital markets. Insofar as possible, prior assistance terms should be consistent with present grant assistance terms for relatively least developed countries. Therefore, notwithstanding section 2370(r) of this title and section 321 of the International Development and Food Assistance Act of 1975 but subject to paragraph (2) of this subsection, the President on a case-by-case basis, taking into account the needs of the country for financial resources and the commitment of the country to the development objectives set forth in sections 2151 and 2151–1 of this title—

The Congress recognizes that the relatively least developed countries have virtually no access to private international capital markets. Insofar as possible, prior assistance terms should be consistent with present grant assistance terms for relatively least developed countries. Therefore, notwithstanding section 2370(r) of this title and section 321 of the International Development and Food Assistance Act of 1975 but subject to paragraph (2) of this subsection, the President on a case-by-case basis, taking into account the needs of the country for financial resources and the commitment of the country to the development objectives set forth in sections 2151 and 2151–1 of this title—

(A) may permit a relatively least developed country to place amounts, which would otherwise be paid to the United States as payments on principal or interest on liability incurred by that country under subchapter I of this chapter (or any predecessor legislation) into local currency accounts (in equivalent amounts of local currencies as determined by the official exchange rate for United States dollars) for use by the relatively least developed country, with the concurrence of the Administrator of the agency primarily responsible for administering subchapter I of this chapter, for activities which are consistent with section 2151–1 of this title; and

(B) may waive interest payments on liability incurred by a relatively least developed country under subchapter I of this chapter (or any predecessor legislation) if the President determines that that country would be unable to use for development purposes the equivalent amounts of local currencies which could be made available under subparagraph (A).

(2) The aggregate amount of interest waived and interest and principal paid into local currency accounts under this subsection in any fiscal year may not exceed the amount approved for such purpose in an Act appropriating funds to carry out this part for that fiscal year, which amount may not exceed the amount authorized to be so approved by the annual authorizing legislation for development assistance programs. Amounts due and payable during fiscal year 1981 to the United States from relatively least developed countries on loans made under this subchapter (or any predecessor legislation) are authorized to be approved for use, in accordance with the provisions of paragraph (1) of this subsection, in an amount not to exceed $10,845,000.

(3) In exercising the authority granted by this subsection, the President should act in concert with other creditor countries.

The President may on a case-by-case basis waive the requirement of section 2151h(a) of this title for financial or “in kind” contributions in the case of programs, projects, or activities in relatively least developed countries.

Section 2151h(b) of this title shall not apply with respect to grants to relatively least developed countries.

(Pub. L. 87–195, pt. I, § 124, as added Pub. L. 95–424, title I, § 112(a)(1), Oct. 6, 1978, 92 Stat. 948; amended Pub. L. 96–53, title I, § 109, Aug. 14, 1979, 93 Stat. 363; Pub. L. 96–533, title III, § 308, Oct. 16, 1980, 94 Stat. 3147.)