Debt relief under the heavily indebted poor countries hipc. Highly indebted poor countries hipc initiative by amy. The heavily indebted poor countries hipc initiative, launched in september 1996 by the imf and the world bank, is an evolution of traditional debt relief efforts. Was the highly indebted poor country initiative hipc a success. The objective of this paper was to investigate the impact of the heavily indebted poor countries initiative on economic growth and economic stability and to assess other determinants of economic. Hipc initiative provides sufficient debt relief to convince private investors that countries will remain able to achieve growth and meet debt service for the foreseeable future. Heavily indebted poor countries hipc initiative eurlex. A key element of the hipc initiative is the required participation of all social groups and stakeholders in the. Ghana enhanced heavily indebted poor countries hipc.
Transfer of real resources to developing countries dc20020020 september 21, 2002 heavily indebted poor countries hipc initiative. The assessment for qualification and eligibility for myanmar and zimbabwe is yet to be fully completed. Enhanced heavily indebted poor countries hipc initiative preliminary document. Understanding the heavily indebted poor countries hipc. Boston house, 214 high street, boston spa, west yorkshire, ls23 6ad tel. Two decades later, the international financial system still is in search of a lasting solution to the debt burden problem of poor developing countries.
It provides debt relief and lowinterest loans to cancel or reduce external debt repayments to sustainable levels, meaning they can repay debts in a timely fashion in the future. Ethiopia enhanced heavily indebted poor countries hipc debt initiative english abstract. Ifads participation in the heavily indebted poor countries. On the merit of debt relief programs in heavily indebted. A secondary analysis of the heavily indebted poor countries hipc initiative in african nations. Which of the following is false about the highly indebted poor countries initiative. Heavily indebted poor countries initiative international. Enhanced heavily indebted poor countries hipc initiative. Status of implementation attached for the september 28, 2002, 66th meeting of the development committee is a report entitled heavily indebted poor countries hipc initiative. The purpose of the hipc initiative was to organise massive relief of external public debt owed to the international financial community as a whole international financial institutions, official bilateral creditors and p.
The joint imf world bank comprehensive approach to debt reduction is designed to ensure that no poor country faces a debt burden it cannot manage. Current status of adb member countries under hipc initiative 5 b. This file is licensed under the creative commons attributionshare alike 4. The hipc initiative was initiated by the international monetary fund and the world bank in 1996, following extensive lobbying by ngos and other bodies. The effect of the hipc initiative on heavily indebted poor countries countries have been participating in the heavily indebted poor countries initiative hipc since 1996 with the goal of bringing their respective debts to sustainable levels a sustainable debt is one in which a. Section ii describes chads status regarding access to the resources of the international monetary fund under the poverty reduction and growth facility prgf and the international development association. New thinking on sdgs and international law policy brief. Although the hipc initiative is nearly complete, its merit is still being debated among policymakers as well as academicians. Heavily indebted poor countries hipc initiative issues. Heavily indebted poor countries hipcs comprise a group of 41 developing countries classified as being heavily indebted poor countries. Heavily indebted poor countries hipc initiative and multilateral debt relief initiative mdri. The international initiative to resolve the debt problems of the heavily endebted poor countries hipcs created date. Policy for providing heavily indebted poor countries.
Liberia completion point document under the enhanced hipc initiative executive summary in june 2010, the boards of directors of the imf and the world bank approved irrevocable debt relief assistance to liberia under the enhanced heavily indebted poor countries hipc initiative. Dynamic fiscal impact of the debt relief initiatives on. Debt relief under the initiative was intended to help beneficiary countries achieve the millennium development mdg goals. Somalia has an historic opportunity to turn the page on decades. Chad preliminary document on the enhanced initiative for. The staff report on heavily indebted poor countries hipc initiative and multilateral. The effect of the hipc initiative on heavily indebted poor countries countries have been participating in the heavily indebted poor countries initiative hipc since 1996 with the goal of bringing their respective debts to sustainable levels a sustainable debt is one in which a country has no difficulties with. In february 2002, the executive boards of the international monetary fund imf and the international development association ida, agreed to support a comprehensive debt reduction package for ghana under the enhanced heavily indebted poor countries. Completion point document for the enhanced heavily indebted poor countries hipc initiative. Hipc country documents, and world bank and imf staff estimates. International efforts to provide debt relief to 41 such heavily indebted poor countries have been ongoing for over a decade, and these efforts culminated in the multilateral. Heavily indebted poor countries hipc initiative and multilateral. Bank enhanced initiative for heavily indebted poor countries hipc initiative.
Honduras enhanced heavily indebted poor countries hipc. Heavily indebted poor countries africa research institute. The heavily indebted poor countries hipc initiative is a major international effort targeted specifically at improving developing countries debt sustainability. Launched in 1996 and enhanced in 1999, the hipc initiative is a joint effort of multilateral, official bilateral and commercial creditors to reduce the external debt of the world. Using four key indicators of development, this paper assesses the impact of hipc initiative on countries that achieved the. The g8 multilateral debt relief initiative mdri is the next step of the highly indebted poor countries initiative hipc. Use the free adobe acrobat reader to view this pdf file summary. The staffs of the imf and ida consider that honduras has met all but one of the conditions for reaching the completion point under the enhanced heavily indebted poor countries hipc initiative, as specified in. The hipc debt relief initiative has been introduced as a coherent strategy for assisting the economic development of poor countries linking debt relief funds to the reduction of extreme levels of poverty. List of heavily indebted poor countries as of enddecember 2018 1 countries that have qualified for irrevocable debt relief under the hipc initiative and mdri. This paper discusses progress by the gambia under the enhanced heavily indebted poor countries initiative, and recommends that the executive directors of the international development association and the international monetary fund approve the completion.
Enhanced initiative for heavily indebted poor countries. Optimal contingent debt contract with moral hazard. Background and critiques debt contracts are based on an expectation that debtors will repay. The hipc initiative entailed coordinated action by multilateral organizations and governments to reduce to sustainable levels the external debt burdens of the most heavily indebted poor countries. Heavily indebted poor countries hipc initiative issues related to the sunset clause english abstract. Analytical history of heavily indebted poor country hipc. Factsheet debt relief under the heavily indebted poor. The heavily indebted poor countries hipc debt initiative designed to relieve. After two debt relief initiatives launched in 1996 the heavily indebted poor countries, hipc initiative and in 1999 the enhanced hipc initiative, the g7 decided to go further by cancelling the remaining multilateral debt for these hipc countries through the multilateral debt relief initiative mdri, 2005. Heavily indebted poor countries hipc initiative and multilateral debt relief initiative mdri statistical update executive summary the hipc initiative and mdri are nearly complete, with 36 countries having already reached the completion point under the hipc initiative. The hipc initiative is a comprehensive approach to debt reduction for heavily indebted poor countries pursuing imf and world banksupported adjustment and reform programs. Was the highly indebted poor country initiative hipc a.
Somalia debt relief through heavily indebted poor countries hipc initiative. The staffs of the imf and ida consider that honduras has met all but one of the conditions for reaching the completion point under the enhanced heavily indebted poor countries hipc initiative, as specified in the decision point document. Jul 08, 2010 thanks to debt relief provided by the world bank and other creditors, very poor and indebted countries are improving the lives of their people. Honduras and nicaragua, the poorest countries of central america, have lagged behind the rest of the region in growth, resulting in an increase in. Criticisms the end highly indebted poor countries hipc initiative 39 countries 33 in sub saharan africa development needs for the poorest countries more social invest improvement management of debt servicing the dept reduction what are the g8 countries.
For over two decades, somalia has experienced protracted conflict and fragility, the collapse of rule of law, institutions, basic public services and the social contract, resulting in the impoverishment of. Kwesi botchwey, multilateral debt relief initiative, nana ampofo, razia khan, segun akintoye. Debt relief under the initiative has alleviated debt burdens substantially in recipient countries and has enabled them to increase their povertyreducing expenditure by over one and a half percentage points of gdp between 2001 and 2015. Gambia enhanced heavily indebted poor countries hipc debt initiative english abstract. This paper provides new evidence on the effects of the heavily indebted poor countries hipc initiative on different economic and social indicators in 60 low income countries lics. There was a backdrop of substantial external pressure building up around. The imf and the world bank launched the heavily indebted poor countries initiative hipc in 1996, and supplemented it in 2005 with the multilateral debt relief initiative mdri. Transfer of real resources to developing countries i n t e r n a t i o n al b n k o r world bank r e c o n s t r u c ti on a n d d e v e l o p m e n t dc20070021 september 28, 2007 heavily indebted poor countries hipc initiative and multilateral debt relief initiative mdri. Debt initiative for the heavily indebted poor countries. Unfortunately, this is not the case for a number of poor and highly indebted countries.
Heavily indebted poor countries hipc initiative list of ringfenced countries that meet the income and indebtedness criteria at end2004. Gambia enhanced heavily indebted poor countries hipc. A buildup of foreign debt throughout the 1970s and 1980scombined with low growth, falling commodity prices, and other economic difficultiesleft many poor countries with significantly more debt than they could repay. Somalia has an historic opportunity to turn the page on decades of conflict, fragility and state fragmentation, and embark on a trajectory towards poverty reduction and inclusive growth. In the absence of such an expectation, creditors would not make loans, and all the potential benefits of intertemporal tradeof enabling savings decisions and acts of investment to be made by different personswould be aborted. What are the fiscal impacts of the mdri and hipc initiatives. Debt sustainability in hipcs in a new age of choice. The world bank, the international monetary fund imf and other multilateral, bilateral and commercial creditors began the heavily indebted poor country hipc initiative in 1996. International development association international monetary fund this report provides an update on the status of implementation, impact and costs of the enhanced heavily indebted poor country hipc initiative and the multilateral debt. In the late 1990s the bretton woods institutions the international monetary fund, imf, and the world bank launched the highly indebted poor countries initiatives hipc i, 1996 and hipc ii, 1999 to reduce the burden of debt on highly indebted countries. The initiative introduces a system under which poorer countries can apply for debt reduction.
Heavily indebted poor countries hipc from the world bank. In 1996, the international monetary fund imf and world bank launched the heavily indebted poor countries hipc initiative. Introduction from 1996, the hipc initiative and multilateral debt relief initiative mdri both helped eligible lics to address rapid, unsustainable buildups in external debt through targeted debt relief. Countries do not have to have established a past track record of economic reform in order to qualify as long as they make future commitments. Heavily indebted poor countries hipc international monetary fund. Unlike them, however, the hipc initiative involves for the first time debt relief from multilateral financial institutions. Central to the discussion of the heavily indebted poor country hipc debt relief initiative is the concept of debt sustainability targets.
Ghana enhanced heavily indebted poor countries hipc debt initiative english abstract. Debt relief incentives in highly indebted poor countries. Highly indebted poor country initiative listed as hipci. Figure 4 highly indebted poor countries in july 2011 source. Three additional countries are eligible for hipc initiative assistance.
Several indicators suggest that this foreign debt seriously impedes economic growth in both nations. The international initiative to resolve the debt problems of. The hipc problem hasan 108 africaslant,as33ofthe41hipcsareinaf109 rica. Other articles where heavily indebted poor countries initiative is discussed. It also provides updates on debt service and povertyreducing expenditure by beneficiary countries, as well as on the cost of debt relief, creditor participation rates, and litigation against hipcs. In the late 1990s the bretton woods institutions the international monetary fund, imf, and the world bank launched the highly indebted poor countries initiatives hipc i, 1996 and hipc ii, 1999 to.
Highly indebted poor country initiative how is highly. The highly indebted poor countries initiative based on the grounds of humanitarian nature and common global development goals came into play in this case with a belief that alleviation of poverty globally should not be independently managed by different states at the national level but rather be a global issue. Indebted poor countries initiative and multilateral debt initiative. Agenparl washington dc, gio 26 marzo 2020 authoreditor. It is designed to help those countries that cannot.
The initiative for the heavily indebted poor countries hipc initiative is designed to provide exceptional assistance to eligible countries following sound economic policies to help them reduce their external debt burden to sustainable levels. Bank and international monetary funds heavily indebted poor country program in 2002 and the total debt forgiveness plan agreed upon by the group of eight country leaders in gleneagles, scotland, in 2005, but by 2015 ghana was suffering from a high debt burden again. List of heavily indebted poor countries as of endjuly 2011. Sep 14, 2017 the highly indebted poor countries initiative based on the grounds of humanitarian nature and common global development goals came into play in this case with a belief that alleviation of poverty globally should not be independently managed by different states at the national level but rather be a global issue. Heavily indebted poor countries hipc economics tutor2u. For more than two decades, the majority of countries in the african continent have experienced repeated episodes of rising external debt and debt service, which has led to numerous efforts of external debt relief.
Ethiopia enhanced heavily indebted poor countries hipc. This paper presents a proposal addressing country eligibility under the hipc initiative sunset clause, and discuss related issues. Heavily indebted poor countries hipc initiative and. As such, the imf and the world bank are justi ed in. The program was designed to ensure that the poorest countries in the world are not overwhelmed by unmanageable or unsustainable debt burdens. Chad, in april 2015, is the latest country to reach the completion point. Oecd glossary of statistical terms heavily indebted poor. This document complements the joint international development association idainternational monetary fund imf paper entitled ethiopia. Nearly two decades ago, an unprecedented international effortthe heavily indebted poor countries hipc debt initiativeresulted in writing off the unsustainable debt of poor countries to levels that they could manage without compromising their economic and social development. Use the free adobe acrobat reader to view pdf files heavily indebted poor countries hipcs documents 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998. The hipc initiative is a comprehensive approach to debt. There are two reasons why mdri is unlikely to help poor countries. Calls upon international financial institutions to move forward expeditiously with their initiative to assist heavily indebted poor countries, which should be financed from each institutions own resources, noting that. Debt initiative for the heavily indebted poor countries hipcs.
270 380 413 726 1074 122 329 272 1093 668 838 1343 802 829 427 718 1504 985 1316 1049 712 851 797 1217 1533 829 692 1336 1057 609 36 827 902 12 368 1110 748 1048 1083