Much has been written on the position of heavily indebted poor countries (HIPCs). However, many of the recent reports convey a mistaken impression. To set the record straight:

· HIPCs on average receive twice as much by way of aid flows than they pay by way of debt service. In some countries-such as Mozambique, Tanzania, and Uganda-the ratio is much higher.

· For most HIPCs, budgetary spending on health and education is larger than actual debt-service payments (as opposed to debt service due but not paid).

· Under ESAF-supported programs over the last ten years, health and education spending has risen by average of 5 percent a year in real terms.

· In Mozambique, health and education spending in 1998 was larger (at over US$120 million) than debt service paid (US$ 104 million). (And this spending excludes capital spending financed by aid flows.) In 2000, we estimate that if agreement was reached on an enhanced HIPC Initiative along the lines discussed by the G-7 at Cologne, health and education spending would be more than three times debt service paid after HIPC Initiative assistance.