Republic of Mozambique and the IMF
Russian Federation and the IMF
Heavily Indebted Poor Countries -- A Factsheet
IMF Welcomes Russia, Paris Club Understanding; Hopes for Early HIPC Decision on Mozambique
Mr. Jack Boorman, Director of the IMF's Policy Development and Review
Department, made the following statement after the approval by the IMF
Executive Board of the second annual loan for Mozambique under the
Enhanced Structural Adjustment Facility (ESAF--see Press Release No.
"We welcome the understanding reached between Russia and the
Chairman of the Paris Club, as reflected in the communiqué of the Denver
Summit of the Eight. We hope this understanding will be approved by the
Paris Club and allow the IMF Executive Board to make an early
determination of Mozambique's eligibility for the HIPC Initiative."
Note to editors: The Heavily Indebted Poor Countries' (HIPC) Initiative is
a framework adopted jointly by the IMF/World Bank for action to resolve the external debt
problems of heavily indebted poor countries making strong efforts at adjustment and reform.
Procedures adopted for implementing the Initiative require all relevant creditors and donors to
coordinate their action in the context of a number of steps to be taken at various stages, as
- First stage: Paris Club creditors would provide a debt flow rescheduling under
Naples terms along with comparable action by other bilateral and commercial creditors.
Multilateral institutions and bilateral creditors and donors will continue to provide support under
World Bank/IMF-supported adjustment programs. During the first stage, countries need to
establish their first three-year track record of good performance.
- Decision point: the point at which a HIPC completes its first (three-year) track
record of good performance under World Bank/IMF-supported adjustment programs, and
when, based on the debt sustainability analysis, a country's eligibility for the HIPC Initiative
is determined and, for those deemed eligible, commitments of assistance are made.
- Second Stage. For countries that are deemed eligible for support under the Initiative,
the Paris Club--along with other bilateral and commercial creditors--will, on a case-by-case
basis, provide flow rescheduling on more concessional terms involving a net present value
reduction of up to 80 percent of eligible debt. The country would establish a further three-year
track record of good performance under World Bank/IMF-supported programs, during
which time some of the exceptional assistance committed by multilateral creditors could be
provided in addition to the flow rescheduling on enhanced terms agreed with nonmultilateral
- Completion Point: the point at which the country concerned completes a second
three-year track record of good performance under World Bank/IMF-supported adjustment
programs, at which time additional measures will be taken to assist the country to reach a
sustainable level of debt.
IMF EXTERNAL RELATIONS DEPARTMENT