News Brief: IMF Considers Guinea-Bissau Under the HIPC Initiative
November 21, 2000
The Executive Board of the International Monetary Fund (IMF) considered Guinea-Bissau on a preliminary basis and found it to be eligibile for assistance under the Enhanced Initiative for Heavily Indebted Poor Countries (HIPC).1 The Board is expected to discuss Guinea-Bissau's Decision Point under the Initiative before the end of the year.
In commenting on the Executive Board discussion on Guinea-Bissau, Stanley Fischer, First Deputy Managing Director and Acting Chairman, said:
"Executive Directors considered the updated preliminary assessment of Guinea Bissau's eligibility under the enhanced HIPC Initiative. The debt sustainability analysis, conducted jointly by the staffs of the IMF and the World Bank in close collaboration with the authorities, shows that Guinea-Bissau's external debt as of end-1999 far exceeds the sustainability thresholds under the enhanced HIPC Initiative. The Fund therefore considers that Guinea-Bissau is eligible for assistance under the enhanced HIPC Initiative.
"Guinea-Bissau's satisfactory track record of performance under IMF and World Bank-supported programs, the preparation of a participatory Interim Poverty Reduction Strategy Paper, and the adoption of a program that could be supported by the Fund's Poverty Reduction and Growth Facility would pave the way for Guinea-Bissau to reach the decision point by end-2000. The authorities should continue their efforts to reduce poverty, improve governance, and enhance the effectiveness of delivery of social services in a context of macroeconomic stability and a strengthened structural reform agenda. The proposed reorientation of the budget toward poverty reduction and away from military expenditures is entirely appropriate. Looking ahead, continuation of reforms in macroeconomic, structural, and social areas will enable Guinea-Bissau to reach its floating completion point," Mr. Fischer said.
1For more information on HIPC, visit: http://www.imf.org/external/np/exr/facts/hipc.htm