## _110811 ## Source details **Canonical URL:** [_110811](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2011/_110811.pdf) ## Other formats - [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2011/_110811.pdf.md) - [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2011/_110811.pdf.json) --- ### Executive Summary — Introduction and Objectives - Report objectives: - Provide an update on the status of implementation, impact, and costs of the Heavily Indebted Poor Country (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI). - Propose a modification of the reporting of progress under the initiatives, including discontinuation of the annual status of implementation reports, and the preparation of periodic reports on debt vulnerabilities in low income countries (LICs), including HIPCs. - Propose a further ring-fencing of the list of countries eligible or potentially eligible for debt relief under the HIPC Initiative based on end-2010 income and indebtedness criteria. ### Country Progress (status and eligibility) - Overall status: - 36 out of 40 HIPCs have reached the decision point. - 32 HIPCs have reached the completion point and benefited from debt relief under the MDRI. - Guinea-Bissau and Togo reached completion points in December 2010. - Interim HIPCs: - Comoros, Cote d’Ivoire, and Guinea expected to reach completion points within the next 15 months (from report reference). - Prospects for Chad remain uncertain. - Pre-decision-point HIPCs: - Eritrea, Somalia, and Sudan have not yet started qualifying processes. - Potentially eligible countries and authorities’ positions: - Four additional countries remain potentially eligible: Bhutan, Lao PDR, Nepal, and the Kyrgyz Republic. - Bhutan, Lao PDR, and Nepal governments indicated they did not wish to avail themselves of HIPC assistance. - Kyrgyz authorities indicated in early 2007 they did not wish to avail themselves of HIPC assistance but subsequently expressed interest in the MDRI; Kyrgyz external debt burden assessed well below HIPC qualification thresholds. ### Impact and Key Statistics — Debt Relief and Poverty-Reducing Expenditure - Aggregate and sequence reductions (end-2010 PV terms, in billions of U.S. dollars): - Before traditional debt relief: 122.9 - After traditional debt relief: 99.6 - After HIPC Initiative debt relief: 45.0 - After additional bilateral debt relief: 35.1 - After MDRI: 4.8 - Breakdown by country group (end-2010 PV terms): Interim Countries 17.9; 32 Completion-Point Countries 17.4; additional bars: 12.9, 12.9, 10.3 (as shown in figure) - Debt relief scale: - Debt relief to the 36 post-decision point HIPCs represents almost 35 percent of these countries’ 2010 GDP. - Combined traditional mechanisms and beyond-HIPC relief estimated to reduce debt burden for these countries by about 90 percent relative to pre-decision point levels. - Poverty-reducing spending and debt service (36 post-decision point countries): - Poverty reducing spending increased by more than three percentage points of GDP, on average, between 2001 and 2010. - Debt service payments declined by a somewhat smaller amount over the same period. - Progress toward MDGs among the 32 completion point HIPCs (summary): - Universal primary education: within reach for most; half still need additional reforms. - Gender equality and prevention of HIV/AIDS, TBC and malaria: more than half expected to meet targets. - Reduce under-five mortality and ensure environmental sustainability: about half on track. - MDG 1 (eradicate extreme poverty and hunger): only a quarter of completion point HIPCs on track. - MDG 6 (improve maternal health): progress less certain. - MDG 8 (build a global partnership for development): only a few HIPCs on track. ### Costs, Financing, and Creditor Participation - HIPC Initiative total cost (end-2010 PV terms): - Total cost to creditors: US$76 billion. - About two-thirds (US$54.6 billion) represents irrevocable debt relief to the 32 post-completion point countries. - Estimated cost for the four interim countries: US$4.4 billion. - Estimated cost for the remaining four pre-decision point HIPCs: US$17 billion. - Topping-up assistance (provided to seven HIPCs) represents less than 3 percent of total HIPC Initiative cost. - Creditor composition (HIPC Initiative total cost): - Multilateral creditors: 45 percent of total cost. - IDA: 20 percent - IMF: 9 percent - AfDB group: 7 percent - Bilateral creditors: over half of total cost; Paris Club creditors account for 36 percent of total cost. - Non-Paris Club official creditors: 13 percent. - Commercial creditors: 6 percent. - Non-Paris Club creditors expected to deliver about 30 percent of HIPC assistance to pre-decision point HIPCs. - HIPC Initiative costs by creditor and country group (end-2010 PV terms, in billions): - Post-Completion-Point HIPCs (32): Multilateral creditors 27.1; Bilateral and commercial creditors 27.5; Total Costs 54.6. - Interim HIPCs (4): Multilateral creditors 1.5; Bilateral and commercial creditors 2.9; Total Costs 4.4. - Total Post-Decision-Point HIPCs (36): Multilateral creditors 28.6; Bilateral and commercial creditors 30.4; Total Costs 59.0. - Pre-Decision-Point HIPCs (4): Multilateral creditors 5.3; Bilateral and commercial creditors 11.6; Total Costs 17.0. - Total (40): Multilateral creditors 34.0; Bilateral and commercial creditors 42.0; Total Costs 76.0. - Memorandum: Total Costs from Previous Report (discounted to end-2010 terms) 75.9; Total Change in Costs (percent) 0.2. - MDRI total cost (end-2010 PV terms): - Total cost for four participating multilateral creditors: US$33.8 billion. - Share by creditor (of MDRI total): - IDA: about 65 percent - IMF: 12 percent - AfDF: 15 percent - IaDB: 8 percent - US$30.3 billion in PV terms has already been delivered to the 32 post-completion-point countries. - IMF has also provided MDRI relief to Cambodia and Tajikistan. - Selected MDRI figures (post-completion-point HIPCs, end-2010 PV terms, in billions): - Principal 42.1; Foregone Interest 4.7; Total Principal and Foregone Interest 46.8; Assistance delivered 30.3 (post-completion-point HIPCs). - All HIPCs: Principal 47.0; Foregone Interest 5.5; Total Principal and Foregone Interest 52.5; MDRI total 33.8 (assistance in PV terms). - IDA (All HIPCs): Principal 32.2; Foregone Interest 3.1; Total 35.3; Assistance delivered 21.9. - IMF (All HIPCs): Principal 3.9; Foregone Interest 0.0; Total 3.9; Assistance delivered 4.2. - AfDF (All HIPCs): Principal 7.5; Foregone Interest 1.4; Total 8.9; Assistance delivered 4.9. - IaDB (All HIPCs): Principal 3.3; Foregone Interest 1.0; Total 4.4; Assistance delivered 2.9. - Non-HIPCs (IMF MDRI assistance to Cambodia and Tajikistan): Principal 0.2; Foregone Interest 0.2; Total 0.2; Assistance delivered 0.2. - Beyond-HIPC relief and notable country actions: - Paris Club beyond-HIPC debt relief: US$11.9 billion in end-2010 PV terms (case-by-case). - Haiti: World Bank/IDA: outstanding World Bank debt of US$36 million canceled in May 2010 using contributions from 13 donors. - IaDB: debt cancellation US$484 million and conversion US$144 million for Haiti; IFAD announced relief on outstanding debt of about US$50 million (delivery prevented by insufficient donor commitment); Venezuela announced US$398 million in relief at New York Donors’ Conference (modalities not confirmed); Taiwanese government to shoulder payments to Taiwanese commercial banks for five years. ### Implementation Issues and Remaining Challenges - Key implementation concerns: - Some of the seven countries that have not yet reached completion point, particularly pre-decision-point HIPCs, face especially difficult challenges requiring sustained domestic efforts and continued international support. - Full participation of all creditors remains to be secured, particularly a number of smaller multilateral, non-Paris Club bilateral, and private creditors. - Additional funds will be needed to provide debt relief to the few HIPCs having protracted arrears to international financial institutions. - Commercial creditor litigation, though diminished in recent years, can be costly for HIPCs. - Measures and developments: - National and multilateral initiatives have sought to respond to risks associated with creditor litigation. - The IDA-managed Debt Reduction Facility (DRF) has helped settle commercial creditors’ claims on HIPCs and reduce the risk of litigation. - Commercial creditor litigation: - Number of litigation cases against HIPCs remained unchanged at 17 between 2010 and 2011. - Two cases against Liberia resolved with DRF support; two new cases launched against Democratic Republic of Congo. - UK policy: In May 2011 the UK made permanent the Debt Relief (Developing Countries) Act (initially April 2010), limiting the proportion of debts commercial creditors can reclaim under UK law to the HIPC-equivalent proportion. - Small multilateral creditors: - Another 20 multilateral creditors beyond IDA, IMF, AfDB, IaDB account for US$3.8 billion (13 percent of total HIPC Initiative costs) and have committed to deliver debt relief at completion point. - Eight multilateral creditors, representing less than 0.6 percent of estimated HIPC cost, have not indicated intention to provide relief. - Smaller multilateral creditors have delivered 55 percent of total HIPC Initiative debt relief committed to completion point HIPCs. - Non-Paris Club bilateral creditors: - Delivery increased to 39–43 percent (from 34–39 percent last year), partly due to Algeria’s relief to an additional 10 HIPCs. - Some non-Paris Club creditors (China, Cuba, Kuwait) delivered relief to recent completers; others (Portugal, Saudi Arabia, UAE) have not. - Commercial creditors: - Commercial creditor exposure accounts for US$4.6 billion (2010 PV terms), or 6 percent of total cost to all 40 HIPCs. - DRF expiration scheduled for June 30, 2012; no operation can be approved after end-March 2012 without board action. - Large remaining commercial debt eligible for relief: Democratic Republic of Congo estimated at US$897 million; Sudan estimated around US$5 billion. ### IMF Resources, Interim HIPCs, Pre-decision Countries, and Zimbabwe - IMF resources: - For the IMF, available resources are estimated to be sufficient to cover the projected costs of debt relief to all the remaining HIPCs, excluding Somalia and Sudan. - Additional resources will be needed if Somalia or Sudan embark on the HIPC Initiative, if additional countries with outstanding liabilities to the Fund qualify, or if topping up is required. - Interim HIPCs potentially reaching completion point in 2012: - Comoros: decision point June 2010; could reach completion point in late 2012 or in 2013 with ECF-supported program restored. - Côte d’Ivoire: expected completion point by mid-2012 given progress on cocoa/coffee reforms and PRSP implementation. - Guinea: could reach completion point by end-2012 if ECF-supported program and PRS implementation satisfactory. - Chad: prospects uncertain; improved macroeconomic policy performance required for progress. - Pre-decision-point countries: - Eritrea indicated in 2009 it might consider seeking assistance but has not reiterated interest. - Kyrgyz Republic indicated in early 2007 it did not wish to avail itself of HIPC assistance but later expressed interest in MDRI; assessed below HIPC thresholds on 2010 debt data. - Somalia and Sudan remain protracted arrears cases; Somalia has no functioning government and uncertain engagement. - Sudan specifics: - Independence of South Sudan on July 9, 2011 causes large loss of export and fiscal receipts for Sudan. - Tentative agreement to leave all public external debt with Sudan (the “zero option”), contingent on South Sudan supporting Sudan in mobilizing creditor support for debt relief and on Sudan reaching decision point within two years. - If zero option unworkable, apportionment could leave South Sudan with unsustainable debt burden. - Working group convened by IMF and IDA staffs engaged in technical work; some creditors indicated broad support for debt relief though legal constraints exist. - To reach decision point, Sudan needs strong policy performance, PRSP progress, and credibility with creditors. - Zimbabwe: - Not potentially eligible under HIPC as of report; faces unsustainable debt situation and may need comprehensive debt relief. - Preliminary assessment suggests Zimbabwe may have met the end-2004 indebtedness criterion by a small margin. - For Fund: if PRGT-eligibility is re-instated following arrears resolution, Zimbabwe could be added to list of potentially eligible HIPCs if indebtedness assessment confirmed. - For World Bank: HIPC income criterion bound by end-2004 cutoff; changes in IDA status post-2004 are not relevant; modification or exception to IDA’s HIPC criteria would be required for Zimbabwe. - To qualify for HIPC relief, Zimbabwe would need a track record of program performance, arrears clearance or credible plans, and a poverty reduction strategy. ### Debt Vulnerabilities, Monitoring, and Reporting Proposals - Debt vulnerability assessment: - While a third of LICs and one-quarter of HIPCs face high debt vulnerabilities, there are few indications of a significant intensification of debt vulnerabilities among LICs over the last 18 months. - An April 2010 IMF-IDA report concluded global financial crisis had a significant impact on LIC debt vulnerabilities but was not expected to result in systemic debt difficulties across LICs. - Relative to early 2010, the number of LICs rated at high risk of debt distress or in debt distress declined slightly, mainly because some HIPCs previously in debt distress reached the completion point. - A quarter of the post-completion point HIPCs are rated at high risk of debt distress, and none is in debt distress. - Vulnerabilities often reflect narrow export base or weak policy and institutional capacity. - Systemic debt difficulties across LICs warranting new debt relief initiatives are not presently expected. - Monitoring and assistance frameworks: - Joint IMF-World Bank LIC Debt Sustainability Framework (DSF) supports LICs’ efforts to achieve development goals without creating future debt problems. - IMF and IDA provide debt management technical assistance through the Debt Management Facility (DMF). - IDA’s 2006 grant allocation framework provides ex ante response to risks of future debt distress. - Increased recourse to non-concessional external borrowing by LICs underscores need for close monitoring of debt vulnerabilities. - Reporting proposals: - Discontinue the annual status of implementation report in its current form. - Regularly publish updated information on the IMF and World Bank websites corresponding to current text tables, figures, and the statistical appendix. - Prepare periodic joint IMF-World Bank reports on debt vulnerabilities in LICs, including HIPCs, based on LIC DSAs and DSA updates prepared in the preceding 12-month period and other pertinent information. - Continue monitoring of debt relief delivery and litigation in the context of individual annual debt sustainability analysis and summarize regularly. - Progress in poverty reducing expenditure and MDG achievement will continue to be tracked and posted. ### Options for the Future of the HIPC Initiative and Staff Recommendation - Context: - HIPC Initiative effectively closed to new entrants in 2006 when the sunset clause took effect and the list of potentially eligible HIPCs was ring-fenced. - Initiative was not intended to be permanent. - Two principal options considered: 1. Maintain the Initiative as it is (status quo): Initiative remains closed to new entrants; currently potentially eligible HIPCs retain potential eligibility indefinitely; downside: perpetuates moral hazard. 2. Modify framework by adding end-2010 income and indebtedness criteria for eligibility and further ring-fencing potentially eligible countries: legally feasible; would likely exclude most countries that indicated they do not wish to avail themselves of assistance; downside: would preclude later re-entry even if debt ratios rose. - Staff recommendation: - IMF and IDA staffs propose implementing option (ii)—adding end-2010 income and indebtedness criteria for potential eligibility—to reduce moral hazard and align with countries' expressed wishes (exception noted for Nepal). - Effect of end-2010 indebtedness criterion (country outcomes): - Did NOT meet indebtedness criterion at end-2010: Bhutan, the Kyrgyz Republic, Lao PDR. - Met indebtedness criterion at end-2010: Eritrea, Nepal, Somalia, Sudan. - Applying end-2010 criteria would retain only Eritrea, Nepal, Somalia, and Sudan on list of potentially eligible HIPCs. - Nepal special case and remittances: - Nepal rated at moderate risk of debt distress under LIC DSF; external PPG debt at end-2010 well below DSF thresholds. - Loan-by-loan data: PV of external PPG guaranteed debt at end-2010 = 173 percent of exports; PV of external PPG debt at end-2010 = 112 percent of central government revenue. - HIPC threshold discrepancy arises because remittances exceed 20 percent of GDP and are more than twice exports; DSF includes remittances, HIPC calculations exclude remittances. - If remittances were included, PV of PPG debt-to-exports ratio would fall to below 60 percent. - Staffs do not favor modifying HIPC to include remittances at this late stage due to data quality, uniformity of treatment, and complexity concerns. ### Issues for Discussion (staff-identified) - Whether to implement end-2010 income and indebtedness criteria and further ring-fencing of potentially eligible countries. - How to ensure full creditor participation, including smaller multilateral, non-Paris Club bilateral, and private creditors, to complete implementation. - How to address financing needs for HIPCs with protracted arrears to international financial institutions. - The appropriate format and periodicity for future reporting on debt relief progress and LIC debt vulnerabilities. - Whether introducing remittances into the HIPC Initiative framework at this late stage would be appropriate (staffs recommend against). ### Selected Annex Highlights — Methodology, Country Assessments, and Costing Assumptions - HIPC eligibility assessment criteria (Annex II): - Must be IDA-only and PRGT eligible; and end-December 2004 debt burden indicators above thresholds after full application of traditional debt relief mechanisms. - Thresholds: 150 percent for PV of debt-to-exports; 250 percent for PV of debt-to-fiscal revenue. - To qualify under fiscal criterion: exports/GDP above 30 percent and fiscal revenue/GDP above 15 percent. - Debt scope and PV calculations: - Debt limited to medium and long-term public and publicly guaranteed external debt with specified exceptions. - PV discount rate estimated at 3.9 percent (implicit long-term interest rate of SDR basket currencies over 2008–2010) used to discount to end-2010 PV terms. - End-2010 country indebtedness determinations (Annex I selected figures): - Bhutan: PV external PPG debt at end-2010 = 125 percent of exports; = 180 percent of central government revenue; did not meet HIPC threshold. - Eritrea: PV external PPG debt at end-2010 at least 596 percent of exports; met HIPC export-window threshold. - Kyrgyz Republic: PV external PPG debt at end-2010 = 75 percent of exports; = 184 percent of central government revenue; did not meet HIPC threshold. - Lao P.D.R.: PV external PPG debt at end-2010 = 113–117 percent of exports; = 236–246 percent of central government revenue; did not meet HIPC threshold (range reflects stock-flow inconsistency). - Nepal: PV external PPG guaranteed debt at end-2010 = 173 percent of exports; = 112 percent of central government revenue; met HIPC export-window threshold (caveat: remittances make debt sustainable under LIC DSF). - Somalia: PV external PPG debt at end-2010 at least 410 percent of exports; fiscal revenue data N/A; met HIPC export-window threshold. - Sudan: PV external PPG debt at end-2010 = 184 percent of exports; = 201 percent of central government revenue; met HIPC export-window threshold (export denominator is 2008–10 average; Sudan to lose large share of export base after South Sudan independence). - Costing exercise coverage and assumptions (Annex IV): - Costing covers 36 post-decision-point HIPCs and 3 pre-decision-point HIPCs (Eritrea, Somalia, Sudan); Kyrgyz Republic not included in cost estimates. - Data updated through end-July 2010. - PV discount rate used: 3.9 percent. - MDRI exchange-rate assumptions detailed for IDA, AfDF, IMF, and IaDB across FY07–FY11 and end-2010 conventions. - Selected consolidated cost and delivery aggregates (status as of end-July 2011, Table summaries): - 32 Post-Completion-Point HIPCs — Assistance under HIPC Initiative and MDRI: 71,767; Assistance Delivered: 46,793; Total HIPC and MDRI (sum of nominal assistance columns shown): 117,702 (values in millions of U.S. dollars as presented). - Total Debt Relief Committed (Table 4 summary row): 76,378 46,976 122,495 (In millions of U.S. dollars; columns correspond to PV at decision point / Nominal MDRI / Total nominal). - Donor pledges and DRTF (IDA-managed) status as of June 30, 2011: - Donor pledges and contributions: US$3.9 billion. - Accumulated investment income: US$380 million. - Allocated for disbursement: about US$3.2 billion. - Excluding US$476 million in pending disbursements, remaining resources available for future operations: US$657 million as of June 30, 2011. - US$657 million estimated to equal current estimate of debt relief expected from eligible creditors to the four interim HIPCs and the three pre-decision point HIPCs expected to qualify. - World Bank (IDA) 32 Post-Completion-Point HIPCs: Committed Assistance (World Bank) 15,653.1; Committed Assistance in end-2010 PV Terms 12,591.8; Delivered Assistance in end-2010 PV Terms 7,266.1; Delivered Assistance in Nominal Terms 31,667.9; Delivered Assistance in end-2010 PV Terms (combined HIPC Initiative and MDRI) 19,715.3; Total Committed Assistance under HIPC Initiative and MDRI in end-2010 PV Terms 31,878.1; Delivered Assistance in end-2010 PV Terms 26,552.3 (table aggregates). - IMF MDRI aggregates (IMF tables): MDRI Trusts row 3,324.0; TOTAL MDRI to HIPCs and non-HIPCs 3,538.3 (millions of U.S. dollars as shown in IMF table). - Paris Club totals (Table 11): total HIPC Initiative Assistance Committed to 36 Post-Decision-Point HIPCs shown as 21,788 (table totals). - Paris Club delivery to 32 Post-Completion-Point HIPCs (Table 12): TOTAL HIPC Initiative Assistance Committed 20,151.5; TOTAL HIPC Initiative Assistance Provided 20,151.5; Debt Relief Beyond HIPC Initiative Provided 11,948.9; Total Debt Relief Provided 32,100.4; Debt-Relief-Provided-to-Debt-Relief-Committed Total (In percent) 159. - AfDB Group (Table 8A) 26 Post-Completion-Point HIPCs — TOTAL Committed Assistance in PV terms as of decision point 3,410.7; Committed Assistance in end-2010 PV Terms 4,638.6; Delivered Assistance in end-2010 PV Terms 2,855.7; Total Committed Assistance (HIPC + MDRI) in end-2010 PV Terms 7,672.8; Delivered Assistance in end-2010 PV Terms 6,972.1. - IaDB (Table 9) 5 Post-Completion-Point HIPCs — TOTAL Committed Assistance 1,183.0; Committed Assistance in end-2010 PV Terms 1,715.1; Delivered Assistance in end-2010 PV Terms 966.0; Total (HIPC + 2007 Initiative) in end-2010 PV Terms 4,369.0; Delivered in end-2010 PV Terms 3,835.5. *Source: World Bank and IMF staff estimates and details contained in the provided content.* ### Executive Summary ...................................................................................................... ### Executive Summary ### Introduction - Report objectives: - Provide an update on the status of implementation, impact, and costs of the Heavily Indebted Poor Country (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI). - Propose a modification of the reporting of progress under the initiatives, including discontinuation of the annual status of implementation reports, and the preparation of periodic reports on debt vulnerabilities in low income countries (LICs), including HIPCs. - Propose a further ring-fencing of the list of countries eligible or potentially eligible for debt relief under the HIPC Initiative based on end-2010 income and indebtedness criteria. ### Country Progress - Overall status: - 36 out of 40 HIPCs have reached the decision point. - 32 HIPCs have reached the completion point and benefited from debt relief under the MDRI. - Guinea-Bissau and Togo reached completion points in December 2010. - Interim HIPCs (between decision and completion points): - Comoros, Cote d’Ivoire, and Guinea are expected to reach their respective completion points within the next 15 months. - Prospects for Chad remain uncertain. - Pre-decision-point HIPCs: - Eritrea, Somalia, and Sudan have not yet started the process of qualifying for debt relief under the Initiative. - Potentially eligible countries and authorities’ positions: - Four additional countries remain potentially eligible for HIPC debt relief: Bhutan, Lao PDR, Nepal, and the Kyrgyz Republic. - For Bhutan, Lao PDR, and Nepal, their governments have indicated that they did not wish to avail themselves of HIPC Initiative assistance. - The Kyrgyz authorities indicated in early 2007 that they did not wish to avail themselves of debt relief under the HIPC Initiative but subsequently expressed interest in the MDRI. The Kyrgyz Republic’s external debt burden is assessed to be well below the HIPC qualification thresholds. ### Implementation Issues and Remaining Challenges - Key implementation concerns: - Some of the seven countries that have not yet reached the completion point, particularly the pre-decision-point HIPCs, face especially difficult challenges requiring sustained domestic efforts and continued international support. - Full participation of all creditors remains to be secured, particularly a number of smaller multilateral, non-Paris Club bilateral, and private creditors. - Additional funds will be needed to provide debt relief to the few HIPCs having protracted arrears to international financial institutions. - Commercial creditor litigation, though diminished in recent years, can be costly for HIPCs. - Measures and developments: - National and multilateral initiatives have sought to respond to risks associated with creditor litigation. - The IDA-managed Debt Reduction Facility (DRF) has helped settle commercial creditors’ claims on HIPCs and reduce the risk of litigation. ### Debt Service Relief, Poverty-Reducing Expenditure, and Vulnerabilities - Implementation impact: - Debt relief under the HIPC Initiative and MDRI has progressed to provide irrevocable debt relief for qualifying HIPCs. - Monitoring and reporting proposals: - IMF and IDA staffs propose further streamlining HIPC Initiative and MDRI progress reporting by regularly posting updated information on the IMF and World Bank websites rather than producing an annual status of implementation report. - Staffs propose the preparation of periodic joint IMF-World Bank reports on debt vulnerabilities in LICs, including HIPCs. - Debt vulnerability assessment: - While there are few indications of a significant intensification of debt vulnerabilities among LICs over the last 18 months, one-third of LICs and one-quarter of HIPCs face high debt vulnerabilities. ### Costs, Financing, and Creditor Participation - Continued issues: - Ensuring full creditor participation (including smaller multilaterals, non-Paris Club bilaterals, and private creditors) remains essential to complete implementation. - Financing gaps exist for HIPCs with protracted arrears to international financial institutions and additional resources will be needed to address them. ### Options for the Future of the HIPC Initiative - Context: - The HIPC Initiative was not intended to be permanent; the Initiative was effectively closed to new entrants in 2006 when the sunset clause was allowed to take effect and the list of potentially eligible HIPCs was ring-fenced. - Given that the HIPC Initiative has largely achieved its objectives, the IMF and IDA Executive Boards were asked to consider options for its future. - Two main options discussed: - (i) Maintain the Initiative as it is. - (ii) Modify the framework by adding end-2010 income and indebtedness criteria for eligibility and further ring-fencing potentially eligible countries. - Staff recommendation: - IMF and IDA staffs propose implementing the second option—adding end-2010 income and indebtedness criteria for potential eligibility—to reduce moral hazard and align with the wishes of countries that indicated they do not wish to avail themselves of debt relief (with the exception of Nepal). - Consequences of applying end-2010 indebtedness criterion: - Three countries—Bhutan, the Kyrgyz Republic, and Lao PDR—would not meet the indebtedness criterion at end-2010. - Four countries—Eritrea, Nepal, Somalia, and Sudan—would meet the indebtedness criterion at end-2010. ### Reporting and Monitoring Going Forward - Reporting changes proposed: - Discontinue the annual status of implementation report in its current form. - Regularly publish updated information on the IMF and World Bank websites. - Prepare periodic joint IMF-World Bank reports on debt vulnerabilities in LICs, including HIPCs, to monitor developments and inform policy responses. ### Issues for Discussion (summary of staff-identified discussion points) - Whether to implement end-2010 income and indebtedness criteria and further ring-fencing of potentially eligible countries. - How to ensure full creditor participation, including smaller multilateral, non-Paris Club bilateral, and private creditors, to complete implementation. - How to address financing needs for HIPCs with protracted arrears to international financial institutions. - The appropriate format and periodicity for future reporting on debt relief progress and LIC debt vulnerabilities. *EXECUTIVE SUMMARY* ### 4. Debt relief under the HIPC Initiative and the MDRI has substantially lowered ### 4. Debt relief under the HIPC Initiative and the MDRI has substantially lowered ### Impact on HIPCs’ debt burdens - Debt relief under the initiatives to the 36 post-decision point HIPCs represents almost 35 percent of these countries’ 2010 GDP. - Together with traditional mechanisms and additional (―beyond HIPC‖) relief from Paris Club creditors, assistance is estimated to reduce the debt burden for these countries by about 90 percent relative to pre-decision point levels. - Figure 1 data (end-2010 PV terms, in billions of U.S. dollars) highlights sequential reductions in post-decision-point HIPCs’ debt stock: - Before traditional debt relief: 122.9 - After traditional debt relief: 99.6 - After HIPC Initiative debt relief: 45.0 - After additional bilateral debt relief: 35.1 - After MDRI: 4.8 - Breakdown by country group (end-2010 PV terms): Interim Countries 17.9; 32 Completion-Point Countries 17.4; additional bars: 12.9, 12.9, 10.3 (as shown in figure) ### Poverty-reducing spending and progress on MDGs - For the 36 post-decision point countries, poverty reducing spending increased by more than three percentage points of GDP, on average, between 2001 and 2010. - Debt service payments declined by a somewhat smaller amount over the same period. - Figure 2 (Percent of GDP) trend indicators (1999–2015p): poverty reducing expenditure and debt service depicted across years 1999, 2001, 2003, 2005, 2007, 2009e, 2011p, 2013p, 2015p (precise numeric series are presented in Appendix Table 2 and Table 3). - Progress toward MDGs among the 32 completion point HIPCs: - Universal primary education: within reach for most; half still need additional reforms. - Gender equality and prevention of HIV/AIDS, TBC and malaria: more than half expected to meet targets. - Reduce under-five mortality and ensure environmental sustainability: about half on track. - MDG 1 (eradicate extreme poverty and hunger): only a quarter of completion point HIPCs on track. - MDG 6 (improve maternal health): progress less certain. - MDG 8 (build a global partnership for development): only a few HIPCs on track. ### Updated costs of the Initiatives (end-2010 PV terms) - Total cost of HIPC Initiative debt relief to creditors: US$76 billion. - About two-thirds (US$54.6 billion) represents irrevocable debt relief to the 32 post-completion point countries. - Estimated cost for the four interim countries: US$4.4 billion. - Estimated cost for the remaining four pre-decision point HIPCs: US$17 billion. - Topping-up assistance (provided to seven HIPCs) represents less than 3 percent of total HIPC Initiative cost. - Creditor composition of HIPC Initiative costs: - Multilateral creditors: 45 percent of total cost. - IDA: 20 percent - IMF: 9 percent - AfDB group: 7 percent - Bilateral creditors: over half of total cost; Paris Club creditors account for 36 percent of total cost. - Non-Paris Club official creditors: 13 percent. - Commercial creditors: 6 percent. - Non-Paris Club creditors are expected to deliver about 30 percent of HIPC assistance to pre-decision point HIPCs. - Table 2 (HIPC Initiative: Costs by Main Creditor and Country Group, end-2010 PV terms, in billions): - Post-Completion-Point HIPCs (32): Multilateral creditors 27.1; Bilateral and commercial creditors 27.5; Total Costs 54.6. - Interim HIPCs (4): Multilateral creditors 1.5; Bilateral and commercial creditors 2.9; Total Costs 4.4. - Total Post-Decision-Point HIPCs (36): Multilateral creditors 28.6; Bilateral and commercial creditors 30.4; Total Costs 59.0. - Pre-Decision-Point HIPCs (4): Multilateral creditors 5.3; Bilateral and commercial creditors 11.6; Total Costs 17.0. - Total (40): Multilateral creditors 34.0; Bilateral and commercial creditors 42.0; Total Costs 76.0. - Memorandum: Total Costs from Previous Report (discounted to end-2010 terms) 75.9; Total Change in Costs (percent) 0.2. - Total cost of the MDRI for four participating multilateral creditors: US$33.8 billion in end-2010 PV terms. - Share by creditor (of MDRI total): - IDA: about 65 percent - IMF: 12 percent - AfDF: 15 percent - IaDB: 8 percent - US$30.3 billion in PV terms has already been delivered to the 32 post-completion-point countries. - IMF has also provided MDRI relief to Cambodia and Tajikistan. - Table 3 (MDRI: Nominal Costs by Creditor and Country Group, in billions, selected figures): - Post-Completion-Point HIPCs assistance in end-2010 PV terms: Principal 42.1; Foregone Interest 4.7; Total Principal and Foregone Interest 46.8; Assistance delivered 30.3. - All HIPCs: Principal 47.0; Foregone Interest 5.5; Total Principal and Foregone Interest 52.5; MDRI total 33.8 (assistance in PV terms). - IDA share (All HIPCs): Principal 32.2; Foregone Interest 3.1; Total 35.3; Assistance delivered 21.9. - IMF (All HIPCs): Principal 3.9; Foregone Interest 0.0; Total 3.9; Assistance delivered 4.2. - AfDF (All HIPCs): Principal 7.5; Foregone Interest 1.4; Total 8.9; Assistance delivered 4.9. - IaDB (All HIPCs): Principal 3.3; Foregone Interest 1.0; Total 4.4; Assistance delivered 2.9. - Non-HIPCs (IMF MDRI assistance to Cambodia and Tajikistan) assistance: Principal 0.2; Foregone Interest 0.2; Total 0.2; Assistance delivered 0.2. ### Beyond-HIPC relief and country-specific notes - Paris Club beyond-HIPC debt relief: US$11.9 billion in end-2010 PV terms (case-by-case). - EU provided additional debt relief under the LDC Initiative (cancellation of outstanding special loans after HIPC relief). - Haiti: Most multilateral and bilateral creditors approved cancellation of outstanding debt beyond HIPC and MDRI to help recovery from January 2010 earthquake. - World Bank/IDA: outstanding World Bank debt of US$36 million canceled in May 2010 using contributions from 13 donors. - IaDB: pledged 100 percent relief of Haiti’s debt to the IDB and conversion of undisbursed loans to grants; debt cancellation US$484 million and conversion US$144 million. - IFAD announced relief on outstanding debt of about US$50 million (delivery prevented by insufficient donor commitment). - Venezuela announced US$398 million in relief at New York Donors’ Conference (official modalities not confirmed). - Taiwanese government to shoulder payments to Taiwanese commercial banks for five years. ### Implementation issues and creditor participation - Ongoing challenges: (i) mobilizing full participation of all creditors; (ii) addressing commercial creditor litigation; (iii) ensuring full financing of the HIPC Initiative and the MDRI; (iv) taking interim HIPCs to completion points; (v) providing debt relief to pre-decision point countries and possibly Zimbabwe. - Small multilateral creditors: - Another 20 multilateral creditors (beyond IDA, IMF, AfDB, IaDB) account for US$3.8 billion (13 percent of total HIPC Initiative costs) and have committed to deliver debt relief at completion point. - Eight multilateral creditors, representing less than 0.6 percent of estimated HIPC cost, have not indicated intention to provide relief. - Smaller multilateral creditors have delivered 55 percent of total HIPC Initiative debt relief committed to completion point HIPCs. - Non-Paris Club bilateral creditors: - Delivery increased to 39–43 percent (from 34–39 percent last year), partly due to Algeria’s relief to an additional 10 HIPCs. - Some non-Paris Club creditors (China, Cuba, Kuwait) delivered relief to recent completers; others (Portugal, Saudi Arabia, UAE) have not. - Commercial creditors: - Account for US$4.6 billion (2010 PV terms), or 6 percent of total cost to all 40 HIPCs. - Participation supported by IDA’s Debt Reduction Facility (DRF); DRF supported Liberia buyback second closing in December 2010. - DRF expiration currently scheduled for June 30, 2012; no operation can be approved after end-March 2012 without board action. - Large remaining commercial debt eligible for relief: Democratic Republic of Congo estimated at US$897 million; Sudan estimated around US$5 billion. ### Commercial creditor litigation - Number of litigation cases against HIPCs remained unchanged at 17 between 2010 and 2011. - Two cases against Liberia resolved with DRF support; two new cases launched against Democratic Republic of Congo. - UK policy development: In May 2011 the UK made permanent the Debt Relief (Developing Countries) Act (initially April 2010), limiting the proportion of debts commercial creditors can reclaim under UK law to the HIPC-equivalent proportion. ### Ensuring financing of the Initiatives and the DRTF - IDA 16 replenishment commitments: - HIPC compensation: SDR 1 billion. - Arrears clearance operations: expected SDR 0.4 billion. - Donors committed to finance IDA’s MDRI costs (SDR 3.5 billion during IDA 16 period) in addition to regular contributions. - Debt Relief Trust Fund (DRTF) status (IDA-managed): - Donor pledges and contributions as of June 30, 2011: US$3.9 billion. - Accumulated investment income: US$380 million. - Allocated for disbursement: about US$3.2 billion. - Excluding US$476 million in pending disbursements, remaining resources available for future operations: US$657 million as of June 30, 2011. - US$657 million equivalent to current estimate of debt relief expected to be provided by eligible creditors to the four interim HIPCs and the three pre-decision point HIPCs expected to qualify. *Source: World Bank and IMF staff estimates and details contained in the provided content.* ### 20. For the IMF, available resources are estimated to be sufficient to cover the ### _110811 - 20. For the IMF, available resources are estimated to be sufficient to cover the ### IMF resources and potential additional needs - Available resources are estimated to be sufficient to cover the projected costs of debt relief to all the remaining HIPCs, excluding Somalia and Sudan. - Additional resources will be needed if and when: - Somalia or Sudan embark on the HIPC Initiative process. - Additional countries with outstanding liabilities to the Fund eventually qualify for the HIPC Initiative. - Topping up is required in any future HIPC case. - In all such cases, resources would need to be mobilized from the international community. - Note: Zimbabwe is potentially one such case. ### Taking the Interim HIPCs to the Completion Point - Three of the four interim phase countries—Comoros, Cote d’Ivoire, and Guinea—could reach the completion point in 2012: - Comoros: - Reached its decision point in June 2010. - Could reach the completion point in late 2012 or in 2013, provided its ECF-supported program is put back on track through measures aimed at curbing the wage bill and restarting the civil service and public enterprise reform programs. - Côte d’Ivoire: - Before the political crisis in the first half of 2011, had been expected to reach the completion point in the second half of 2011. - IMF recently approved a new ECF arrangement signaling resumption of progress toward the completion point. - Provided progress on adoption and implementation of a new institutional and regulatory framework for the cocoa/coffee sectors and on implementation of the PRSP, the completion point could be reached by mid-2012. - Guinea: - New government regards reaching the completion point as a high priority. - Seeking an ECF arrangement with the IMF and has started implementation of a poverty reduction strategy (PRS). - If implementation of an ECF-supported program and the PRS are deemed satisfactory, Guinea could reach the completion point by end-2012. - Chad: - Prospects are uncertain due to poor macroeconomic policy performance and limited progress towards other completion point triggers. - Improved macroeconomic policy performance could enable an IMF staff-monitored program, potentially leading to an ECF-supported program and eventual attainment of the completion point. ### The Pre-Decision Point Countries and Zimbabwe - Pre-decision point situation: - Generally challenging. - Eritrea indicated in 2009 it might consider seeking HIPC Initiative assistance but has not reiterated interest since. - Kyrgyz Republic indicated in early 2007 it did not wish to avail itself of HIPC assistance but subsequently expressed interest in the MDRI (participation in the HIPC Initiative is a prerequisite). - Somalia and Sudan remain protracted arrears cases; Somalia remains heavily indebted with no functioning government and uncertain future relations with the international community. - Sudan: - Remains deeply indebted and faces loss of significant export and fiscal receipts following independence of South Sudan on July 9, 2011. - Sudan and South Sudan have reached a tentative agreement on public external debt that would leave all the debt with Sudan (the “zero option”). - This agreement is contingent on South Sudan supporting Sudan in mobilizing creditor support for debt relief and on Sudan reaching the decision point under the HIPC Initiative within two years. - If the zero option proves unworkable, external liabilities would be apportioned between Sudan and South Sudan under a yet to be agreed formula; South Sudan could then face an unsustainable debt burden and need debt relief. - Since early 2011, a working group convened by IMF and IDA staffs and comprising some of Sudan’s main multilateral and bilateral creditors has been engaged in technical work on Sudan’s external debt. - Some main external creditors have indicated broad support for debt relief under established processes including the HIPC Initiative, but some face legal constraints in committing to provision of debt relief. - To reach the decision point, Sudan would need a track record of strong policy performance under programs covering macroeconomic policies and structural and social policy reforms, and progress on preparing a poverty reduction strategy. - Zimbabwe: - Currently not potentially eligible for debt relief under the HIPC Initiative but faces an unsustainable debt situation and may need comprehensive debt relief from the international community. - Was not included in the list of potentially eligible countries in 2006 because it was neither PRGF-eligible nor IDA-only at the time. - A preliminary assessment based on incomplete data suggests Zimbabwe may have met the end-2004 indebtedness criterion, albeit by a small margin. - For the Fund: - If Zimbabwe’s PRGT-eligibility is re-instated following resolution of its arrears to the PRGT, it could be added to the list of countries potentially eligible for HIPC Initiative assistance if the indebtedness assessment were confirmed. - For the World Bank: - The HIPC Initiative income criterion is bound by the end-2004 cutoff; changes in IDA status post-2004 are not relevant. - For Zimbabwe to be deemed eligible for HIPC Initiative relief, a modification of, or exception to, IDA's HIPC Initiative potential eligibility criteria would be required. - Beyond eligibility, to qualify for HIPC relief Zimbabwe would need: - A track record of macroeconomic and structural policy performance under IMF and World Bank-supported programs. - To clear its arrears to IFIs, or have in place plans to clear such arrears. - To develop a poverty reduction strategy. ### Reporting on debt relief progress and LIC debt vulnerabilities - Further streamlining of reporting on HIPC and MDRI progress: - IMF and IDA staffs have closely monitored progress through regular status reports tracking HIPCs through the debt relief process, estimated costs of the HIPC Initiative and MDRI, creditor participation rates, and commercial creditor litigation against HIPCs. - Reporting intensity has been streamlined over time: initially semiannual comprehensive progress reports; in 2003 one progress report converted to a statistical update, subsequently abolished in 2006. - Given most HIPCs have reached the completion point, staffs propose further streamlining by updating pertinent information regularly and posting on dedicated IMF and World Bank website sections. - Information posted would correspond to information currently provided in text tables, figures, and the statistical appendix. - Estimates of costs to various creditors and creditor groups would continue to be updated and released. - Monitoring of debt relief delivery and litigation against HIPCs would be conducted in the context of individual annual debt sustainability analysis and summarized regularly. - Progress of HIPCs in increasing poverty reducing expenditure and reaching their MDGs would continue to be tracked and posted. - Monitoring and reporting on LIC debt vulnerabilities: - Although a third of low income countries (LICs) are either in debt distress or at high risk of debt distress, there is no systemic evidence that debt vulnerabilities among LICs have intensified over the last 18 months (Figure 3). - An April 2010 IMF-IDA report concluded the global financial crisis had a significant impact on LIC debt vulnerabilities but was not expected to result in systemic debt difficulties across LICs. - Relative to early 2010, the number of LICs rated at high risk of debt distress or in debt distress has declined slightly, mainly because some HIPCs previously in debt distress reached the completion point and saw dramatic improvements in debt sustainability outlook. - A quarter of the post-completion point HIPCs are rated at high risk of debt distress, and none is in debt distress (Table 4). - Vulnerabilities explained by narrow export base or weak policy and institutional capacity. - Systemic debt difficulties across LICs warranting new debt relief initiatives are presently not expected. - Debt vulnerabilities should be addressed through sustained efforts including fiscal consolidation, institutional and policy improvements, and more concessional external borrowing terms. - IDA and the IMF provide assistance: - Joint IMF-World Bank LIC Debt Sustainability Framework (DSF) supports LICs’ efforts to achieve development goals without creating future debt problems. - IMF and IDA provide debt management technical assistance through the Debt Management Facility (DMF). - In 2006, IDA adopted a grant allocation framework providing ex ante response to risks of future debt distress, reducing future debt service obligations in response to likelihood of unsustainable debt burdens. - Increased recourse to non-concessional external borrowing by LICs, facilitated in part by IMF’s new debt limits policy and IDA’s adjustments to non-concessional borrowing policy, underscores the need for close monitoring of evolving debt vulnerabilities. - Staffs propose periodic joint IMF-IDA reports on LIC debt vulnerabilities based on LIC DSAs and DSA updates prepared in the preceding 12-month period, and other pertinent information. ### The future of the HIPC Initiative — background - The HIPC Initiative was not intended to be permanent; effectively closed to new entrants in 2006 when the sunset clause was allowed to take effect and the list of potentially eligible HIPCs was ring-fenced. - The original design included a “sunset clause,” a two-year period within which members had to adopt an upper credit tranche-type program supported by the IMF (the “performance eligibility criterion”), motivated to minimize moral hazard and encourage early reform. - After four extensions, the sunset clause was allowed to take effect at end-2006 but countries potentially eligible were grandfathered. - A 2006 Board-endorsed ring-fencing exercise restricted HIPC eligibility to countries meeting income and indebtedness criteria based on end-2004 data, or where needed data were not available, countries that might be assessed to have met these criteria at end-2004 in future. - Ring-fenced countries can only qualify for debt relief if their debt burden remains above relevant HIPC debt sustainability thresholds based on most recent actual debt data and if they remain IDA-only and PRGT-eligible. - Table 5 lists status of HIPC Initiative implementation and ring-fencing at end-2006 (as presented in the source). *Source: IMF/World Bank text as provided in the supplied content unit.* ### 32. Considerable progress has been achieved under the HIPC Initiative since 2006. ### _110811 - 32. Considerable progress has been achieved under the HIPC Initiative since 2006. ### Progress since 2006 - Seven countries reached the decision point during this period. - Six of these seven were among the 11 countries included in the 2006 ring-fenced list; the seventh, Afghanistan, was later added when assessed to have met the income and debt criteria at end-2004. - One country, Sri Lanka, graduated from PRGT-eligibility, and thereby HIPC Initiative eligibility, during this period. - Remaining ring-fenced HIPCs yet to reach the decision point: Eritrea, Kyrgyz Republic, Somalia, and Sudan. - Three additional countries—Bhutan, Lao P.D.R., and Nepal—have expressly indicated that they do not wish to avail themselves of assistance under the HIPC Initiative, and remain potentially eligible for assistance. - Zimbabwe faces an unsustainable debt burden but is not a HIPC; its potential eligibility was not determined in 2006 because of lack of data and remains in doubt. - Summary assessment: the HIPC Initiative is largely complete; only a few potentially eligible and interested HIPCs are yet to qualify. Among these, only Sudan has expressed keen interest in assistance; Eritrea’s intentions are unclear; Somalia’s engagement prospects are highly uncertain. Four countries have indicated they do not wish to avail themselves of HIPC Initiative assistance but remain potentially eligible. ### Two main options considered by IMF and IDA Boards - Background: Boards expressed little support for making the HIPC Initiative a permanent facility or for closing it down. - Permanence: would be inconsistent with original intent, not justified by current LIC debt sustainability outlook, and beset with moral hazard. - Fixed timeline closure (e.g., within two years): could fail to address debt situations of some potentially eligible countries and would create the need for either a new framework or case-by-case handling, which would be politically challenging, time consuming, and costly. - Two preferred options: 1. Maintaining the status quo: - Initiative remains closed to new entrants. - All currently potentially eligible HIPCs (including those that indicated they do not wish to avail themselves of assistance or those later assessed to have met end-2004 criteria) would retain potential eligibility indefinitely. - Advantage: affords countries opportunity to obtain debt relief on a timetable suitable to individual circumstances (assuming continued qualification). - Drawback: perpetuates moral hazard; amount of debt relief committed at decision point depends on most recent debt stock information. 2. Adding new income and indebtedness criteria (end-2010) and further ring-fencing: - Legally feasible to further ring-fence potentially eligible countries based on additional eligibility criteria relevant to IMF Articles (and related Executive Board policies). - An indebtedness criterion at a date later than end-2004 (e.g., end-2010) could be imposed as an additional criterion for HIPC eligibility (only indebtedness criterion would be binding for the Fund). - On IDA’s side, Board could revise Initiative terms to allow otherwise eligible countries to permanently exit via amendment of eligibility criteria or future ring-fencing. - Likely outcome: exclusion of most countries that have indicated they do not wish to avail themselves of assistance, as their debt ratios have fallen below HIPC thresholds; once determined no longer potentially eligible, they could not later avail themselves of HIPC relief even if debt ratios rose above thresholds. - Note: HIPCs that fail to qualify under the Initiative would no longer be eligible for debt relief under the Multilateral Debt Relief Initiative. - Staff recommendation: - IMF and IDA staffs propose implementing the second option (adding end-2010 income and indebtedness criteria and further ring-fencing). - Expected benefits: eliminate considerable moral hazard; underscore successful implementation to date; meet expressed desires of most countries not wishing assistance. - Communication: changes should be carefully communicated, emphasizing successful implementation to date. - Operational impact: further ring-fencing would not affect delivery of debt relief for interim countries that have not reached completion point, nor prevent pre-decision point HIPCs expressing interest from reaching decision point according to reform capacity. ### Country assessments against end-2010 income and indebtedness criteria - All remaining potentially eligible countries met the income criterion at end-2010 (they remained PRGT-eligible and IDA-only). - Indebtedness outcomes at end-2010: - Did NOT meet indebtedness criterion: Bhutan, the Kyrgyz Republic, Lao PDR. - Met indebtedness criterion: Eritrea, Nepal, Somalia, Sudan. - Effect of adding end-2010 criteria: would retain only Eritrea, Nepal, Somalia, and Sudan on the list of potentially eligible HIPCs. - Zimbabwe: - Not assessed as part of ring-fencing exercise; proposal would not affect Zimbabwe’s possibility to obtain HIPC assistance. - Preliminary analysis indicates Zimbabwe would meet the proposed end-2010 indebtedness criterion. - Conditions in paragraph 24 continue to determine how Zimbabwe could become potentially eligible. ### Nepal as a special case and remittances issue - Nepal’s external debt is deemed sustainable under the LIC DSF: - Nepal is rated at moderate risk of debt distress under the LIC DSF. - External public or publicly guaranteed (PPG) debt at end-2010 is well below all relevant DSF thresholds. - HIPC threshold discrepancy: - Present value (PV) of PPG debt-to-exports ratio exceeded 170 percent at end-2010, above the HIPC threshold of 150 percent, after application of traditional debt relief mechanisms. - Discrepancy arises because remittances exceed 20 percent of GDP in Nepal and are more than twice as large as exports of goods and services. - DSF includes remittances in assessments; HIPC calculations exclude remittances per previous Board views. - If remittances were included in the denominator for Nepal, PV of PPG debt-to-exports ratio would fall to below 60 percent. - Staff view on modifying HIPC framework to include remittances: - Staffs do not favor modifying the HIPC Initiative to include remittances at this late stage. - Rationale: - Data availability and quality on remittances remain uneven across countries. - Adding remittances could disqualify countries that qualify under current rules and could lower assistance amounts for future HIPCs relative to already-qualified HIPCs, undermining uniformity of treatment. - Rules to avoid undesirable consequences would be complex and lack transparency. - Although inclusion would be economically appealing for Nepal and align with Nepalese authorities’ wishes, staffs do not support major late-stage modification. ### Issues for discussion (posed to Directors) - Do Directors agree with proposals for further streamlining of reporting of progress under the initiatives, and for periodic reports on debt vulnerabilities in LICs, including HIPCs? - Do Directors agree with the proposals for the addition of income and indebtedness criteria for end-2010 to the HIPC Initiative framework and further ring-fencing of potentially eligible HIPCs based on these criteria? - Do Directors agree that introducing remittances into the HIPC Initiative framework at this late stage would not be appropriate? ### Annex I — Key country assessments and indebtedness figures at end-2010 (from authorities' data submissions and staff estimates) - General methodology notes: - Assessment requires macroeconomic data on GDP, exports of goods and services, and central government revenue (excluding grants), plus sufficiently detailed external PPG debt data to calculate PV and simulate traditional debt relief mechanisms (TDRM). - Loan-by-loan data used where available; when not, close approximation from disaggregated data separating pre-cutoff, post-cutoff and non-ODA/ODA debt. - For the seven ring-fenced countries, sufficiently detailed data was obtained to allow end-2010 indebtedness assessment using the same methodology as the 2006 ring-fencing exercise. - Full loan-by-loan data: Nepal and Sudan. - Partial loan-by-loan data: Eritrea and Somalia (estimates represent lower bounds as non-Paris Club and commercial debt not included). - For Bhutan, Kyrgyz Republic, Lao PDR, authorities provided disaggregated data using staff template. - Macroeconomic data obtained from recent IMF and World Bank country reports and country teams. - Country-specific end-2010 indebtedness metrics and determinations: - Bhutan: - PV of external PPG debt at end-2010 = 125 percent of exports of goods and services. - PV of external PPG debt at end-2010 = 180 percent of central government revenue. - Determination: did not meet HIPC threshold for either export or fiscal windows at end-2010. - Eritrea: - Based on multilateral and Paris Club debt data, PV of external PPG debt at end-2010 was at least 596 percent of exports of goods and services. - Determination: met HIPC threshold for the export window at end-2010. - Kyrgyz Republic: - PV of external PPG debt at end-2010 = 75 percent of exports of goods and services. - PV of external PPG debt at end-2010 = 184 percent of central government revenue. - Determination: did not meet HIPC threshold for either export or fiscal windows at end-2010. - Lao P.D.R.: - PV of external PPG debt at end-2010 = 113–117 percent of exports of goods and services. - PV of external PPG debt at end-2010 = 236–246 percent of central government revenue. - Note: range reflects stock-flow inconsistency regarding external commercial debt; TDRM estimation covered only Paris Club debt and is therefore a lower bound. - Determination: did not meet HIPC threshold for either export or fiscal windows at end-2010. - Nepal: - Loan-by-loan data indicate PV of external PPG guaranteed debt at end-2010 = 173 percent of exports of goods and services. - Loan-by-loan data indicate PV of external PPG debt at end-2010 = 112 percent of central government revenue. - Determination: met HIPC threshold for the export window at end-2010. - Caveat: under LIC DSF, remittances make Nepal’s external debt sustainable. - Somalia: - Based on multilateral and Paris Club debt data, PV of external PPG debt at end-2010 was at least 410 percent of exports of goods and services. - Fiscal revenue data: N/A. - Determination: met HIPC threshold for the export window at end-2010. - Sudan: - Loan-by-loan data indicate PV of external PPG debt at end-2010 = 184 percent of exports of goods and services. - Loan-by-loan data indicate PV of external PPG debt at end-2010 = 201 percent of central government revenue. - Determination: met HIPC threshold for the export window at end-2010. - Note: export denominator is simple average of exports over 2008–10; Sudan will lose a large share of its export base following the independence of South Sudan. - Memorandum item: - Bhutan, the Kyrgyz Republic, and Lao PDR would not qualify for HIPC Initiative assistance based on end-2010 data, while Nepal, Eritrea, Somalia, and Sudan would. *Source: Excerpt from IMF/IDA staff paper (text and tables provided in the source content).* ### Annex II. HIPC Initiative—Methodological Aspects Related to Determining ### Annex II. HIPC Initiative—Methodological Aspects Related to Determining HIPC Initiative Eligibility ### Assessment of potential eligibility - A country is considered potentially eligible for debt relief under the HIPC Initiative if both conditions are satisfied: - (a) it is IDA-only and PRGT eligible; and - (b) its end-December 2004 debt burden indicators are above the thresholds established under the HIPC Initiative after full application of traditional debt relief mechanisms. - Thresholds: - 150 percent for the ratio of the present value of debt (PV) to exports of goods and services. - 250 percent for the ratio of PV to fiscal revenue. - To qualify under the second criterion a country must also have: - exports of goods and services to GDP above 30 percent; and - fiscal revenue to GDP above 15 percent. ### Debt (scope and treatment) - Debt covered under the Initiative is limited to medium and long-term public and publicly guaranteed external debt with the following exceptions: - short-term debt that has been in arrears for more than one year; - private sector debt that has previously been covered by Paris Club agreements; - debt of public enterprises (defined as at least 50 percent owned by the government) regardless of whether the debt is formally publicly guaranteed; - debt of public enterprises being privatized if that debt remains a liability of the government. - Only disbursed and outstanding debt is considered; future disbursements are excluded even if they relate to existing commitments. ### Debt service projection - Debt service is projected on a loan-by-loan basis and reflects the disbursed and outstanding portion of the loans. - When loans are repaid on a commitment basis, debt service is projected using the contractual repayment profile pro-rated by the disbursed amount. ### Present Value (PV) calculation and discount rates - The PV is the discounted value of the projected debt service payments and is used as the basis for calculating the amount of debt relief once full delivery of traditional debt relief is assumed. - Currency-specific discount rates: - average OECD Commercial Interest Reference Rates (CIRRs) calculated over the six-month period leading up to the cutoff date for the debt stock. - For units of account from various multilateral creditors, the discount rate is the weighted average of the CIRRs for the currencies in the basket. - The SDR discount rate is used for those currencies for which a CIRR is not available, unless they are formally pegged to a currency for which a CIRR is available, in which case the CIRR of the peg is used. ### Traditional debt relief - Defined as a Paris Club stock-of-debt operation on Naples terms (with a 67 percent PV reduction on non-ODA debt) and action on at least comparable terms on other official bilateral and commercial debt. - It is the basis for which qualification for debt relief is assessed in HIPC Initiative documents even when a country has never rescheduled its debts. ### Cut-off date - The cut-off date is the date (established at the time of a country’s first Paris Club rescheduling) before which loans must have been contracted in order for their debt service to be eligible for rescheduling. - New loans extended after the cut-off date are not subject to future rescheduling. - A June 1999 cut-off date (the effective date of the Cologne Agreement) is applied to countries that have not had a Paris Club rescheduling. ### Official Development Assistance (ODA) - ODA is defined by the OECD as credits (including grant and loan packages): - (a) aimed at promoting economic development and welfare of developing countries; and - (b) that are concessional in character and contains a grant element of at least 25 percent (using a fixed discount rate of 10 percent). - ODA is provided to developing countries and to multilateral institutions by OECD/DAC members and other countries through their official agencies, including state and local governments, or by their executive agencies; ODA is also provided to developing countries by multilateral institutions. - Excluded from ODA (and therefore considered non-ODA) are defense related lending, lending on commercial terms and by export credit agencies. ### Exports (denominator for PV-to-exports ratio) - The exports denominator corresponds to the three-year backward-looking average exports of goods and non-factor services, consistent with the IMF Balance of Payments Manual, 5th edition, 1993. - The export base is gross and is not adjusted to reflect any netting out of imported inputs, debt service payments, etc. - Worker’s remittances and transit trade (goods that cross frontiers without changing ownership) are excluded from the denominator. ### Revenue (denominator for PV-to-revenue ratio) - Revenue is defined as current central government revenue excluding grants. - Rationale: consistent with the objective of releasing government resources from external debt service, which in HIPCs is mostly undertaken by the central government. - Note: information on revenue on a wider basis is not available for most HIPCs and using a broader base only when available would penalize countries with better statistical systems. ### Exchange rates and currency conversion - The PV of debt is converted from its currency-specific components into U.S. dollars using the exchange rates prevailing at the end of the base year for the debt stock. - Where the balance of payments is presented in a currency other than the U.S. dollar, exports are converted to U.S. dollars using the average exchange rate for the corresponding year. - The three-year export average used as the denominator for the PV of debt-to-exports ratio is derived as a second step after annual exports have been converted into U.S. dollars. - For the calculation of the PV of debt-to-revenue ratio, current central government revenue is converted into U.S. dollars using the average exchange rate for the year. --- ### Annex III. Country Status under the Enhanced HIPC Initiative — Selected country status entries (excerpts) - Pre-Decision-Point Countries (selected entries): - Eritrea: - Risk of debt distress: In debt distress (December 2009). - PRSP status: No recent PRSP and no work ongoing towards its preparation. - IMF program: No ongoing discussions for a Fund-supported program. 2009 Article IV Consultation concluded in December 2009. - Decision-point date: Uncertain. - Kyrgyz Republic: - Risk of debt distress: Moderate (June 2011). - PRSP status: New Government approved Medium-Term Development Program for 2012–2014. - IMF program: A three year Extended Credit Facility (ECF) arrangement was approved on June 20, 2011. The first review is expected to be completed in December 2011. - Decision-point date: No intention*. - Note: * The decision-point document was prepared in February 2007 but withdrawn at the request of the Government, based on its intention to not move to decision-point. Based on 2010 debt data, the Kyrgyz Republic appears well below the HIPC thresholds. - Somalia: - Risk of debt distress: N/A. - PRSP status: There is no PRSP in place and one is not expected in the near term. - IMF program: Somalia has not had an IMF supported program since 1987; lack of economic data precludes assessment. - Decision-point date: Uncertain. - Sudan: - Risk of debt distress: In Debt Distress (June 2010). - PRSP status: Authorities finalizing an Interim PRSP (I-PRSP). - IMF program: A Staff-Monitored Program (SMP) for July 2009–December 2010 expired end-December 2010; Second Review concluded February 9, 2011. Staff is discussing a new SMP; finalization awaits clarity on relations with South Sudan. - Decision-point date: Within two years, but starting point unclear. - Interim Countries — Summary by Country (selected entries): - Chad: - PRSP: PRSP covering 2008–2011 approved April 2008; new PRSP for 2012–2015 being prepared. - Risk of debt distress: Moderate (June 2011). - IMF program: Last PRGF-supported program expired without completion of a review; SMP for April–October 2009 expired without completion of a review. - Planned completion-point date: 2013. - Comoros: - PRSP: PRSP covering 2010–2014 approved September 2009; first annual progress report finalized May 2011. - Risk of debt distress: In debt distress (May 2010). - IMF program: Three year ECF arrangement approved September 2009; first review completed June 2010. - Planned completion-point date: Late - 2012. - Cote D’Ivoire: - PRSP: Full PRSP adopted February 2009; second annual report covering 2010 and 2011 expected first half of 2012. - Risk of debt distress: In debt distress (November 2011). - IMF program: 2009 ECF arrangement cancelled; RCF assistance provided in July 2011; negotiation mission for new ECF scheduled for IMF Board approval in October/November 2011. - Planned completion-point date: Mid - 2012. - Guinea: - PRSP: PRSP-II approved August 2007 and extended to cover 2011–12; PRSP III being prepared. - Risk of debt distress: In debt distress (December 2010). - IMF program: SMP approved by the Fund Board in July 2011; intended to pave the way for a new ECF starting January 1, 2012. - Planned completion-point date: Late - 2012. - Interim Countries — Status of Completion-Point Triggers (selected summaries): - Chad: - PRSP: Partially completed. - Macroeconomic stability: Weak progress. - PFM: Slow progress; some progress in budget preparation but execution continues to be slow in priority sectors; public expenditure tracking survey for primary education being undertaken. - Social sector: Good progress on education trigger but earlier progress reversed on health trigger; quality of spending in health and education remains a problem. - Debt management: N/A. - Governance/transparency/anticorruption: Earlier progress has deteriorated; implementation of governance strategy and action plan needs acceleration; Chad accepted in April 2010 as an EITI candidate but progress is slow. - Structural reforms: N/A. - Comoros: - PRSP: Good progress; first annual progress report transmitted May 2011. - Macroeconomic stability: Discussions toward conclusion of an IMF ECF review could resume in 2012 once final fiscal data for 2011 are available. - PFM: Good progress; budget execution report produced; terms of reference for integrated public finance management finalized; new public procurement code submitted to parliament. - Social sector: Slow progress; progress in education and health hard to monitor. - Debt management: Good progress; installation of debt management software expected Spring 2012; satisfactory public debt report produced June 2011; decree to establish debt management office adopted. - Governance/transparency/anticorruption: Good progress; civil service reforms underway; new anti-corruption commission established. - Structural reforms: Good progress; business plan for privatization of Comoros telecom underway. ### HIPC Completion-Point Countries: Progress towards Achieving the MDGs (selected snapshot) - The table reports country-by-country MDG status categories: "On track", "Possibly on track", "Off track", "Slow/Off track", "No information", "Partially on track", or "On track (except for sanitation)", for the eight MDG goals. - Examples: - Afghanistan: ERADICATE EXTREME POVERTY AND HUNGER — Off track; ACHIEVE UNIVERSAL PRIMARY EDUCATION — Possibly on track; REDUCE CHILD MORTALITY — On track; DEVELOP A GLOBAL PARTNERSHIP FOR DEVELOPMENT — Possibly on track. - Benin: ACHIEVE UNIVERSAL PRIMARY EDUCATION — On track; DEVELOP A GLOBAL PARTNERSHIP FOR DEVELOPMENT — Off track. - Ethiopia: ERADICATE EXTREME POVERTY AND HUNGER — On track; ACHIEVE UNIVERSAL PRIMARY EDUCATION — On track; DEVELOP A GLOBAL PARTNERSHIP FOR DEVELOPMENT — On track. - Ghana: ERADICATE EXTREME POVERTY AND HUNGER — On track; ACHIEVE UNIVERSAL PRIMARY EDUCATION — On track; DEVELOP A GLOBAL PARTNERSHIP FOR DEVELOPMENT — Off track. - Footnote on methodology: - The World Bank determines whether a country is on or off track to meet a given MDG by 2015 when at least two observations are available after 1990, with a sufficient number of years separating them. It compares recorded progress with that needed to reach the MDG under the assumption that progress becomes increasingly difficult the closer countries get to the goal; technically this compares the annual growth rate between 1990 and today with the constant growth rate required to reach the MDG in 2015 from the 1990 situation. *Source: Annex II and Annex III excerpts from the provided IMF document.* ### Annex IV. Country Coverage, Data Sources, and Assumptions for the HIPC Initiative and ### Annex IV. Country Coverage, Data Sources, and Assumptions for the HIPC Initiative and MDRI Costing Exercise ### Country coverage - Costing analysis covers 36 post-decision-point HIPCs: - Afghanistan, Benin, Bolivia, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Côte d’Ivoire, Comoros, Democratic Republic of the Congo, Republic of Congo, Ethiopia, The Gambia, Ghana, Guinea, Guinea-Bissau, Guyana, Haiti, Honduras, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, São Tomé and Príncipe, Senegal, Sierra Leone, Tanzania, Togo, Uganda, and Zambia. - Costing analysis for pre-decision-point countries is based on 3 HIPCs: - Eritrea, Somalia, and Sudan. - Note: Kyrgyz Republic is not included in cost estimates, as its indebtedness ratio at end-2008 is estimated at below the HIPC Initiative threshold. ### Data sources and vintage - Staff estimates are based on: - HIPC Initiative decision and completion-point documents for all 36 post-decision-point countries. - ―Heavily Indebted Poor Countries (HIPC Initiative) – List of Ring-Fenced Countries that Meet the Income and Indebtedness Criteria at end-2004" for the 3 pre-decision-point HIPCs. - Data were updated through end-July 2010. ### Costing scope and principal assumptions - Calculations of total costs include costs under: - the original HIPC Initiative framework, - the enhanced HIPC Initiative framework, - and the MDRI. - Cost estimates for the HIPC Initiative are based on debt data after full use of traditional debt-relief mechanisms. - Costing for the MDRI uses specified exchange-rate assumptions (see next subsection). - Update of cost estimates in present-value (PV) terms: - The cost of HIPC Initiative assistance calculated in PV terms at the time of the decision-point is discounted to end-2010 using the average interest rate applicable to the debt relief. - The rate was estimated at 3.9 percent and corresponds to the implicit long-term interest rate of currencies that comprise the SDR basket over the period 2008–2010, calculated as a 6-month average of the Commercial Interest Reference Rate (CIRR) over this period, weighted by the participation of the currencies in the SDR basket. - The same rate (3.9 percent) was used to calculate MDRI debt relief in end-2010 PV terms. ### Exchange rate rules applied for MDRI calculations - IDA and AfDF: - FY07 - FY08: initial MDRI Trust Fund replenishment rate of 1.477380 U.S. dollars per SDR was applied. - FY09 - FY11: cost estimates based on the IDA15 foreign exchange reference rate of 1.524480 U.S. dollars per SDR. - FY11 onward: cost estimates based on the IDA16 provisional foreign exchange reference rate of 1.50233 U.S. dollars per SDR. - IMF: - The exchange rate of the date that debt relief was delivered was used; where debt was not yet delivered, the rate as of end-December 2010 was used. - IaDB: - Currency units in U.S. dollars at end-2006 were used. ### Selected high-level cost and delivery figures (from consolidated tables) - Status as of end-July 2011 (Table 4): - 32 Post-Completion-Point HIPCs — Assistance under HIPC Initiative and MDRI: 71,767; Assistance Delivered: 46,793; Total HIPC and MDRI (sum of nominal assistance columns shown): 117,702. - Total Debt Relief Committed (all HIPCs and non-HIPCs shown in the table): 76,378; 46,976; 122,495 (values presented in the Table as three column totals). - Total Debt Relief Committed (Table 4, summary row): 76,378 46,976 122,495 (In millions of U.S. dollars; columns correspond to PV at decision point / Nominal MDRI / Total nominal). - Total Debt Relief Committed and Delivered (aggregate indicators appearing across tables): - Total Debt Relief Committed (Table 4 summary): 122,495 (sum in nominal terms as presented). - Total Debt Relief Committed (Table 5 / creditor summary) — total reported: 27,113 (Total column) and Total delivering or committed to deliver debt relief: 16,477 (Delivering/Committed column) with Percent of Total Cost 61.1 (columns as presented). - World Bank (IDA) assistance (Table 6A, status as of end-September 2011): - TOTAL (32 Post-Completion-Point HIPCs): Committed Assistance (World Bank) 15,653.1; Committed Assistance in end-2010 PV Terms 12,591.8; Delivered Assistance in end-2010 PV Terms 7,266.1; Delivered Assistance in Nominal Terms 31,667.9; Delivered Assistance in end-2010 PV Terms (combined HIPC Initiative and MDRI) 19,715.3; Total Committed Assistance under HIPC Initiative and MDRI in end-2010 PV Terms 31,878.1; Delivered Assistance in end-2010 PV Terms 26,552.3. (Table shows country-level breakdowns supporting these aggregates.) - IMF MDRI delivery and totals (Table 7A and 7B): - IMF MDRI Trusts and related deliveries are tabulated by country in SDR and converted to U.S. dollars; the IMF total MDRI nominal PV presented in Table 7B aggregate rows is 3,324.0 (MDRI Trusts row) and TOTAL MDRI to HIPCs and non-HIPCs 3,538.3 (total shown in the IMF table in millions of U.S. dollars, with accompanying year-by-year breakdowns). - Paris Club bilateral creditors (Tables 11 and 12): - Paris Club creditors' total HIPC Initiative Assistance Committed to the 36 Post-Decision-Point HIPCs is shown in Table 11 total row as 21,788 (sum of column totals in Table 11). - Table 12 reports Paris Club Official Bilateral Creditors' delivery of debt relief for 32 Post-Completion-Point HIPCs: TOTAL HIPC Initiative Assistance Committed 20,151.5; TOTAL HIPC Initiative Assistance Provided 20,151.5; Debt Relief Beyond HIPC Initiative Provided 11,948.9; Total Debt Relief Provided 32,100.4; and Debt-Relief-Provided-to-Debt-Relief-Committed Total (In percent) 159 (as in table). - Country-specific Paris Club totals are shown for each HIPC (examples: Congo, Dem. Rep.: HIPC Initiative Assistance Committed 5,322.0; Benin 93.4; Mozambique 1,548.8; Zambia 1,597.2). - Donor pledges to the Debt Relief Trust Fund (Table 10): - Total donor contributions and balances shown: TOTAL 6,237 (Resources Contributed), Accumulated Investment Income 587, Resources Allocated for Debt Relief Grants (5,769) noting the parenthetical presentation in the table; Available Balance 1,053. (Table shows donors individually; sub-totals: Sub-Total bilateral donors 3,871; Sub-Total multilateral donors 2,366.) - Delivery status by multilateral creditors (Tables 6, 8, 9): - AfDB Group (Table 8A): 26 Post-Completion-Point HIPCs — TOTAL Committed Assistance in PV terms as of decision point 3,410.7; Committed Assistance in end-2010 PV Terms 4,638.6; Delivered Assistance in end-2010 PV Terms 2,855.7; Total Committed Assistance (HIPC + MDRI) in end-2010 PV Terms 7,672.8; Delivered Assistance in end-2010 PV Terms 6,972.1. - IaDB (Table 9): 5 Post-Completion-Point HIPCs — TOTAL Committed Assistance 1,183.0; Committed Assistance in end-2010 PV Terms 1,715.1; Delivered Assistance in end-2010 PV Terms 966.0; Total (HIPC + 2007 Initiative) in end-2010 PV Terms 4,369.0; Delivered in end-2010 PV Terms 3,835.5. ### Data coverage notes and measurement definitions (as appearing in the source) - Table coverage: - Tables and aggregates generally refer to 36 post-decision-point HIPCs unless specified otherwise. - Debt service paid covers 2001-2010; debt service due covers 2011-2015. - For post-completion-point HIPCs, debt service due assumes full HIPC Initiative debt relief, additional bilateral assistance provided by some Paris Club creditors on a voluntary basis, and MDRI. - For pre-completion-point countries, debt service due includes interim debt relief and full HIPC Initiative and MDRI assistance expected at the projected completion point. - Poverty-reducing expenditures: - Table 1 and Table 3 summarize poverty-reducing expenditures and ratios for the 36 post-decision-point HIPCs (examples: Poverty Reducing Expenditures 2001-2015 row shows a sequence including 6,504 in 2001 rising to 46,791 in 2015 in millions of U.S. dollars). - Average ratios shown in Table 1: Debt Service/Exports and Debt Service/GDP series are reported year-by-year (examples: Debt Service/Exports 2001 = 13.0; Debt Service/GDP 2001 = 3.1). Poverty-Reducing Expenditure/Government Revenue and Poverty-Reducing Expenditure/GDP are also reported annually (examples: Poverty-Reducing Expenditure/Government Revenue 2001 = 44.5; Poverty-Reducing Expenditure/GDP 2001 = 6.2). - Tabular presentation: - Country-specific multi-year tables (Tables 2–3, 6B, 8B, etc.) present detailed annual debt service, debt service after enhanced HIPC and MDRI, and poverty-reducing expenditure flows for 2001–2015 (actuals and projections). These tables include many country-specific numeric sequences, percent-of-export and percent-of-GDP rows, and notes on fiscal year reporting, decision/completion point years, and data limitations. *Source: Annex IV. Country Coverage, Data Sources, and Assumptions for the HIPC Initiative and MDRI Costing Exercise (source content provided).* --- _Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2011/_110811.pdf_