From Toronto Terms to the HIPC Initiative : A Brief History of Debt Relief for Low-Income Countries

Author/Editor:

Christina Daseking ; Robert Powell

Publication Date:

October 1, 1999

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The low-income country debt crisis had its origins in weak macroeconomic policies, and official creditors’ willingness to take risks unacceptable to private lenders. Payments problems were initially addressed through nonconcessional reschedulings and new lending that maximized financing while containing the budgetary costs for creditors. This led to an unsustainable buildup in debt stocks. More recently, debt ratios have improved, reflecting both adjustment and substantial debt relief. The paper estimates debt relief initiatives since 1988 have cost creditors at least $30 billion, and possibly much more. This compares with the estimated costs of about $27 billion under the enhanced HIPC Initiative.

Series:

Working Paper No. 99/142

English

Publication Date:

October 1, 1999

ISBN/ISSN:

9781451856231/1018-5941

Stock No:

WPIEA1421999

Format:

Paper

Pages:

29

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