IMF Working Papers

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

By Christina Daseking, Robert Powell

October 1, 1999

Download PDF More Formats on IMF eLibrary Order a Print Copy
More formats on IMF eLibrary Order a Print Copy

Preview Citation

Format: Chicago

Christina Daseking, and Robert Powell. "From Toronto Terms to the HIPC Initiative: A Brief History of Debt Relief for Low-Income Countries", IMF Working Papers 1999, 142 (1999), accessed November 7, 2025, https://doi.org/10.5089/9781451856231.001

Export Citation

  • ProCite
  • RefWorks
  • Reference Manager
  • BibTex
  • Zotero
  • EndNote
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.

Subject: Asset and liability management, Debt reduction, Debt relief, Debt rescheduling, Debt service, External debt, Financial institutions, Stocks

Keywords: Cash flow, Debt forgiveness, Debt reduction, Debt reduction, Debt relief, Debt rescheduling, Debt service, Discount rate, External Debt, Global, HIPCs, Low-Income Countries, Paris LIC Paris Club, Present value, PV reduction, Reduction option, Stocks, WP

Publication Details

You May Also Be Interested In...

Liberia: 2025 Article IV Consultation and Second Review Under the Extended Credit Facility Arrangement and Request for a Waiver of Nonobservance of a Continuous Performance Criterion-Press Release; Staff Report; and Statement by the Executive Director for Liberia

November 7, 2025

Debt Vulnerabilities in Low-Income Countries Recent Developments and Trends

October 31, 2025

Uruguay: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Uruguay

October 30, 2025

Mexico: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Mexico

October 27, 2025