Debt Relief for Low-Income Countries and the HIPC Initiative

IMF Working Papers, March 1, 1997

Source details

Canonical URL

Debt Relief for Low-Income Countries and the HIPC Initiative

Other formats

• Markdown version
• Structured JSON version
• Bundle manifest

Bibliographic details

• Authors: Kamau Thugge, Anthony R. Boote
• Published: March 1, 1997
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781451844108.001

Summary

• The paper describes the debt burden of low-income countries and the traditional mechanisms implemented by the international community to alleviate this burden.
• While these mechanisms are sufficient to reduce the external debts of many heavily indebted poor countries (HIPCs) to sustainable levels—provided these countries implement sound economic policies—they are likely insufficient for a number of countries.
• To deal with these cases, the World Bank and the IMF have jointly proposed and implemented the Heavily Indebted Poor Countries (HIPC) Initiative.
• The paper describes the HIPC Initiative and suggests that it should enable HIPCs to exit from the debt rescheduling process.

Findings on debt burden and traditional mechanisms

• Traditional international mechanisms can reduce external debts to sustainable levels for many HIPCs conditional on sound economic policies.
• A subset of HIPCs face debt burdens that are likely insufficiently addressed by traditional mechanisms alone, necessitating additional measures.

HIPC Initiative: purpose and expected effect

• Jointly proposed and implemented by the World Bank and the IMF.
• Intended to deal with HIPCs whose debts remain unsustainable after traditional mechanisms.
• Suggested outcome: enable HIPCs to exit from the debt rescheduling process.

Subject areas and keywords (as presented)

• Subject: Asset and liability management, Debt burden, Debt reduction, Debt relief, Debt service, External debt
• Keywords: Debt burden, debt problem, Debt reduction, debt reduction option, Debt relief, Debt service, debt service due, debt-service difficulty, debt-service reduction, debt-service reduction option, debt-servicing difficulty, debtor country, External Debt, Heavily Indebted Poor Countries Initiative, HIPCs debt-management capacity, IBRD debt, IDA debt-reduction operation, net present value, NPV reduction, right, Sub-Saharan Africa, WP

Content in this bundle

• Debt Relief for Low-Income Countries and the HIPC Initiative - WP/97/24
  • Debt Relief for Low-Income Countries and the HIPC Initiative - WP/97/24 (Markdown version)
  • Debt Relief for Low-Income Countries and the HIPC Initiative - WP/97/24 (PDF)