## Debt Relief for Low-Income Countries and the HIPC Initiative

_IMF Working Papers, March 1, 1997_

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

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### 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

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/debt-relief-for-low-income-countries-and-the-hipc-initiative-2133_