Debt Initiative for the Heavily Indebted Poor Countries (HIPC) A Factsheet
Heavily Indebted Poor Countries (HIPC) - Documents
Heavily Indebted Poor Countries (HIPC) Initiative — Country Implementation Status NotesPrepared by the Staffs of the IMF and World Bank
May 11, 2001
The management and staff of the IMF and World Bank are continuing to work in partnership with governments, other creditors and donors to help potentially HIPC-eligible countries put in place the economic and social policies that will enable them to access and use HIPC relief to enhance growth and poverty reduction. In response to requests from several Executive Directors, this note provides information on the status of 12 HIPC-eligible countries that are expected to reach decision points in 2001 and beyond. From the group of 41 HIPCs (Table 1), this excludes those countries that have already reached their decision point under the enhanced Initiative (22); that are considered sustainable under the Initiative (4)1; and for which there is inadequate data and/or that have protracted arrears (3).2
Following a period of conflict, an interim peace accord was signed in August 2000. However, sporadic fighting continues. Arrangements for a ceasefire, the selection of a transition president and electoral modalities for transitional institutions remain to be decided. The PRSP process was launched in July 2000 and authorities are preparing an I-PRSP. An interim country assistance strategy was presented to the Bank Board in October 1999; the World Bank is currently supporting Burundi with an Emergency Economic Recovery credit and a number of other projects. The IMF staff in February 2001 discussed with the authorities an economic framework for 2001 that could form the basis for an economic program supported under the Fund's emergency post-conflict assistance policy, assuming the concerns of the international community regarding the peace process are addressed and donor support is resumed. This could be followed by a three-year PRGF arrangement in 2002. The timing of Burundi's decision point would need to be determined in light of the recent Board discussion of post-conflict assistance to HIPCs. Burundi is current in its obligations to the Bank and the Fund, but in arrears to the AfDB.
Central African Republic
In January, the Fund's Executive Board approved a second annual arrangement under the PRGF, and the World Bank disbursed the second tranche of the Fiscal Consolidation Credit (FCC). A floating tranche under the FCC may be disbursed later this year. That same month, the Executive Boards of the Bank and the Fund also reviewed the I-PRSP prepared by the Government, and considered that it provided a good basis for concessional assistance from both institutions. The authorities expect to complete an I-PRSP progress report by September 2001. A joint Fund-Bank mission will visit Bangui in May 2001 to review progress under the second annual PRGF arrangement and to prepare a Debt Sustainability Analysis (DSA). Subject to satisfactory program implementation and the authorities' preparation of a progress report on the poverty reduction strategy, scheduled for September, a decision point under the HIPC Initiative could be considered for December 2001, at the same time as the Fund Board would consider the next PRGF review and a request for a new three-year PRGF arrangement.
In July 2000, the Boards of the Fund and the Bank considered the I-PRSP and the preliminary HIPC document and declared Chad eligible for assistance under the enhanced HIPC Initiative. Policy slippages in the second half of 2000 led to a delay in presenting the HIPC decision point document to the Boards. Since November 2000, the authorities have taken a series of corrective actions in the area of governance, fiscal policy, and structural reforms. Moreover, the preparation of a fully participatory PRSP is proceeding broadly according to schedule, and it is expected to be ready by the fall of 2001. On this basis, Chad's HIPC decision point document is now scheduled to be presented to the Boards of the Fund and the Bank in the second quarter of 2001; at that time, the Fund Board will also consider a review under the PRGF arrangement.
Congo, Democratic Republic of
The Democratic Republic of Congo has been continuously in arrears to the Fund since November 1990 and in nonaccrual status to the Bank since November 1993. Since assuming office in January 2001, President Joseph Kabila has moved to reactivate the Lusaka cease-fire accord, start the inter-Congolese dialogue, restore relations with the Bretton Woods institutions, and take steps to open up the economy. On April 14, he appointed a new government. A Fund staff-monitored program and a Bank transitional support strategy are scheduled for discussion by the respective Boards in July 2001. The staff-monitored program would provide the Congo with an opportunity to establish a strong track record that could lead, once arrears have been cleared, to a formal program under the PRGF and subsequent debt relief under the HIPC Initiative.
Congo, Republic of
The Republic of Congo received Fund support under the emergency post-conflict assistance policy in November 2000. Implementation of the post-conflict program in late 2000 and early 2001 met with difficulties, including non-oil revenue shortfalls and expenditure overruns. The Bank's Board is expected to consider a request for an Economic Emergency Recovery Credit in the summer of 2001. The timing of HIPC decision point will depend on improved performance during 2001.
The Fund- and Bank-supported program has been off-track since early 1999 due to significant fiscal and governance problems. Following satisfactory conclusion of the consultation process with the EU by mid-May, and once donors have resumed their relations with Côte d'Ivoire, a staff-monitored program (SMP) with the Fund of up to six months will be needed to ensure that a track record of policy implementation is in place before a PRGF-supported program can be negotiated, possibly in the last quarter of 2001. The timing of the decision point under the enhanced HIPC Initiative will be considered at that time.
In March 2001 the Boards of the Fund and World Bank considered an Interim-PRSP, a Joint Staff Assessment, and an updated preliminary HIPC document. The Fund Board also approved a three-year PRGF arrangement. It is expected that a decision point document can be presented for Board approval in the fall of 2001, provided Ethiopia (i) makes satisfactory progress in consulting civic groups and development partners in the course of preparation of a full-fledged PRSP, (ii) completes the first review under the PRGF arrangement, and (iii) improves the specificity of some completion point triggers.
In its 2001 budget, the government of Ghana has stated its intention to seek relief under the HIPC initiative. Discussions are ongoing on a 2001 program that could be supported under the current three-year PRGF arrangement. A preliminary HIPC document could be presented to the Bank and Fund Boards in summer 2001, at the time the 2001 program is considered by the Fund Board, for which Ghana is likely to seek traditional debt relief from the Paris Club.
In April 2001, the Fund Board approved a new three-year PRGF arrangement with Lao P.D.R., along with the accompanying I-PRSP and JSA. The World Bank Board has also endorsed the I-PRSP and JSA, and a financial sector adjustment credit is being prepared. The authorities are still in the process of studying the advantages and disadvantages of requesting HIPC relief, and work is underway to prepare a debt sustainability analysis.
There has been no Fund-supported program since 1981-82. The World Bank has approved no new lending since 1987 and does not have an active program in Myanmar. Poor debt statistics make an assessment of the debt burden difficult. Highly tentative estimates indicate that Myanmar's debt ratios exceed the thresholds under the HIPC Initiative.
The current program, supported by the Fund's post-conflict emergency assistance policy and the World Bank's Economic Rehabilitation and Recovery Credit has been generally on track despite the recent outbreak of violence in the country. It is anticipated that a new program, which could be supported by a three-year PRGF arrangement, could be presented to the Fund Board in the third quarter of 2001, accompanied by an I-PRSP. A preliminary HIPC Initiative document could be presented at the time the 2001 program is considered by the Executive Boards. Timing of the decision point under the HIPC Initiative could be considered at that time.
There has not been a Fund-supported program since mid-1998. The IMF
Executive Board concluded the 2001 Article IV consultation with Togo
in April 2001, and a staff-monitored program covering the period April-September
2001 is in place. Legislative elections are planned for October 2001,
and their satisfactory execution has been identified by a number of
key donors as a condition for the resumption of financial assistance.
The authorities plan to prepare an I-PRSP by the end of the year. Timing
of the HIPC decision point will depend on the authorities' performance
under the SMP, settlement of arrears with the World Bank, and participation
of other creditors.
Committed Debt Relief and Outlook; status as of April 2001
(In millions of US$)
1 Angola, Kenya, Vietnam, and Yemen.
2 Liberia, Somalia, and Sudan.