multilateral organizations and governments, have worked together to lower to sustainable levels the external debt burdens of the most heavily Rep. Congo, Rep. Cote d'Ivoire Eritrea Ethiopia Gambia, The Ghana Guinea Guinea-Bissau Guyana Haiti Honduras Liberia Madagascar Malawi Mali Mauritania Mozambique Nicaragua Niger Rwanda to have a tangible impact on poverty, the additional money needs to be This practice note details some arguments on how to expand the HIPC initiative and elaborates on UNDP's role in the initiative and position on debt . IMF Members' Quotas and Voting Power, and Board of Governors, IMF Regional Office for Asia and the Pacific, IMF Capacity Development Office in Thailand (CDOT), IMF Regional Office in Central America, Panama, and the Dominican Republic, Financial Sector Assessment Program (FSAP), Currency Composition of Official Foreign Exchange Reserves, Africa's Improved Debt Outlook Sparks Investor Interest, February 25, 2008, Debt Limits in Fund Programs with Low-Income Countries, Debt Relief Brings Benefits to Africa February 25, 2008, Debt Relief Yields Results in Niger,February 25, 2008, Documents in the Multilateral debt Relief Initiative, Factsheet: The Debt Sustainability Framework for Low-Income Countries, For weekly updates on the Status of Commitments of HIPC Assistance (see Section IV of IMF Financial Activities), Heavily Indebted Poor Countries Initiative and Multilateral Debt Relief Initiative Statistical Update, 2019, Heavily Indebted Poor Countries Initiative and Multilateral Debt Relief InitiativeStatistical Update, 2017, Heavily Indebted Poor Countries Initiative and Multilateral Debt Relief InitiativeStatistical Update, 2016, HIPC Initiative: Publications of Country Cases Considered Under the Initiative, IMF and World Bank Announce US$176 million Debt Relief for the Union of the Comoros, IMF and World Bank Announce US$1.1 billion Debt Relief for Chad, IMF Backs New Package To Support World's Poorest During Crisis, Factsheet: IMF Support for Low-Income Countries, Multilateral Debt Relief Initiative: Questions and Answers, Policy Papers on Debt-Sustainability in Low-Income Countries, Reform of the Policy on Public Debt Limits in Fund-Supported Programs; IMF Policy Paper; November 2014, Study Finds IMF Helps Countries in Use of Aid, January 6, 2009, The IMF Response to the Global Crisis: Meeting the Needs of Low-Income Countries, Multilateral Debt Relief Initiative (MDRI). As Sudan has made tangible progress towards the decision point, there is an urgent need to mobilize resources. Of the current 36 countries, most are in Africa. The HIPC process is aimed not at canceling debts, but at ensuring that they can be repaid. 3.The countries must have established track records of development reforms and sound policies. 79 relations. Other articles where Heavily Indebted Poor Countries Initiative is discussed: Ghana: Economy of Ghana: Bank and International Monetary Fund's Heavily Indebted Poor Country program in 2002 and the total debt forgiveness plan agreed upon by the Group of Eight country leaders in Gleneagles, Scotland, in 2005, but by 2015 Ghana was suffering from a high debt burden again. List of Countries That Have Qualified for, are Eligible or Potentially Eligible, and May Wish to Receive HIPC Initiative Assistance (as of February 2020), Eritrea Sudan. Reducing debt service. Overall these countries account for 2% of Global GDP and 3% of global GDP growth in the past 10 years (2011-2021). Of the 39 countries eligible or potentially eligible for HIPC Initiative [5] This occurred after Sudan's civilian-led transitional government and its cabinet led by Abdalla Hamdok implemented tough economic reforms to reach the decision point. In order to receive full and irrevocable reduction in debt available under Environmental, Social & Governance Indexes, See data quality for individual countries. spent on programs that benefit the poor. is among the top 5 countries with the highest potential for agriculture in the world. These revisions modified HIPC's threshold requirements. With 189 member countries, staff from more than 170 countries, and offices in over 130 locations, the World Bank Group is a unique global partnership: five institutions working for sustainable solutions that reduce poverty and build shared prosperity in developing countries. The IMF and World Bank will also continue to improve their ability to monitor the delivery of HIPC Initiative debt relief. It also provides updates on debt service and poverty-reducing expenditure by beneficiary countries, as well as on the cost of debt relief, creditor participation rates, and litigation against HIPCs. Sign up to receive free e-mail notices when new series and/or country items are posted on the IMF website. Public and publicly-guaranteed external debt, Please address any questions about this title to publications@imf.org. In December 2019, the IMF Executive Board approved a financing plan that will help mobilize the resources needed for the IMF to cover its share of debt relief to Somalia. Wednesday, November 16, 2022 . The World Bank, the International Monetary Fund (IMF) and other multilateral, bilateral and commercial creditors began the Heavily Indebted Poor Countries (HIPC) Initiative in 1996. process. Debt burden [1][3], The 37 countries that have so far received full or partial debt relief are:[2][3], 37 countries have completed the program and had their external debt cancelled in full, after Somalia passed the Completion Point in 2020.[2][4]. All rights reserved. The aim of this classification in 1999 was debt relief proposed by the G8 countries, initiated by Germany. 144, p. 29-52 . ), Fondad, 2004, book, pdf), BrazilRussiaIndiaChinaSouth Africa (BRICS), IndiaBrazilSouth Africa Dialogue Forum (IBSA), New World Information and Communication Order, United Nations Conference on Trade and Development, United Nations Industrial Development Organization, Community of Latin American and Caribbean States, South Atlantic Peace and Cooperation Zone, South Asian Association for Regional Cooperation, Number of broadband Internet subscriptions, https://en.wikipedia.org/w/index.php?title=Heavily_indebted_poor_countries&oldid=1121837783, Short description is different from Wikidata, Articles with unsourced statements from October 2017, Creative Commons Attribution-ShareAlike License 3.0, This page was last edited on 14 November 2022, at 11:41. [6], IMF and World Bank classification for special eligibility, "Developing Countries: Status Of The Heavily Indebted Poor Countries Debt Relief Initiative: NSIAD-98-229. Free Download. At the time, HIPC considered debt unsustainable when the ratio of debt-to-exports exceeded 200-250% or when the ratio of debt-to-government revenues exceeded 280%. All rights reserved. Several attempts were made to save the country from the depths of debt insolvency, ranging from debt restructurings to debt cancellation in the framework of the Heavily Indebted Poor Countries (HIPC) initiative. Find out how good a country could be if it upgraded it's GDP data. More recently, with the increase in public debt in LICs, debt service burdens have started to rise, although they still remain 1 percentage point below the pre-HIPC levels in 2017. HIPCs or non-HIPCs. Some commercial creditors have initiated litigations against HIPCs, raising significant legal challenges to burden sharing among all creditors, including the multilateral institutions. ; and. Eritrea is also eligible tor HIPC debt relief but does not have financial obligations to the IMF. The countries where the majority of the world's poor people live are not included: China, India, Indonesia, Brazil, Argentina, Mexico, the Philippines, Pakistan, Nigeria, and the like. In other words, the whole arsenal of ultra-liberal measures which have contributed to the impoverishment of African populations, to the degradation of social services, to fall in life expectancy of over seven years, to the return of diseases we had thought eradicated, to increased unemployment for young graduates, to setting back industrialisation, and to the creation of chronic food shortages. The heavily indebted poor countries (HIPC) are a group of 37 developing countries with high levels of poverty and debt overhang which are eligible for special assistance from the International Monetary Fund (IMF) and the World Bank. Summary: This paper presents an assessment of Somalia's eligibility for assistance under the enhanced Heavily Indebted Poor Countries (HIPC) Initiative. Sudan has made tangible progress toward establishing a strong track record of policy required to achieve this milestone and eventual debt relief. Since then, the international financial community, including You have clicked on a link to a page that is not part of the beta version of the new worldbank.org. On average, such spending is about five times the Heavily Indebted Poor Country (HIPC) is a debt relief initiative which was launched in 1996 by the IMF and World Bank, to ensure that no poor country faces a debt burden it cannot manage. Although the largest creditors (the World Bank, the African Development Bank, the IMF, the Inter-American Development Bank, and all Paris Club creditors) have provided their full share of debt relief under the HIPC Initiative, and even beyond, others are lagging behind. The Fund and Second step: completion point. Three additional countries are eligible for HIPC Initiative assistance. The HIPC Initiative was initiated by the International Monetary Fund and the World Bank in 1996, following extensive lobbying by NGOs and other bodies. $38.78 trillion 44% of world Combined Gross Domestic Product (GDP) in US dollars. [6], In 2001, the IMF introduced another tool to increase HIPC's effectiveness. The World Bank, the International Monetary Fund (IMF) and other multilateral, bilateral and commercial creditors began the Heavily Indebted Poor Countries (HIPC) Initiative in 1996. The 36 countries that have so far received full or partial debt relief are:[1] Afghanistan Benin Bolivia Burkina Faso Burundi Cameroon Central African Republic Chad* meets its commitments, full debt relief is provided. Under the revised HIPC, a country reaches the decision point once it has demonstrated progress in following its PRSP. Countries must meet certain criteria, commit to poverty reduction through This document must indicate the use that will be made of the resources made available by this initiative, and contain a certain number of commitments relating to the implementation of classical structural adjustment measures: privatization of public companies, reduction of the salaried workforce, reduction of grants, elimination of government subsidies and deregulation of the labour market. Will you take two minutes to complete a brief survey that will help us to improve our website? United Nations projections are also included through the year 2100. 2022 International Monetary Fund. Western Hemisphere. Third, the IMF and the World Bank did not cancel any debt until the completion point, leaving countries under the burden of their debt payments while they struggled to institute structural reforms. This first stage In 2005, to help accelerate progress toward the United Nations Sustainable Development Goals(SDGs), the HIPC Initiative was supplemented by the 1.Countries must be eligible to borrow from the World Bank's International Development Agency. [7], HIPC addressed its shortcomings by expanding its definition of unsustainable debts, making greater relief available to more countries, and by making relief available sooner. The HIPC and related Multilateral Debt Relief Initiative (MDRI) programs have relieved 37 participating countries of more than $100 billion in debt. amount of debt-service payments. [6], Further progress towards debt relief was announced on December 21, 2005, when the IMF granted preliminary approval to an initial debt relief measure of US $3.3 billion for 19 of the world's poorest countries, with the World Bank expected to write off the larger debts owed to it by 17 HIPCs in mid-2006. It provides debt relief and low-interest loans to cancel or reduce external debt repayments to sustainable levels, meaning they can repay debts in a timely fashion in the future. ABSTRACT The objective of this study is to investigate the impact of Heavily Indebted Poor Countries Initiative (HIPC) on the attainment of the health . World Economics revised GDP data removes serious errors in GDP measurement. Nine additional countries have passed the decision point and are working toward completion. which provides loans to low-income countries at subsidized rates; 2) Face an unsustainable debt burden that cannot be addressed through Countries eligible for HIPC relief but not yet meeting the necessary conditions. November 3, 2015. It reduces the debt of countries meeting strict criteria. Once a country has met these criteria, it can reach its completion point, list of the 42 heavily indebted poor countries: angola, benin, bolivia, burkina faso, burundi, cameroon, central african republic, chad, comoro islands, congo, ivory coast, democratic republic of congo, ethiopia, gambia, ghana, guinea, guinea-bissau, guyana, honduras, kenya, laos, liberia, madagascar, malawi, mali, mauritania, mozambique, To date, 37 countries 31 of them in Africa have debt-relief for which they were eligible through the HIPC Initiative and the MDRI. Addressing these challenges will require continued efforts from these countries to strengthen policies and institutions, and support from the international community. Three additional countries are eligible for HIPC Initiative assistance. World Economics has combined 35 countries to represent the Heavily Indebted Countries group. peace and stability, and improving governance and the delivery of basic services. Once a "[8], As of December 2006, twenty-one countries have reached the HIPC completion point. The World Bank Group works in every major area of development. The heavily indebted developing countries (also named "poor" countries) are a subgroup of the developing countries defined by the International Monetary Fund (IMF). To reverse the recent increase in LIC public debt burdens and reduce their debt vulnerabilities, countries need to pursue Strengthening management of debt and public finances in all countries. 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