Trade and Debt Relief
Many of the world's poorest countries are trapped in a cycle of poverty because of the huge debts they owe to countries and financial institutions in the developed world. The HIPC Initiative was first launched in 1996 by the IMF and World Bank, with the aim of ensuring that no poor country faces a debt burden it cannot manage. The Initiative entails coordinated action by the international financial community, including multilateral organizations and governments, to reduce to sustainable levels the external debt burdens of the most heavily indebted poor countries.
How is HIPC debt relief delivered?
HIPC relief is delivered in two stages. When countries reach the first stage, Decision Point, they receive interim relief and cease to make payments on their debt. When HIPC governments have demonstrated progress in tackling poverty, they reach the second stage, Completion Point. At this stage they receive an irrevocable reduction in their stock of debt. Of the 29 countries that have so far qualified for HIPC relief, 19 have reached Completion Point and had their debts reduced.
Where governments are committed to eradicating poverty, debt relief can free up resources for investment in key programmes, and play an important part in. The 29 countries that have qualified for debt relief under the enhanced HIPC framework are:
19 countries have reached Completion Point
Benin
Bolivia
Burkina Faso
Cameroon *
Ethiopia
Ghana *
Guyana *
Honduras
Madagascar
Mali
Mauritania
Mozambique *
Nicaragua
Niger
Rwanda
Senegal
Tanzania *
Uganda *
Zambia *
10 have reached Decision Point
Burundi
Chad
Republic of Congo
Democratic Republic of Congo
The Gambia *
Guinea
Guinea Bissau
Malawi *
Sao Tome and Principe
Sierra Leone *
* Denotes a Commonwealth country
