Heavily Indebted Poor Countries

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Heavily Indebted Poor Countries (HIPC) are a group of 37 least developed countries with the highest levels of poverty and debt overhang, which are eligible for special assistance from the International Monetary Fund (IMF) and the World Bank.

Contents 1 HIPC history and structure 2 Criticism 3 Recent progress 4 References 5 See also 6 External links

[edit] HIPC history and structure

The HIPC program was initiated by the International Monetary Fund and the World Bank in 1996, following extensive lobbying by NGOs and other bodies. It provides debt relief and low-interest loans to reduce external debt repayments to sustainable levels. Assistance is conditional on the national governments of these countries meeting a range of economic management and performance targets.

The HIPC program identified 42 countries, 32 of which are in Sub-Saharan Africa, as being potentially eligible to receive debt relief (2004). The 27 countries that have so far received a combined $54 billion in aid are the following:

Benin  Bolivia  Burkina Faso  Cameroon  Chad  Democratic Republic of the Congo  Ethiopia  Gambia  Ghana

Guinea  Guinea-Bissau  Honduras  Madagascar  Malawi  Mali  Mauritania  Mozambique  Nicaragua

Niger  Rwanda  São Tomé and Príncipe  Senegal  Sierra Leone  Tanzania  Uganda  Zambia

On July 7, 2007, the South American nation of Guyana was declared to be no longer a "Heavily Indebted Poor Country".^[1] It remains the only nation to be removed from the HIPC list.

[edit] Criticism

The program has been criticized for having excessively strict criteria for inclusion, for providing inadequate debt relief, for money being invested in projects that provide no long term good in the development of the country, and for requiring countries to adopt measures which are likely to increase poverty. For example, inadequate debt relief for such countries means that they will need to spend more on servicing debts, rather than on actively investing in programs which can reduce poverty.

[edit] Recent progress

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."^[2]

[edit] References

[edit] See also

• Central Emergency Response Fund
• Debt overhang
• Debt relief
• Millennium Development Goals

v • d • e Economic classification of countries Developed country · Developing country · Least developed country · High income country · Newly industrialized country · Heavily Indebted Poor Countries Worlds Theory First World · Second World · Third World · Fourth World Lists of countries GDP per capita List of countries by GDP (nominal), (per capita) · List of countries by GDP (PPP), (per capita), (per hour) Human Development Index List of countries by Human Development Index Human Poverty Index List of countries by percentage of population living in poverty Literacy rate List of countries by literacy rate

[edit] External links

• Oxfam
• Official HIPC website (World Bank)
• HIPC Debt Relief: Myths and Reality (Jan Joost Teunissen and Age Akkerman (eds.), Fondad, 2004, book, pdf)
• Dossier on Heavily Indebted Poor Countries by the Committee to Abolish the Third World Debt.
• HIPC Initiative University of Iowa Center for International Finance & Development.