Heavily Indebted Poor Countries Initiative – HIPC

The Heavily Indebted Poor Countries initiative (HIPC) was set up in 1996 to reduce the debt of the poorest countries. Poor countries are eligible for the scheme if they face unsustainable debt that cannot be reduced by traditional methods. They also have to agree to follow certain policies of good governance as defined by the World Bank and the IMF. Once these are established the country is at "decision point" and the amount of debt relief is established. Critics of the scheme say the parameters are too strict and more countries should be eligible for HIPC debt relief.

History of Heavily Indebted Poor Countries (HIPC) Initiative

This map from the BBC shows how much "decision point" HIPC countries spend on repaying debts and interest in 2003. Fourteen African HIPC countries will have their debts totally written off under a new plan drawn up by the G8 finance ministers.

World Bank: HIPC at a glance

The Highly Indebted Poor Countries debt relief program (HIPC)

World Bank Guide: Steps of the HIPC Initiative

IMF: Fact Sheet: Debt Relief Under the Heavily Indebted Poor Countries (HIPC) Initiative

The Heavily Indebted Poor Countries Debt Strategy and Analysis Capacity Building Programme (HIPC CBP) builds the capacity of HIPC governments to conduct debt strategy analysis and negotiate debt relief and new financing.

The World Bank and the International Monetary Fund (IMF) are working on a new framework to facilitate debt sustainability in developing countries

To Lend or to Grant? A critical view of the IMF and World Bank’s proposed approach to debt sustainability analysis for low-income countries a paper by CAFOD / Christian Aid / Trocaire / Oxfam. The IMF and World Bank have produced a paper outlining a new approach to donor financing for Low-Income Countries (LICs).

Still missing the point: Unpacking the new World Bank/IMF debt sustainability framework This briefing by EURODAD sets out what the new 2005 Bank/Fund framework means for developing countries’ ability to meet the MDGs and achieve social justice for their peoples.

ECONOMIC DEVELOPMENT IN AFRICA, Debt Sustainability, Oasis or Mirage? UNCTAD