Archive for Saturday, December 23, 2000

22 countries meet debt relief criteria

December 23, 2000


— The World Bank and the International Monetary Fund said Friday that they exceeded the goal set by the major industrialized nations to get 20 of the world's poorest countries into a special debt relief program by year's end.

In a joint statement, World Bank President James Wolfensohn and IMF Managing Director Horst Koehler said these efforts "will lift some $34 billion in debt service obligations of 22 countries, 18 of them in Africa" over the coming years. Four countries are in Latin America.

Wolfensohn and Koehler said once the 22 nations provide the IMF and the bank with poverty reduction strategies and develop economic reform programs, they will become eligible to receive the full benefits of debt relief.

This should amount to a reduction of about half of their foreign debt burdens, rising to two-thirds once government and commercial lenders fulfill their own debt pledges.

Started by the two institutions in 1996, the Heavily Indebted Poor Country initiative had been criticized by the major industrialized nations as too slow, putting up too many economic hurdles before a country could qualify.

The United States and the six other G-7 nations called last year for the program to be speeded up and set a goal of 20 countries by the end of 2000.

Both lending institutions and the industrialized nations came under pressure to accelerate the program from a diverse group called Jubilee 2000, which included religious leaders, rock stars and international relief organizations dedicated to securing debt relief to coincide with the new millennium

The boards of the two lending organizations were putting the final touches Friday on programs for the African nations of Rwanda and Guinea.

They also announced that the Indian Ocean island nation of Madagascar was the latest country to qualify, receiving $800 million in debt relief and becoming the 20th nation to join the HIPC program. In the last approvals for the year Rwanda received $545 million and Guinea $452 million.

Malawi also qualified for debt relief and will see its burden cut by $643 million.

The final list will include: Benin, Burkina Faso, Cameroon, Gambia, Guinea, Guinea-Bissau, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger, Rwanda, Sao Tome and Principe, Senegal, Tanzania, Uganda and Zambia in Africa; Bolivia, Guyana, Honduras and Nicaragua in Latin America.

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