New Ways of Achieving Debt Sustainability beyond the Enhanced
HIPC Initiative.
There were lots of pledges for fiscal prudency made by African governments after the
HIPC Initiative came into play, but for some countries, this commitment hasn't really played out," says Alan Cameron, Africa economist at Exotix in London.
Nevertheless, Saudi Arabia has reached the completion point, meaning it has successfully implemented the key structural reforms agreed upon at the issuance of IMF aid, which requires meeting criteria put forth by the
HIPC initiative to reduce poverty.
To meet the challenge of the poor performance of public administration, the Government adopted in 2008 the Reform of Public Administration has cleared the modality to rebuild the public administration following a gradual two-phase approach, specifying the urgency of capacity building to implement the measures linked to the attainment of the completion point of the
HIPC initiative and development projects in priority sectors of the Poverty Reduction Strategy Paper.
In addition, the Fund contributed to enhanced
HIPC initiative.
Gemayel who led an IMF's delegation to Khartoum went on to say that Sudan will not be able to benefit from the
HIPC initiative despite fulfilling its conditions unless it succeeds in convincing all 55 members of the Paris Club creditor nations whom he said have the power to slash 67% of conventional debt owed by Sudan.
It also said that Guinea becomes the 34th country to reach the completion point under the
HIPC Initiative.
This led to alterations of HIPC I and a number of supposed post-SAPs came into being, amongst others the Enhanced
HIPC initiative (HIPC II) and Poverty Reduction Strategy Papers (PRSPs).
In 1999, the
HIPC Initiative was enhanced in order to provide "faster, broader, and deeper debt relief' and to allow more countries to qualify for this debt relief program.
11) Over $110 billion of debt relief has been delivered or committed under the
HIPC Initiative, together with the Multilateral Debt Relief Initiative, which supplements the
HIPC Initiative by providing one hundred percent relief of eligible debt owed to the IMF, the World Bank, the African Development Bank, and the Inter-American Development Bank.
Given the lackluster performance of the Honduran economy during the implementation of SAPs in the 1990s and the failure to significantly reduce the levels and depth of poverty, Honduras' participation in the
HIPC initiative was expected to free up resources for social investments previously committed to debt servicing and provide space to develop a nationally owned development strategy in a participatory process that would lead to better economic growth performance and concomitant poverty reduction (IMF and International Development Association [IDA] 2000).
In the negotiations in Paris, the three creditors committed to reduce Afghanistan's remaining bilateral debt by a further $441 million as part of the
HIPC initiative, bringing the total debt owed to these countries to $585 million.
