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).
Under the HIPC Initiative
, originally launched by the IMF and World Bank in 1996, expectations of creditor participation extended to multilateral, official bilateral, and commercial creditors.
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.
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.
This book, a collection of advanced papers of a World Bank Conference on debt and development held in October 2008, reviews what has transpired during the first twelve years of the HIPC initiative
. Sixteen papers divided into four sections provide analysis from a variety of perspectives, supported by ample empirical data, dozens of tables, and rich analysis.
Biti's debt strategy options include the use of internal revenue inflows which are woefully inadequate, resource-based debt restructuring, Paris Club debt rescheduling and the HIPC initiative
which he thinks is the most feasible.
The HIPC initiative
had a positive effect on growth for those countries that have reached the completion point.
In 2005, the Multilateral Debt Relief Initiative (MDRI) expanded upon the HIPC Initiative
by eliminating additional debt owed to four international financial institutions (IFI): the International Monetary Fund (IMF), World Bank's International Development Association (IDA), African Development Fund (ADF), and Inter-American Development Bank (IaDB).
For the poorest and most heavily indebted countries, the United States will continue support for the Paris Club of official creditors and provide additional relief complementary to the enhanced HIPC Initiative
. The Administration requests a total of $121 million in funding for the cost of debt restructuring programs including bilateral HIPC and poorest country debt reduction and the HIPC Trust Fund.
In 1996, the IMF and World Bank began the HIPC Initiative
to deal with this situation; the Initiative was "enhanced" in 1999 to take account of some of the many criticisms leveled against it (see below).
Boote and Kamau Thugge, "Debt Relief for Low-Income Countries: The HIPC Initiative
," International Monetary Fund, Washington, D.C., 1999