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PostHIPC Debt Sustainability and Commonwealth HIPCs

image of PostHIPC Debt Sustainability and Commonwealth HIPCs
The debt problem facing poor countries has been at the heart of Commonwealth concerns since the 1980s. The Heavily Indebted Poor Countries (HIPC) Initiative has made important strides in providing comprehensive debt relief to the world’s poorest, most heavily indebted countries, cutting the total external debt of 26 out of the 42 eligible countries by twothirds.



The report presents discussions held at the 2003 Dar es Salaam HIPC Ministerial Forum and calls for a number of actions to deal with both immediate concerns and the issues surrounding longterm debt sustainability in HIPCs.

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Exogenous Shocks and an HIPC Insurance Facility

World Bank and IMF staff have estimated that the NPV of debt to exports in 2001 was higher than the decision point projections in 15 of the 23 countries for which data were available, with more than 15 percentage point deterioration having occurred in 11 countries. It also confirmed that the principal source of deterioration was lower exports, caused mainly by declining commodity prices. For these 15 countries, exports grew on average by only 3 per cent in 2001, compared with over 11 per cent projected at decision points and compared with 12 per cent for the eight HIPCs whose debt indicators did not deteriorate.

English

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