debt initiative for heavily indebted poor countries

IaDB $1.3 billion (2%)
Other Multilateral Creditors $4.0 billion (7%)
Paris Club $19.0 billion (35%)
AfDB/AfDF $3.9 billion (7%)
IMF $5.2 billion (10%)
World Bank Group $10.8 billion (20%)
Other Official Bilateral Creditors
$7.5 billion (14%)
Commercial Creditors
$2.8 billion (5%)
1.
Debt_PocketBroch09_09_04
Potential costs of the HIPC Initiative by creditor group
(Total cost: $54.5 billion, end-2003 NPV terms)1
37 HIPCs. Excludes those likely to be sustainable (Angola, Kenya, Vietnam and Yemen) and Lao P.D.R.
9/9/04
The HIPC initiative has contributed to increased poverty-reducing
expenditure for decision point countries (ratio in percent)
Total
47.6%
51.2%
40.9%
48.5%
5.5%
7.3%
10.8%
10.7%
6.4%
7.9%
COMOROS
CONGO, REP. OF
2003
BURUNDI
CENTRAL AFRICAN REPUBLIC
1999
Latin America
CÔTE D’IVOIRE
LAO PDR
LIBERIA
MYANMAR
SOMALIA
SUDAN
TOGO
Pre-Decision Point 11 countries
To reach decision point, countries should have a track record of macroeconomic stability, have prepared
an Interim Poverty Reduction Strategy through a participatory process, and cleared any outstanding
arrears. The amount of debt relief necessary to bring countries’ debt indicators to HIPC thresholds is calculated, and countries begin receiving debt relief on a provisional basis.
CAMEROON
CHAD
CONGO, DEM. REP.
THE GAMBIA
GUINEA
GUINEA-BISSAU
HONDURAS
MADAGASCAR
MALAWI
RWANDA
SÃO TOMÉ AND PRÍNCIPÉ
SIERRA LEONE
ZAMBIA
Decision Point 13 countries
To reach completion point, countries must maintain macroeconomic stability under a PRGF-supported
program, carry out key structural and social reforms, and implement a Poverty Reduction Strategy satisfactorily for one year. Debt relief is then provided irrevocably by the country’s creditors.
BENIN
BOLIVIA
BURKINA FASO
ETHIOPIA
GHANA
GUYANA
MALI
MAURITANIA
MOZAMBIQUE
NICARAGUA
NÍGER
SENEGAL
TANZANIA
UGANDA
Completion Point 14 countries
Status of HIPC countries
GOAL
ELIGIBILITY
To ensure deep, broad and fast debt relief
with a strong link to poverty reduction.
IDA-Only & PRGF eligible
Heavily indebted (i.e. NPV of debt
above 150% of exports or above
250% of government revenues)
Good track record of reform
HIPC
DEBT INITIATIVE FOR
HEAVILY INDEBTED
POOR COUNTRIES
LAUNCHED AT BANK-FUND
ANNUAL MEETINGS IN 1996
AND ENHANCED IN 1999
ANNUAL MEETINGS 2004
Page 1
Poverty-Reducing Expenditure/GDP
2003
Africa
38.6%
47.8%
11:58 AM
Poverty-Reducing Expenditure/Government Revenue
1999
IaDB $1.3 billion (2%)
Other Multilateral Creditors $4.0 billion (7%)
Paris Club $19.0 billion (35%)
AfDB/AfDF $3.9 billion (7%)
IMF $5.2 billion (10%)
World Bank Group $10.8 billion (20%)
Other Official Bilateral Creditors
$7.5 billion (14%)
Commercial Creditors
$2.8 billion (5%)
1.
Debt_PocketBroch09_09_04
Potential costs of the HIPC Initiative by creditor group
(Total cost: $54.5 billion, end-2003 NPV terms)1
37 HIPCs. Excludes those likely to be sustainable (Angola, Kenya, Vietnam and Yemen) and Lao P.D.R.
9/9/04
The HIPC initiative has contributed to increased poverty-reducing
expenditure for decision point countries (ratio in percent)
Total
47.6%
51.2%
40.9%
48.5%
5.5%
7.3%
10.8%
10.7%
6.4%
7.9%
COMOROS
CONGO, REP. OF
2003
BURUNDI
CENTRAL AFRICAN REPUBLIC
1999
Latin America
CÔTE D’IVOIRE
LAO PDR
LIBERIA
MYANMAR
SOMALIA
SUDAN
TOGO
Pre-Decision Point 11 countries
To reach decision point, countries should have a track record of macroeconomic stability, have prepared
an Interim Poverty Reduction Strategy through a participatory process, and cleared any outstanding
arrears. The amount of debt relief necessary to bring countries’ debt indicators to HIPC thresholds is calculated, and countries begin receiving debt relief on a provisional basis.
CAMEROON
CHAD
CONGO, DEM. REP.
THE GAMBIA
GUINEA
GUINEA-BISSAU
HONDURAS
MADAGASCAR
MALAWI
RWANDA
SÃO TOMÉ AND PRÍNCIPÉ
SIERRA LEONE
ZAMBIA
Decision Point 13 countries
To reach completion point, countries must maintain macroeconomic stability under a PRGF-supported
program, carry out key structural and social reforms, and implement a Poverty Reduction Strategy satisfactorily for one year. Debt relief is then provided irrevocably by the country’s creditors.
BENIN
BOLIVIA
BURKINA FASO
ETHIOPIA
GHANA
GUYANA
MALI
MAURITANIA
MOZAMBIQUE
NICARAGUA
NÍGER
SENEGAL
TANZANIA
UGANDA
Completion Point 14 countries
Status of HIPC countries
GOAL
ELIGIBILITY
To ensure deep, broad and fast debt relief
with a strong link to poverty reduction.
IDA-Only & PRGF eligible
Heavily indebted (i.e. NPV of debt
above 150% of exports or above
250% of government revenues)
Good track record of reform
HIPC
DEBT INITIATIVE FOR
HEAVILY INDEBTED
POOR COUNTRIES
LAUNCHED AT BANK-FUND
ANNUAL MEETINGS IN 1996
AND ENHANCED IN 1999
ANNUAL MEETINGS 2004
Page 1
Poverty-Reducing Expenditure/GDP
2003
Africa
38.6%
47.8%
11:58 AM
Poverty-Reducing Expenditure/Government Revenue
1999
Debt relief approved for 27 countries
amounting to $54 billion in nominal debt
service relief.
Fourteen countries have reached completion
point and have been granted $29 billion
dollars in unconditional debt service relief.
Establishing a good track record of reform in
the 11 pre-decision point countries yet to
receive debt relief under the HIPC Initiative.
Many of these countries are affected by conflict and/or have protracted arrears problems.
NPV of external debt of 27 approved HIPCs
cut by approximately two-thirds (with
other forms of debt relief).
Ensuring full participation by all creditors
to support the countries' efforts towards
debt sustainability;
Beyond debt relief, maintaining long-term
debt sustainability will require efforts by
the HIPCs and the international community
to ensure prudent borrowing practices,
suitable concessional financing, sustained
and broad based growth, a more diversified export base and increased access to
markets in developed countries.
Social expenditures are increasing substantially, in part financed by resources
freed up by HIPC relief. Poverty-reducing
government spending is projected to rise
from less than twice that of debt-service
payments to almost four times.
11:58 AM
9/9/04
Challenges
Debt_PocketBroch09_09_04
Achievements of the HIPC Initiative
Page 4
Debt stocks of HIPCs reduced by two-thirds
27 decision point countries, US$ billion 2003 NPV terms
80
Before Traditional Relief
After Traditional Relief
68
After HIPC Relief
32
28
After Additional Bilateral Debt Forgiveness
Projected debt service obligations fall substantially
27 decision point countries
Before HIPC Relief
4.8
4.9
5.0
2.6
2.6
2.8
2.7
2001
2002
2003
4.4
After HIPC Relief
5.0
4.9
4
3
2004
2.3
2.6
2005
2006
2
Billions of U.S.$
6
5
1
Significant decline in debt service ratios after HIPC relief
27 decision point countries
Debt service/exports
Debt service/gov. revenue
Debt service/GDP
14.5%
1999
10.0%
2003
21.8%
1999
15.2%
2003
1999
2003
3.4%
2.5%
Debt indicators of HIPCs fall to levels comparable to other
non-HIPC developing countries
27 DECISION POINT HIPCS
Before HIPC relief 1999
NPV of debt-to-exports
After HIPC relief 2004 1
Non-HIPC developing
countries 2002
274%
141%
143%
NPV of debt-to-GDP
61%
33%
39%
Debt service-to-exports
15%
9%
15%
1.
Projections
Debt relief approved for 27 countries
amounting to $54 billion in nominal debt
service relief.
Fourteen countries have reached completion
point and have been granted $29 billion
dollars in unconditional debt service relief.
Establishing a good track record of reform in
the 11 pre-decision point countries yet to
receive debt relief under the HIPC Initiative.
Many of these countries are affected by conflict and/or have protracted arrears problems.
NPV of external debt of 27 approved HIPCs
cut by approximately two-thirds (with
other forms of debt relief).
Ensuring full participation by all creditors
to support the countries' efforts towards
debt sustainability;
Beyond debt relief, maintaining long-term
debt sustainability will require efforts by
the HIPCs and the international community
to ensure prudent borrowing practices,
suitable concessional financing, sustained
and broad based growth, a more diversified export base and increased access to
markets in developed countries.
Social expenditures are increasing substantially, in part financed by resources
freed up by HIPC relief. Poverty-reducing
government spending is projected to rise
from less than twice that of debt-service
payments to almost four times.
11:58 AM
9/9/04
Challenges
Debt_PocketBroch09_09_04
Achievements of the HIPC Initiative
Page 4
Debt stocks of HIPCs reduced by two-thirds
27 decision point countries, US$ billion 2003 NPV terms
80
Before Traditional Relief
After Traditional Relief
68
After HIPC Relief
32
28
After Additional Bilateral Debt Forgiveness
Projected debt service obligations fall substantially
27 decision point countries
Before HIPC Relief
4.8
4.9
5.0
2.6
2.6
2.8
2.7
2001
2002
2003
4.4
After HIPC Relief
5.0
4.9
4
3
2004
2.3
2.6
2005
2006
2
Billions of U.S.$
6
5
1
Significant decline in debt service ratios after HIPC relief
27 decision point countries
Debt service/exports
Debt service/gov. revenue
Debt service/GDP
14.5%
1999
10.0%
2003
21.8%
1999
15.2%
2003
1999
2003
3.4%
2.5%
Debt indicators of HIPCs fall to levels comparable to other
non-HIPC developing countries
27 DECISION POINT HIPCS
Before HIPC relief 1999
NPV of debt-to-exports
After HIPC relief 2004 1
Non-HIPC developing
countries 2002
274%
141%
143%
NPV of debt-to-GDP
61%
33%
39%
Debt service-to-exports
15%
9%
15%
1.
Projections
Debt relief approved for 27 countries
amounting to $54 billion in nominal debt
service relief.
Fourteen countries have reached completion
point and have been granted $29 billion
dollars in unconditional debt service relief.
Establishing a good track record of reform in
the 11 pre-decision point countries yet to
receive debt relief under the HIPC Initiative.
Many of these countries are affected by conflict and/or have protracted arrears problems.
NPV of external debt of 27 approved HIPCs
cut by approximately two-thirds (with
other forms of debt relief).
Ensuring full participation by all creditors
to support the countries' efforts towards
debt sustainability;
Beyond debt relief, maintaining long-term
debt sustainability will require efforts by
the HIPCs and the international community
to ensure prudent borrowing practices,
suitable concessional financing, sustained
and broad based growth, a more diversified export base and increased access to
markets in developed countries.
Social expenditures are increasing substantially, in part financed by resources
freed up by HIPC relief. Poverty-reducing
government spending is projected to rise
from less than twice that of debt-service
payments to almost four times.
11:58 AM
9/9/04
Challenges
Debt_PocketBroch09_09_04
Achievements of the HIPC Initiative
Page 4
Debt stocks of HIPCs reduced by two-thirds
27 decision point countries, US$ billion 2003 NPV terms
80
Before Traditional Relief
After Traditional Relief
68
After HIPC Relief
32
28
After Additional Bilateral Debt Forgiveness
Projected debt service obligations fall substantially
27 decision point countries
Before HIPC Relief
4.8
4.9
5.0
2.6
2.6
2.8
2.7
2001
2002
2003
4.4
After HIPC Relief
5.0
4.9
4
3
2004
2.3
2.6
2005
2006
2
Billions of U.S.$
6
5
1
Significant decline in debt service ratios after HIPC relief
27 decision point countries
Debt service/exports
Debt service/gov. revenue
Debt service/GDP
14.5%
1999
10.0%
2003
21.8%
1999
15.2%
2003
1999
2003
3.4%
2.5%
Debt indicators of HIPCs fall to levels comparable to other
non-HIPC developing countries
27 DECISION POINT HIPCS
Before HIPC relief 1999
NPV of debt-to-exports
After HIPC relief 2004 1
Non-HIPC developing
countries 2002
274%
141%
143%
NPV of debt-to-GDP
61%
33%
39%
Debt service-to-exports
15%
9%
15%
1.
Projections
Other Multilateral Creditors $4.0 billion (7%)
Paris Club $19.0 billion (35%)
Other Official Bilateral Creditors
$7.5 billion (14%)
Debt_PocketBroch09_09_04
Potential costs of the HIPC Initiative by creditor group
(Total cost: $54.5 billion, end-2003 NPV terms)1
IaDB $1.3 billion (2%)
AfDB/AfDF $3.9 billion (7%)
IMF $5.2 billion (10%)
World Bank Group $10.8 billion (20%)
Commercial Creditors
$2.8 billion (5%)
1.
37 HIPCs. Excludes those likely to be sustainable (Angola, Kenya, Vietnam and Yemen) and Lao P.D.R.
Total
40.9%
48.5%
11:58 AM
Page 1
Latin America
Africa
1999
6.4%
7.9%
9/9/04
The HIPC initiative has contributed to increased poverty-reducing
expenditure for decision point countries (ratio in percent)
47.6%
51.2%
38.6%
47.8%
2003
1999
CÔTE D’IVOIRE
LAO PDR
Poverty-Reducing Expenditure/Government Revenue
10.8%
10.7%
5.5%
7.3%
2003
COMOROS
CONGO, REP. OF
Poverty-Reducing Expenditure/GDP
BURUNDI
CENTRAL AFRICAN REPUBLIC
LIBERIA
MYANMAR
SOMALIA
SUDAN
TOGO
Pre-Decision Point 11 countries
To reach decision point, countries should have a track record of macroeconomic stability, have prepared
an Interim Poverty Reduction Strategy through a participatory process, and cleared any outstanding
arrears. The amount of debt relief necessary to bring countries’ debt indicators to HIPC thresholds is calculated, and countries begin receiving debt relief on a provisional basis.
CAMEROON
CHAD
CONGO, DEM. REP.
THE GAMBIA
GUINEA
GUINEA-BISSAU
HONDURAS
MADAGASCAR
MALAWI
RWANDA
SÃO TOMÉ AND PRÍNCIPÉ
SIERRA LEONE
ZAMBIA
Decision Point 13 countries
To reach completion point, countries must maintain macroeconomic stability under a PRGF-supported
program, carry out key structural and social reforms, and implement a Poverty Reduction Strategy satisfactorily for one year. Debt relief is then provided irrevocably by the country’s creditors.
BENIN
BOLIVIA
BURKINA FASO
ETHIOPIA
GHANA
GUYANA
MALI
MAURITANIA
MOZAMBIQUE
NICARAGUA
NÍGER
SENEGAL
TANZANIA
UGANDA
Completion Point 14 countries
Status of HIPC countries
GOAL
ELIGIBILITY
To ensure deep, broad and fast debt relief
with a strong link to poverty reduction.
HIPC
Good track record of reform
Heavily indebted (i.e. NPV of debt
above 150% of exports or above
250% of government revenues)
IDA-Only & PRGF eligible
DEBT INITIATIVE FOR
HEAVILY INDEBTED
POOR COUNTRIES
LAUNCHED AT BANK-FUND
ANNUAL MEETINGS IN 1996
AND ENHANCED IN 1999
ANNUAL MEETINGS 2004