Developing Countries: Challenges Confronting Debt Relief and IMF Lending to Poor Countries: GAO-01-745T

May 2001
GAO Reports;5/15/2001, p1
Government Document
The Heavily Indebted Poor Countries (HIPC) Initiative and the International Monetary Fund's concessional (below-market terms) lending facility--the Poverty Reduction and Growth Facility--are two multilateral programs intended to help spur economic growth and reduce poverty in low-income countries, most notably countries in sub-Saharan Africa. The HIPC Initiative represents a step forward in the international community's efforts to relieve poor countries of their heavy debt burdens. It does so by seeking to include all creditors and by providing significant debt relief to recipient countries. Unless strong, sustained economic growth is achieved, however the initiative will not likely provide recipient countries with a lasting exit from their debt problems. Furthermore, as long as the initiative links debt relief to poverty reduction strategies, the tension between quick debt relief and comprehensive country-owned strategies is likely to persist. These issues should not be seen, however, as a reason to abandon efforts to provide debt relief to eligible countries. Heavily indebted poor countries continue to carry unsustainable debt burdens that are unlikely to be lessened without debt relief, but participants and observers need to be more realistic about what the initiative may ultimately achieve. This testimony summarizes two GAO reports--NSIAD-00-161 and GAO-01-581.


Related Articles

  • Smart aid.  // OECD Observer;Mar2006, Issue 254, p5 

    The article focuses on the increase of financial aid from the Organization for Economic Cooperation and Development (OECD) to the world's poorest countries in year 2006. The increase includes the debt relief for Iraq and Nigeria and emergency aid for countries devastated by the tsunami. The OECD...

  • The HIPC Initiative: A Collaborative Effort to Disentangle Poor Countries from Debt-Poverty Trap. Godwin, Moye // PA Times;Mar2007, Vol. 30 Issue 3, Special section p4 

    The article reports on the launch of the Highly Indebted Poor Countries by World Bank and International Monetary Fund as a comprehensive plan to disentangle selected least developed countries from the debt-poverty trap. The initiative is intended to provide recipients with sufficient debt relief...


    Discusses the decline in the influence of the International Monetary Fund (IMF) in the international debt restructuring process. Overview of the process of underwriting IMF loans through its adjustment programs; Subsidized interest rates imposed by the fund and development banks on public...

  • IMF for President.  // Foreign Policy;Mar/Apr2003, Issue 135, p17 

    Focuses on the International Monetary Fund (IMF). Study by German economist Axel Dreher which suggests that leaders of developing countries with troubled economies should embrace the IMF; Finding that governments that struck deals with the IMF prior to reelection did well at the ballot box;...

  • The Extent to Which Countries Spend Debt Relief Resources to Reduce Poverty Is Unknown.  // GAO Reports;1/26/2009, p17 

    The article reports on the move of the World Bank and the International Monetary Fund (IMF) to spend debt relief resources to reduce poverty. It claims that although the World Bank and IMF have proposed to reduce debt service payments, the extent to which countries expend debt relief on...

  • Conclusions.  // GAO Reports;1/26/2009, p36 

    The article offers views on the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI). It states that while the initiatives are planned to offer countries with additional resources, it is not known how much of the additional resources countries will...

  • IMF sells gold for debt relief. Aslam // New York Amsterdam News;12/30/99, Vol. 90 Issue 53, p2 

    Reports on the International Monetary Fund's off-market sales of gold from its reserves to finance debt relief for some of the world's poorest countries.

  • Pedantry or Prudence: How Does the IMF Account for Grants and Loans? Heller, Peter // Finance & Development;Dec2004, Vol. 41 Issue 4, p28 

    Examines how the International Monetary Fund (IMF) accounts for loans and grants in a country's budget. Factors considered in the full assessment of a country's fiscal position; Possibility of a bias by the IMF against concessional loans; IMF's recognition of a nuanced and flexible approach to...

  • How the west dug holes for the poor.  // New Statesman;2/7/2005, Vol. 134 Issue 4726, p6 

    Focuses on international economic relations between rich countries and developing countries. Discussion of international finance during the Cold War; Ways in which the International Monetary Fund and the World Bank have perpetuated the weakening of indigenous industries, the increase of poverty,...


Read the Article

Other Topics