The IMF and the World Bank are seeking the views of the international community on the Heavily Indebted Poor Country (HIPC) Initiative, which they joined forces to launch in 1996 to reduce the external debt of the world’s poorest countries. In the first stage of a two-part consultative process, to be conducted on the Internet, the two organizations are soliciting general comments on the HIPC Initiative as well as input on specific technical questions about debt sustainability, financing, and fiscal targets. The deadline for responses is March 15. In the second stage, to be completed by June 18, they are requesting input on poverty reduction, debt management within the HIPC countries, and the current approach for delivering debt relief, with its focus on the long term.
The challenge for the IMF and the World Bank is to ensure that the views that emerge from these consultations can be considered in policy discussions leading up to a summit of the seven major industrial countries scheduled for early June in Cologne, Germany. Through the Cologne summit, the leaders are expected to provide fresh impetus to the HIPC Initiative, which stands to benefit from the different ideas and perspectives of the international community.
The HIPC Initiative has accomplished a lot in a short time. So far, Bolivia, Burkina Faso, Cote d’Ivoire, Guyana, Mozambique, and Uganda have qualified for assistance under the initiative by implementing social and economic reforms as part of an integrated approach for achieving durable growth. The assistance extended to these five countries is estimated to reduce their debt service by some $5 billion.