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Heavily Indebted Poor Countries (HIPC) Initiative : status of implementation (English)

This report reviews implementation of the Heavily Indebted Poor Countries (HIPC) Initiative since the last report of September 2002. In addition to updating the information on the delivery of HIPC debt relief, and associated assistance, it updates the estimated costs of the HIPC Initiative, and the status of creditor participation. It examines the key factors affecting the pace of implementation of the Initiative. including specific impediments in countries that have experienced difficulties making progress towards reaching the decision, and completion points. The report briefly examines the issues of governance, maintenance of long-term debt sustainability, and the calculation of additional debt relief at the completion point. Debt stocks in the 27 HIPCs that had reached the decision point by July 2003, are projected to decline by about two-thirds once they reach their respective completion points. HIPCs in the interim period, have benefited from Paris Club debt relief, as well as relief from several multilateral creditors under the HIPC Initiative. This relief lowered debt-service ratios immediately after the decision point. The data suggest that HIPC relief delivered since 1998 has been additional to other forms of external financing assistance. Since September 2002, two HIPCs have reached their completion points, and one has reached the decision point. Delays in reaching the completion point have been attributed to the challenge of maintaining macroeconomic stability, and preparing and implementing Poverty Reduction Strategies. Preparing fully participatory PRSPs has taken longer than expected, but 15 of the 19 countries in the interim period have finalized it. Good progress has been made in satisfying social and structural triggers. Although these triggers have not been the proximate cause of delays so far, they could cause delays in some countries in the future. And, although the process of reaching the completion point has taken longer than anticipated, and challenges remain in reaching the decision point, existing standards for policy performance are being maintained to ensure that the Initiative's objectives are reached.


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    The World Region,

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    Heavily Indebted Poor Countries (HIPC) Initiative : status of implementation

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Heavily Indebted Poor Countries (HIPC) Initiative : status of implementation (English). Washington, D.C. : World Bank Group.