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From Toronto Terms to the HIPC Initiative: A Brief History of Debt Relief for Low-Income Countries
Author:
Ms. Christina Daseking
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and
Mr. Robert Powell
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Series:
IMF Working Papers
Volume/Issue:
Volume 1999: Issue 142
Language:
English
Publication Date:
01 Oct 1999
DOI:
https://doi.org/10.5089/9781451856231.001
ISBN:
9781451856231
ISSN:
1018-5941
Pages:
29
Keywords:
WP; debt forgiveness; reduction option; cash flow; discount rate; External Debt; HIPCs; Low-Income Countries; Paris LIC Paris Club; debt reduction; present value; PV reduction; Debt relief; Debt reduction; Debt rescheduling; Debt service; Stocks; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The low-income country debt crisis had its origins in weak macroeconomic policies, and official creditors’ willingness to take risks unacceptable to private lenders. Payments problems were initially addressed through nonconcessional reschedulings and new lending that maximized financing while containing the budgetary costs for creditors. This led to an unsustainable buildup in debt stocks. More recently, debt ratios have improved, reflecting both adjustment and substantial debt relief. The paper estimates debt relief initiatives since 1988 have cost creditors at least $30 billion, and possibly much more. This compares with the estimated costs of about $27 billion under the enhanced HIPC Initiative.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 1999: Issue 142