Heavily Indebted Poor Countries (HIPC) Initiative - Statistical Update

Heavily Indebted Poor Countries (HIPC) Initiative - Statistical Update

Abstract

Heavily Indebted Poor Countries (HIPC) Initiative - Statistical Update

I. Guide to the Tables

1. This update provides recent data on the status of implementation of the Heavily Indebted Poor Countries (HIPC) Initiative. In September 2002, the Bank and Fund Boards agreed that staffs would prepare six-monthly statistical updates on implementation in addition to annual reviews. Below are some highlights drawn from the accompanying tables.

A. Progress in Implementation (Tables 1, 2)

Table 1.

HIPC Initiative: Progress in Implementation Status as of January 2003

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Sources: Staff estimates

Refers to the Enhanced HIPC Initiative.

Based on staffs’ judgment of progress towards the decision/completion point.

Countries that are considered retroactive - not subject to the requirement to have a PRSP under implementation for at least one year under the enhanced framework.

Completion point for Mali was approved by the World Bank and IMF’s Executive Boards on March 6, 2003.

Countries reported in the Fall 2002 Progress Report as having encountered difficulties in the implementation of their macroeconomic programs.

Countries in non accrual status with World Bank disbursements suspended.

These countries are expected to achieve debt sustainability after receiving debt relief provided under traditional mechanisms.

Table 2.

HIPC Initiative: Committed Debt Relief and Outlook 1/ Status as of March 7, 2003

(In millions of U.S. dollars)

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Source: HIPC Initiative country documents; World Bank and IMF staff estimates.

Commited Debt Relief under the assumption of full participation of the creditors.

As of the completion point year for the Original HIPC Initiative and as of the decision point year for the Enhanced HIPC Initiative.

The assistance under the enhanced HIPC Initiative includes the topping up with the NPV calculated in terms of the completion point year.

The figures for the Enhanced HIPC Initiative correspond to the Completion Point Document approved by the World Bank and IMF’s Executive Boards on March 6, 2003.

It is suggested that debt relief under the original framework be overtaken by HIPC relief under the enhanced framework.

Preliminary document issued.

Countries that have reached their decision points under the enhanced HIPC framework through end-February 2003 and Côte d’Ivoire, which had reached the decision point under the original framework earlier.

Pre Decision Point Countries

2. Many of the 12 countries that have not yet reached the decision point are affected by conflict and in some instances have substantial arrears outstanding to various creditors. In

Côte d’Ivoire, sudden domestic conflict prevented the country from reaching its decision point as anticipated last fall, and the preparation of a preliminary document was delayed in the case of the Central African Republic for the same reason. The Democratic Republic of Congo, however, has made significant progress and is expected to reach its decision point soon.

Countries in the Interim stage

3. The number of countries that have reached their completion points has increased by one (Mali)1 since September 2002 and Benin is expected to reach its completion point within a few weeks. Most of the countries in the interim period are still within the timeframe envisaged for this stage when the Enhanced HIPC Initiative was launched.2 Nevertheless, some countries have experienced delays in reaching their completion points relative to the dates foreseen at the time of their respective decision points. The reasons for the delays are:

  • the process of preparing high quality PRSPs reflecting broad consultation has taken longer than anticipated. Relative to earlier expectations, delays in excess of six months were encountered in at least 13 of the 19 interim period countries3, of which seven have yet to finalize their PRSPs;4

  • PRGF programs have experienced interruptions, usually because of fiscal slippages. There are currently two countries that have neither had new programs or program reviews approved within the last six months nor have much prospect for coming back on track with PRGF programs within the next six months;5 and

  • implementation of other completion point triggers has generally been slower than envisaged.

B. Summary of Costs (Tables 3, 4)6

4. There is little change in the cost of debt relief under the Initiative to 34 countries covered under the September 2002 costing exercise, with the estimated amount now standing at US$37.2 billion in 2001 NPV terms.7 Converting this amount to bring it into 2002 NPV terms8, the estimate would amount to US$39.2 billion (Table 3). The costs remain broadly equally divided between bilateral and multilateral creditors (Table 4). These estimates do not include the possible costs of topping up for countries currently in the interim period.9 The framework has so far committed an estimated US$27.3 billion of HIPC relief in 2002 NPV terms to the 26 decision point countries (Table 4).

Table 3.

HIPC Initiative: Changes in the Estimates of Potential Costs by Creditor Group (34 countries)

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Source: HIPC Initiative country documents; World Bank and IMF staff estimates.

All HIPCs, excluding potentially sustainable cases (Angola, Kenya, Vietnam, and Yemen) and Liberia, Lao P.D.R., Somalia, and Sudan.

Reflects: i) updated DSAs for Democratic Republic of Congo and Mali; and ii) updated assumptions on the discount rate used in the NPV calculation, which has been revised from 6 to 5.45 percent.

Table 4.

HIPC Initiative: Breakdown of Estimated Potential Costs by Main Creditors and by Country Groups

(In billions of U.S. dollars, in 2002 NPV terms) 1/

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Source: Country authorities; World Bank and IMF staff estimates.

All HIPCs, excluding potentially sustainable cases (Angola, Kenya, Vietnam, and Yemen) and Liberia, Lao P.D.R., Somalia, and Sudan.

Benin, Bolivia, Burkina Faso, Guyana, Mali, Mozambique, Senegal, and Uganda. Côte d’Ivoire is a retroactive case but has not reached its enhanced decision point.

Cameroon, Chad, Ethiopia, The Gambia, Ghana, Guinea, Guinea-Bissau, Honduras, Madagascar, Malawi, Mauritania, Nicaragua, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Tanzania, and Zambia.

Burundi, Central African Republic, Comoros, Democratic Republic of Congo, Republic of Congo, Côte d’Ivoire, Myanmar, and Togo.

C. Multilateral Creditors: Costs, Commitments and Delivery (Tables 5, 6A, 6B, 7A, 7B, 8)

Table 6B.

HIPC Initiative: Estimated Delivery of World Bank Assistance, 2000-0’

(In millions of U.S. dollars)

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Source: HIPC country documents; and World Bank staff estimates.

Figures correspond to the respective fiscal year period.

These numbers differ from those in the 2nd completion point document, as the document did not reflect new borrowing that took place between the original decision point and the enhanced decision point.

These numbers differ from those in the 2nd completion point document, as a new schedule of delivery was approved at end-January 2003.

Weighted average.

Table 7B.

HIPC Initiative: Estimated Delivery of IMF Assistance, 1998-2009 1/

(In millions of U.S. dollars)

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Source: HIPC country documents and IMF staff estimates.

Under the Original and Enhanced HIPC Initiative.

Obligations to the Fund as presented in the members’ respective decision point documents under the Enhanced HIPC Initiative, with revisions where necessary.

Fiscal year data.

Using SDR/U.S. dollar exchange rate at the completion point (for original HIPC assistance) or at the decision point (for enhanced HIPC assistance). Includes projected investment income.

Weighted average.