Debt relief, the new policy conditionality and poverty reduction strategies

In spite of extensive policy reforms, rates of external indebtedness increased in many LDCs during the 1990s, and according to World Bank calculations, 28 LDCs - including two-thirds of LDCs that are not island economies - are entering the new millennium with levels of external indebtedness that are unsustainable even after the full deployment of traditional (pre-HIPC) debt relief mechanisms. One of the arguments of the last chapter was that the effectiveness of reforms in LDCs depended on the severity of their debt problems. This chapter assesses from the point of view of LDCs the effectiveness of the HIPC Initiative, which was introduced in 1996 as a new mechanism to deal with the debt problems of low-income countries. It addresses five questions.

Sustainable Development Goals:

Affordable and Clean Energy

Industry, Innovation and Infrastructure

Peace, Justice and Strong Institutions