Debt sustainability

When the United Nations Millennium Declaration was adopted in 2000, many developing-country Governments, especially those of low-income countries and a number of middle-income countries, were suffering under unsustainable external debt burdens. The international community had already established the Heavily Indebted Poor Countries (HIPC) Initiative in 1996 to address the debt problems of a group of low-income countries in a comprehensive manner. The Initiative was enhanced in 1998, but by 2000 was still not providing sufficient relief. In addition, in lieu of the 1990s bailouts in Asia and elsewhere, the international community had begun to develop a new international policy to push for cooperative “private sector involvement” in workouts from sovereign debt crises of middle-income countries, whereby private creditors might take losses in debt restructurings. However, it was recognized at the time of the Millennium Declaration that the HIPC and other initiatives were incomplete. Ten years later, they remain incomplete.

Related Subject(s): Economic and Social Development