Eurodad's campaign on multilateral debt: the 1996 HIPC debt initiative and beyond

Development in Practice

Volumn 8, Issue 3, 1998, Pages 323-334

  Bökkerink, Sasja ^c   Van Hees, Ted ^a,b  

^a Eurodad ^*

^b Eurodad   (Belgium)

^c NONE   (Netherlands)

Author keywords

[No Author keywords available]

Indexed keywords

DEBT ALLEVIATION; GLOBAL FINANCE; IMF; WORLD BANK;

EID: 0031719733     PISSN: 09614524     EISSN: None     Source Type: Journal    
DOI: 10.1080/09614529853611     Document Type: Article

References (24)

1. World Bank, Reducing the Debt Burden of Poor Countries. A Framework for Action, Washington: World Bank, September 1994, p. 48.
2. World Bank Task Force, 'The Multilateral Debt Facility', unpublished paper, Washington, July 1995.
3. Forty-one countries are classified as HIPCs.
4. Throughout this article, Eurodad (European Network on Debt and Development) refers to the Eurodad Secretariat and not to the Eurodad network which consists of NGOs in 16 European Countries. Eurodad has been working on the multilateral debt campaign with several active NGOs of the network as well as with NGOs outside it and other players, including governments in the USA, Canada, Japan, and the South.
5. To protect the credit rating of the IFIs, it is an unwritten rule that obligations to these institutions are serviced prior to other obligations. For the same reason, the IFIs have always refused to grant debt relief. Percy Mistry and others have argued that acknowledging the existence of bad debts and acting accordingly would not affect the credit rating. See, for instance, Percy Mistry (1994), Multilateral Debt: An Emerging Crisis?, The Hague: Fondad. Eurodad believes that the IFIs should not be exempt from offering debt relief.
6. The NGO position was reflected in a letter from the global network of NGOs working on debt (the Global Debt Treaty Movement) to the G7 in Naples. This became the major guideline for NGOs working on multilateral debt.
7. World Bank/IMF, 'Multilateral Debt of the Heavily Indebted Poor Countries', unpublished, Washington, 6 February 1995.
8. Naples Terms are the latest terms for debt relief offered by the Paris Club, the group of bilateral creditors (mainly OECD countries). The maximum debt relief offered according to Naples Terms is a 67 percent reduction of eligible debt stock. For details, see 'Naples Terms: Not What they Appear to Be', Eurodad briefing paper, Brussels, 1995.
9. For a summary of Eurodad's comments, see 'Multilateral Debt: A Problem to be Acknowledged and Resolved', Eurodad briefing paper, Brussels, March 1995.
10. World Bank/IMF, 'Issues and Developments in Multilateral Debt and Financing for the Heavily Indebted Poor Countries: Further Consideration', unpublished paper, Washington, 30 March 1995.
11. These are the IMF's 'Right Accumulation Programme', the World Bank's 'Additional Support for Workout Programmes in Countries with Protracted Arrears', and IDA's 'Fifth Dimension'. For more information, see Eurodad World Credit Tables 1994/95.
12. For an overview of these options, see Eurodad World Credit Tables 1997, Brussels, 17-18 September 1996.
13. G7, 'G7 Background Document to the Economic Communiqué', unpublished paper, June 1995.
14. Eurodad, 'Multilateral Debt and a Multilateral Debt Facility. Comments and Recommendations', Brussels, 22 December 1995.
15. These were: World Bank, 'Analytical Aspects of the Debt Problems of Heavily Indebted Poor Countries', unpublished, January 1996; World Bank/IMF, 'Debt Sustainability Analysis for the Heavily Indebted Poor Countries', unpublished, 31 January 1996; World Bank/IMF, 'Proposed Action to Resolve the Debt Problems of Heavily Indebted Poor Countries', unpublished, 6 March 1996.
16. These were: World Bank, 'Analytical Aspects of the Debt Problems of Heavily Indebted Poor Countries', unpublished, January 1996; World Bank/IMF, 'Debt Sustainability Analysis for the Heavily Indebted Poor Countries', unpublished, 31 January 1996; World Bank/IMF, 'Proposed Action to Resolve the Debt Problems of Heavily Indebted Poor Countries', unpublished, 6 March 1996.
17. These were: World Bank, 'Analytical Aspects of the Debt Problems of Heavily Indebted Poor Countries', unpublished, January 1996; World Bank/IMF, 'Debt Sustainability Analysis for the Heavily Indebted Poor Countries', unpublished, 31 January 1996; World Bank/IMF, 'Proposed Action to Resolve the Debt Problems of Heavily Indebted Poor Countries', unpublished, 6 March 1996.
18. Matthew Martin, 'A Multilateral Debt Facility: Global or National', paper prepared for the G24, March 1996.
19. This could be done by including all debt generated from loans after a debtor government's first appearance at the Paris Club - the so-called 'cut-off date', which thus far is not eligible for debt relief.
20. See IMF, 'ESAF Financing Modalities: Further Consideration', unpublished paper, 15 May 1996; World Bank, 'Status Report on World Bank Participation in the HIPC Initiative', unpublished paper, 4 June 1996; IMF, 'Financing a Continuation of ESAF and the Fund's Participation in the HIPC Initiative', unpublished paper, 23 August 1996; World Bank, 'World Bank Participation in the HIPC Debt Initiative', 26 August 1996.
21. See IMF, 'ESAF Financing Modalities: Further Consideration', unpublished paper, 15 May 1996; World Bank, 'Status Report on World Bank Participation in the HIPC Initiative', unpublished paper, 4 June 1996; IMF, 'Financing a Continuation of ESAF and the Fund's Participation in the HIPC Initiative', unpublished paper, 23 August 1996; World Bank, 'World Bank Participation in the HIPC Debt Initiative', 26 August 1996.
22. See IMF, 'ESAF Financing Modalities: Further Consideration', unpublished paper, 15 May 1996; World Bank, 'Status Report on World Bank Participation in the HIPC Initiative', unpublished paper, 4 June 1996; IMF, 'Financing a Continuation of ESAF and the Fund's Participation in the HIPC Initiative', unpublished paper, 23 August 1996; World Bank, 'World Bank Participation in the HIPC Debt Initiative', 26 August 1996.
23. See IMF, 'ESAF Financing Modalities: Further Consideration', unpublished paper, 15 May 1996; World Bank, 'Status Report on World Bank Participation in the HIPC Initiative', unpublished paper, 4 June 1996; IMF, 'Financing a Continuation of ESAF and the Fund's Participation in the HIPC Initiative', unpublished paper, 23 August 1996; World Bank, 'World Bank Participation in the HIPC Debt Initiative', 26 August 1996.
24. Four of the 41 HIPCs - Liberia, Somalia, Sudan, and Nigeria - were excluded from the analysis. The 19 remaining countries were potential candidates. For six of them, 67 per cent bilateral and commercial debt-stock relief would be sufficient while 13 countries would need to go to the second phase. For three of them, bilateral and commercial debt relief would be sufficient, while the remaining 10 countries would also need multilateral debt relief.