Progress under the Heavily Indebted Poor Countries Initiative

Heavily Indebted Poor Countries and the Millennium Development Goals

Turkey believes that heavily indebted countries deserve special attention.

Beyond the Heavily Indebted Poor Countries Initiative the development financing conundrum

12 IMF Heavily Indebted Poor Countries (HIPC) Initiative Statistical Update, April 2005.

13. Emphasizes the need to secure adequate funding for an overall financing plan for the enhanced Heavily Indebted Poor Countries Initiative, including in particular the Heavily Indebted Poor Countries Trust Fund and the Poverty Reduction and Growth Facility Heavily Indebted Poor Countries Trust Fund in the context of fair, equitable and transparent burden sharing

4. Calls upon the heavily indebted poor countries to take, as soon as possible, the policy measures necessary to become eligible for the enhanced Heavily Indebted Poor Countries Initiative and to reach the decision point

24. Calls upon the heavily indebted poor countries to take, as soon as possible, the policy measures necessary to become eligible for the enhanced Heavily Indebted Poor Countries Initiative and to reach the decision point

5. Calls upon the heavily indebted poor countries to take, as soon as possible, the policy measures necessary to become eligible for the enhanced Heavily Indebted Poor Countries Initiative and to reach the decision point

C. The Group of Eight proposals for debt cancellation for Heavily Indebted Poor Countries

Stressing the importance of addressing the challenges of those heavily indebted poor countries that are facing difficulties in reaching the completion point under the Heavily Indebted Poor Countries Initiative, and expressing concern that some heavily indebted poor countries continue to face substantial debt burdens and need to avoid rebuilding unsustainable debt burdens after reaching the completion point under the Initiative,

While the extension of the heavily indebted poor countries debt initiative until the end of 2006 is welcome, full cancellation of the heavily indebted poor countries' external debt might be needed to break the vicious cycle of poverty faced by them.

Welcoming the fact that the Heavily Indebted Poor Countries Initiative has enabled heavily indebted poor countries to markedly increase their expenditures on health, education and other social services consistent with national priorities, development plans, and internationally agreed development goals, including the Millennium Development Goals,

22. Welcomes the inclusion of the Democratic Republic of the Congo in the Heavily Indebted Poor Countries Initiative

Significant steps had also been taken to reduce the debt burden of the most heavily indebted poor countries.

But there were also calls for action on the issue of debt in all heavily indebted African countries.

21. Calls for a comprehensive and sustainable solution to the external debt problems of African countries, including cancellation or restructuring for heavily indebted African countries not part of the Heavily Indebted Poor Countries Initiative that have unsustainable debt burdens, and emphasizes the importance of debt sustainability

We welcome the initiative of the finance ministers of the Group of Eight to cancel the debt of 18 heavily indebted poor countries. We hope to see further debt relief for other heavily indebted countries so that financial resources can be released to meet urgent development needs.

Significant steps have also been taken to reduce the burden of debt on the most heavily indebted poor countries.

Another important step forward was the finalization of the debt relief plan for the Heavily Indebted Poor Countries (HIPC).

Before the financial crisis erupted in 2008, consumers buoyed US demand by borrowing heavily against their rising house prices. Now these heavily indebted households cannot borrow and spend any more.

Welcoming the fact that the Heavily Indebted Poor Countries Initiative and the Multilateral Debt Relief Initiative have enabled heavily indebted poor countries to increase their expenditures on health, education and other social services consistent with national priorities, development plans and internationally agreed development goals, including the Millennium Development Goals,

Options for lower debt burdens on Governments of heavily indebted developing countries include debt cancellation and debt swaps for sustainable development.

9. Calls upon those heavily indebted poor countries that have not already done so, to take, as soon as possible, the policy measures necessary to become eligible for the enhanced Heavily Indebted Poor Countries Initiative and to reach the decision point, inter alia, through the formulation of poverty reduction strategies, where they exist

21. Calls for a comprehensive and sustainable solution to the external debt problems of African countries, including cancellation or restructuring, as appropriate, and on a case by case basis, for heavily indebted African countries not part of the Heavily Indebted Poor Countries Initiative that have unsustainable debt burdens, and emphasizes the importance of debt sustainability

Recognizing that commodity prices are an important element for heavily indebted poor countries that are commodity dependent in maintaining long term debt sustainability,

7 International Monetary Fund and World Bank, Heavily Indebted Poor Countries (HIPC) Initiative Status of Implementation (Washington, D.C., 20 August 2004), p. 7.

But such relief should be extended to include countries other than heavily indebted poor ones, as well as non African middle income countries.

Noting that the Heavily Indebted Poor Countries Initiative aims to promote debt sustainability in the poorest countries and that its implementation could be enhanced by streamlining conditionalities, and while acknowledging further progress in the implementation of the Initiative, that many heavily indebted poor countries continue to face substantial debt burdens after reaching the completion point under the Initiative,

Reiterates its call upon developed countries, as expressed in the Millennium Declaration, to complete the enhanced programme of debt relief for the Heavily Indebted Poor Countries Initiative and to ensure that it is fully financed, and in this regard underscores the importance of full creditor participation in contributing their share to implementing the enhanced Heavily Indebted Poor Countries Initiative

Promote a comprehensive and durable solution to the external debt problems of African countries, including through the cancellation of 100 per cent of multilateral debt consistent with the Heavily Indebted Poor Countries Initiative and significant reduction or cancellation of the debt of heavily indebted low and middle income developing countries that are not part of the Initiative

Recognizing that commodity prices are an important element for heavily indebted poor countries that are dependent on commodities for maintaining long term debt sustainability,

(Indeed, by most accounts, it is about to default.) And the same is true, albeit to a lesser degree, for other heavily indebted sovereigns.

If the situation persisted, many poor developing countries and especially the heavily indebted African countries would be unable to fulfil their Millennium Development Goals.

Burundi is one of the countries that benefited from the Heavily Indebted Poor Countries (HIPC) Debt Initiative it reached the decision point last July.

(d) To acknowledge the problems of the debt sustainability of some low income countries that are not heavily indebted, in particular those facing exceptional circumstances

We congratulate the Group of Eight for the commitment adopted at the Gleneagles Summit, giving much needed debt relief to 18 heavily indebted poor countries.

For many heavily indebted non HIPC and middle income countries, debt sustainability will require significantly more debt reduction or restructuring than has yet been proposed.

We therefore support the accelerated implementation of the Heavily Indebted Poor Countries (HIPC) Initiative by providing assistance extended fully in the form of a gift.

Although Zambia had reached the completion point under the Heavily Indebted Poor Countries (HIPC) Initiative, it continued to struggle with debt, which hindered its economic development.

While the Heavily Indebted Poor Countries (HIPC) Initiative has delivered tangible benefits to several African and least developed countries, many others in similar situations await some relief.

Debt relief initiatives should be additional to ODA resources for development purposes and should be all encompassing, so that all heavily indebted developing countries can benefit appropriately.

Debt relief for the countries of the region remains a major focus of our assistance to Africa, including through the Heavily Indebted Poor Countries (HIPC) Debt Initiative.

6. Reiterates its call upon developed countries, as expressed in the Millennium Declaration,See resolution 55 2. to complete the enhanced programme of debt relief for the Heavily Indebted Poor Countries Initiative and to ensure that it is fully financed, and in this regard underscores the importance of full participation by creditors in contributing their share to implementing the enhanced Heavily Indebted Poor Countries Initiative

Secondly, China will further expand its aid programme to the heavily indebted poor countries and the least developed countries and, working through bilateral channels, will write off or in other ways forgive, within the next two years, all portion overdue as of the end of 2004 of interest free and low interest governmental loans owed by all heavily indebted poor countries having diplomatic relations with China.