Towards HIPC 2.0? Lessons from Past Debt Relief Initiatives for Addressing Current Debt Problems

Debt Relief and the Rule of Thumb: Analytical History of HIPC Debt Sustainability Targets

This paper traces the origins of HIPC debt sustainability targets. These targets are interpreted as ‘switching values’, below which countries are expected to avoid debt service problems, but as such, they do not take into account that countries encounter debt problems for a variety of reasons and at different levels of debt. Most likely the ‘true’ switching value of the debt-to-export ratio of ...

Debt Relief and the Current Account: An Analysis of the HIPC Initiative

In this paper I develop a model to investigate the connection between debt relief and current account sustainability. This model can be used as a key input in assessing whether a HIPC country’s real exchange rate is ‘overvalued,’ and will thus need to go through devaluation. The working of the model is illustrated for the case of Nicaragua, a country that in 2002 had one of the highest external...

Lessons from the London Debt Agreement of 1953 for Current Debt Crises

Beyond the sheer level of relief it provided, the London Debt Agreement shows some »qualitative« dimensions, the lack of which makes present-day restructurings so protracted and painful. They include a conditioning of debt service upon trade surpluses, the possible recourse to arbitration, and the comprehensive character of the negotiation, which included most types of claims on the German econ...

Are current debt relief initiatives an option for scaling up health financing in beneficiary countries?

One central goal of the enhanced Heavily Indebted Poor Countries (HIPC) Initiative and the more recent Multilateral Debt Relief Initiative (MDRI) is to free up additional resources for public spending on poverty reduction. The health sector was expected to benefit from a considerable share of these funds. The volume of released resources is important enough in certain countries to make a differ...

Has Debt Relief Made