Globalisation:International Monetary Fund:Policies
Created in 1996 by the IMF and World Bank, the Heavily Indebted Poor Countries (HIPC) is an agreement between creditors to help the poorest and most indebted countries reduce their debt burden. Poor countries owe a combined debt of over $2 trillion to rich countries. The HIPC Initiative enables poor countries to focus on “building the policy and institutional foundation for sustainable development and poverty reduction.” Along with reducing debt, the Initiative reduces poverty, and helps a country’s fiscal and monetary performance.
HIPC is open to the poorest countries that meet the following requirements:
1. A per capita income below $785. 2. Eligibility for assistance from the World Bank’s International Development Association. 3. Have such high debt that they cannot sustain it even after applying debt relief devices. 4. A track reform of trying to reduce poverty and building economic growth.
[1] 26/2/08
