What's Wrong with the Hipc Initiative and What's Next?

20 Pages Posted: 24 Nov 2002

See all articles by Bernhard G. Gunter

Bernhard G. Gunter

Bangladesh Development Research Center (BDRC); American University - Department of Economics

Abstract

This article reviews the problems of the enhanced HIPC initiative and outlines possible steps towards a more efficient debt and poverty reduction initiative. After brief comments on the rationale for debt relief, it analyses some key issues related to the HIPC initiative's aim to achieve debt sustainability, describes other fundamental problems of the HIPC framework, and discusses some less known but still crucial flaws of the initiative. It then proceeds with necessary improvements for an efficient debt reduction programme, possible modifications for a revised HIPC initiative, and some suggestions on how to overcome financing constraints. Apart from being in several respects unfair, the current framework is unlikely to permit a lasting exit from unsustainable debt for many HIPCs, and may lead to a decline in traditional development assistance.

Suggested Citation

Gunter, Bernhard G., What's Wrong with the Hipc Initiative and What's Next?. Development Policy Review, Vol. 20, No. 1, pp. 5-24, 2002. Available at SSRN: https://ssrn.com/abstract=308970

Bernhard G. Gunter (Contact Author)

Bangladesh Development Research Center (BDRC) ( email )

2508 Fowler Street
Falls Church, VA 22046-2012
United States

American University - Department of Economics ( email )

4400 Massachusetts Avenue, N.W.
Washington, DC 20016-8029
United States

HOME PAGE: http://www.american.edu/cas/faculty/gunter.cfm

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