From Toronto Terms to the Hipc Initiative A Brief History of Debt Relief for Low-Income Countries
29 Pages Posted: 15 Feb 2006
Date Written: October 1999
Abstract
The low-income country debt crisis had its origins in weak macroeconomic policies, and official creditors` willingness to take risks unacceptable to private lenders. Payments problems were initially addressed through nonconcessional reschedulings and new lending that maximized financing while containing the budgetary costs for creditors. This led to an unsustainable buildup in debt stocks. More recently, debt ratios have improved, reflecting both adjustment and substantial debt relief. The paper estimates debt relief initiatives since 1988 have cost creditors at least $30 billion, and possibly much more. This compares with the estimated costs of about $27 billion under the enhanced HIPC Initiative.
Keywords: External Debt HIPCs Low-Income Countries
JEL Classification: H63 F34
Suggested Citation: Suggested Citation
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