Debt Relief a Reality For Poor Nations

Foreign debt of developing and former Eastern Bloc nations dropped to $2.44 trillion in 2001, down from 2.59 trillion in 2000. Some 78 percent of the debt in 2001 was owed by middle-income nations.

Thanks in large part to pressure from a coalition of nongovernmental groups called Jubilee 2000, the World Bank and the IMF expanded the Heavily Indebted Poor Countries (HIPC) program in 1999. Although some 42 nations qualify for debt relief under HIPC, as of January 2003 only six nations had completed the program—while 21 additional nations had initiated it. HIPC relief is worth less than it appears on paper, however, because most debt can never be repaid anyway—in some cases, the money was squandered by corrupt governments long ago. As some of the poorest nations are now overwhelmed by the AIDS crisis, however, it is increasingly urgent that funds go into basic needs like health and primary education.

Source:

Foreign Debt Declines, Vital Signs 2003, pp. 46-47.

Worldwatch Links:

Vital Signs Fact of the Week Archive
Vital Signs 2003 press release
Take action: Vital Signs 2003, What You Can Do
More research from Worldwatch

Additional Resources:

HIPC Initiative: www.worldbank.org/hipc/

Jubilee/Drop the Debt: www.jubileeusa.org/