This report was originally published by EURODAD
In July 2005, G8 governments made a bold announcement that they had agreed to cancel up to US$55 bn owed by some of the world’s most impoverished and indebted nations. This followed significant public pressure by social movements and non-governmental organisations (NGOs) around the globe.
Some 29 beneficiary countries will save US$1.25 bn in debt service payments in 2007. Their governments have pledged to use these resources to boost spending on a number of Millennium Development Goals (MDGs), including the social sectors and basic infrastructure development. These were some of the core objectives behind international campaigns for debt cancellation. But the governments which benefited from debt service reductions also faced reductions in new finance.
From January 2006, a coalition of NGOs launched a campaign to extend the Multilateral Debt Relief Initiative (MDRI) to further creditors, in particular the Inter-American Development Bank (IDB) so that Heavily Indebted Poor Countries (HIPCs) in Latin America (Bolivia, Guyana, Haiti, Honduras and Nicaragua) could benefit.
There have also long been questions about which countries are included in the HIPC and MDRI lists and about the onerous conditions faced by governments considering joining.
This paper updates civil society organisations and other stakeholders on the latest developments as they relate to the HIPC Initiative and the MDRI. We ask:
Which countries are in and which are out of the MDRI?
Which creditors are in and which have stayed out?
What debts are in and what’s left on the books after the MDRI?
How much fiscal space has the MDRI really freed-up for the countries involved?
Has the HIPC “medicine”, i.e. conditions changed?
What issues are now on the table post-MDRI?