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$1bn Committed at Annual Meetings 'not enough' says Jubilee Research By Romilly Greenhill 1st October 2002 During the Annual Meetings of the World Bank and IMF in Washington on September 28th and 29th 2002, creditor countries committed themselves to providing the $1bn of additional debt relief that had been announced during the G8 meeting in Kananskis. By the time of the meetings, a total of 15 creditor countries had announced that they would be making additional contributions to the HIPC Trust Fund, which covers the costs of providing HIPC relief to poor countries. As a result, World Bank President James Wolfensohn has announced that he is now 'sleeping well at night' over the HIPC initiative. However, analysis by Jubilee Research has shown that even the $1bn additional debt relief committed will not be enough to bring down countries debt levels to the 150% debt-to-export target which is considered a 'sustainable' level of debt under the HIPC initiative. This is because the HIPC initiative is supposed to operate under a 'burden sharing' approach whereby all creditors, both bilateral and multilateral, share the relief required to meeting the 150% target. Additional debt relief committed by bilateral creditors as a result of pressure from the international Jubilee 2000 campaign was originally supposed to provide more relief - to bring debt-to-export ratios down even further. Now, however, the rules have changed. The 'additional' bilateral relief committed by bilateral creditors is no longer really additional, but will serve to substitute for relief that should be provided by multilateral creditors - most notably the World Bank and IMF. In practice, therefore, the HIPC countries will be no better off as a result of the 'additional' relief which Jubilee 2000 groups fought so hard for. Jubilee Research has calculated that at least another $2bn-$3bn of relief will be needed if the HIPC countries are to be given the additional relief that they deserve. Maybe Mr Wolfsensohn should not sleep quite so easily, after all. For a full analysis of the status of the HIPC initiative, see 'Latest HIPC Report brings more bad news for poor countries' available at http://www.jubileeresearch.org/hipc/hipc_news/latest190902.htm For further information on the HIPC initiative, including the relief committed and delivered to date, see the 'Tracking HIPC' section of the Jubilee Research website at http://www.jubileeresearch.org/hipc/tracking_hipc.htm
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