8.10 Total number of countries that have reached their HIPC decision points

Modified on 2013/03/26 17:57 by The World Bank — Categorized as: Goal 8

Contents

GOAL AND TARGET ADDRESSED

Goal 8. Develop a global partnership for development. Target 8D. Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the long term.

DEFINITION AND METHOD OF COMPUTATION

Definition
This indicator is the number of countries that have qualified for heavily indebted poor countries (HIPC) initiative assistance and that have reached their decision point or completion point under the enhanced HIPC initiative.

Concepts
The heavily indebted poor countries (HIPC) initiative is a major international effort targeted specifically at improving developing countries’ debt sustainability. Launched in 1996 and enhanced in 1999, the HIPC initiative is a joint effort of multilateral, official bilateral and commercial creditors to reduce the external debt of the world’s most debt-laden poor countries to sustainable levels.

The HIPC decision point is the date at which an HIPC commits to undertake additional reforms and to develop and implement a poverty reduction strategy under the HIPC initiative. HIPCs reach the decision point if they have a track record of macroeconomic stability, have prepared an Interim Poverty Reduction Strategy through a participatory process, and have cleared or reached an agreement on a process to clear outstanding arrears to multilateral and all other external creditors. To reach the decision point, the country also has to be still heavily indebted according to the most recent data prior to the decision point. A country's debt level is considered unsustainable if the present value of external public and publicly guaranteed debt-to-export levels of 150 percent; or, when the country has a very open economy where the exclusive reliance on external indicators may not adequately reflect the fiscal burden of external debt, the present value of external public and publicly guaranteed debt-to-government revenues are above of 250 percent. This is calculated using the most recent data prior to the decision point with a 3-month grace (i.e. end-2006 data may be used for a decision point date up to March 2008) The amount of debt relief necessary to bring countries’ debt indicators to HIPC thresholds is calculated, and countries begin receiving debt relief on a provisional basis.

The HIPC completion point is the date at which countries successfully complete the key structural reforms agreed at the decision point, including the development and one-year implementation of a poverty reduction strategy. Countries must also have maintained macroeconomic stability under an Extended Credit Facility and other IMF supported programs. Countries then receive the balance of debt relief promised under the HIPC initiative without any further policy conditions.

Method of computation
The indicator is calculated as the cumulative number of countries that have reached the decision (or completion) point under the enhanced HIPC initiative.

RATIONALE AND INTERPRETATION

A global partnership for development requires increased debt reduction for heavily indebted poor countries. This indicator is used to track the commitments made by donor countries and the international financial institutions to provide meaningful debt relief to the poorest developing countries.

This indicator is only relevant to, and is calculated at, the global level to monitor the implementation of the HIPC initiative.

SOURCES AND DATA COLLECTION

Information is compiled by the International Monetary Fund (IMF) and World Bank from their HIPC decision and completion point documents. The lag between the reference year and actual production of data series is around one year. Country level data for this indicator are published in the HIPC Initiative and the Multilateral Debt Relief Initiative (MDRI) - Status of Implementation reports. The information is updated annually by IMF and the World Bank and is accessible on the external website of the HIPC Initiative at http://go.worldbank.org/85B908KVE0.

DISAGGREGATION

Not applicable for this indicator.

COMMENTS AND LIMITATIONS

The HIPC Initiative was launched in 1996. The earliest available data are for 2000. The indicator is limited to the HIPC countries. It does not indicate debt levels or debt relief provided (see “COMMENTS AND LIMITATIONS” for Indicators 8.11 and 8.12).

GENDER EQUALITY ISSUES

Not applicable for this indicator.

DATA FOR GLOBAL AND REGIONAL MONITORING

Data for this indicator are provided by the World Bank and the IMF.

The International Development Agency (IDA) and the IMF make an assessment of each country’s eligibility for assistance under the Enhanced HIPC Initiative and submit an assessment document for the approval of the Executive Boards of the IMF and IDA. When the Board approves the assessment document, the country is deemed to have reached the decision point.

The IDA and the IMF assess the country’s performance and progress in meeting the requirements for reaching the completion points under the Enhanced HIPC initiative, as set out in the decision point document, and submit an assessment report to the Executive Board of the IDA and IMF. Once the Board approves the completion point document, the country is deemed to have reached the completion point.

All documents related to countries’ decision and completion points can be accessed at the World Bank website.

Regional and global data are produced by summing the number of countries reaching decision and completion points.

SUPPLEMENTARY INFORMATION



EXAMPLES



REFERENCES

INTERNATIONAL DEVELOPMENT ASSOCIATION AND INTERNATIONAL MONETARY FUND (annual). Heavily Indebted Poor Countries (HIPC) Initiative and Multilateral Debt Relief Initiative (MDRI)—Status of Implementation. Washington DC. Available from http://go.worldbank.org/LG6DPCAI60

INTERNATIONAL MONETARY FUND (annual). Debt Relief under the Heavily Indebted Poor Countries (HIPC) Initiative. Washington, D.C. Internet site http://www.imf.org/external/np/exr/facts/hipc.htm

WORLD BANK (annual). Completion Point Documents. Washington, D.C. Internet site http://go.worldbank.org/T0OFS29N10

WORLD BANK (annual). Decision Point Documents. Washington, D.C. Internet site http://go.worldbank.org/9W8I0X55A0

WORLD BANK (annual). The Enhanced Heavily Indebted Poor Countries Initiative. Washington, D.C. Internet site http://go.worldbank.org/85B908KVE0

WORLD BANK (annual). Steps of the HIPC Initiative. Washington, D.C. Internet site http://go.worldbank.org/76G2TJJO30