§ Lord Hyltonasked Her Majesty's Government: Whether it is correct that Cambodia, Georgia, Haiti and Afghanistan do not qualify for debt relief, although they are eligible under the rules of heavily indebted poor countries; and, if so, what action they will take to remedy this. [HL314]
§ Baroness AmosThe list of countries eligible for debt relief under the heavily indebted poor countries (HIPC) initiative is not fixed. Any country can be added to the list if it meets the three eligibility criteria: the country must be eligible only for concessional lending from the IMF and World Bank; it must face an unsustainable debt burden after the application of traditional debt relief mechanisms; and it must have demonstrated its commitment to poverty reduction.
122WAThose countries that are not eligible for debt relief under the HIPC initiative can still approach the Paris Club (the unofficial grouping of major bilateral creditors) for relief. In December 1994, Paris Club creditors agreed to implement a new treatment, "Naples terms", on the debt of the poorest countries. Eligibility for the Naples terms is assessed on a case-by-case basis, taking into account the track record of the debtor country with the Paris Club and the IMF, and various criteria, including having a high level of indebtedness, being only eligible for IDA financing from the World Bank, and having a GDP-per-capita of 755 dollars or less. Creditors agreed in September 1999 that all Naples terms treatments would carry a 67 per cent. debt reduction.
On the basis of current debt ratios, none of the four countries named would be eligible for the HIPC initiative, but Haiti could potentially meet the Naples criteria. Cambodia received Naples terms relief in 1995 and its debt:export ratio is currently slightly higher than the 150 per cent. threshold. Around 80 per cent. of this debt is bilateral debt owed to Russia and the US. The latest available figures for Georgia suggest that their debt:export ratio is below 150 per cent. Haiti has a level of external debt significantly above 150 per cent. of exports, but would need to make significant progress in strengthening governance and institutions before it could qualify for debt relief. Finally, World Bank country data for Afghanistan give its debt:export ratio as significantly below 150 per cent.
The UK stands ready to provide generous debt reduction should these countries meet the relevant criteria and approach the Paris Club for debt relief.
§ Lord Hyltonasked Her Majesty's Government: Whether they will provide a table showing the external debts of heavily indebted poor countries in 1983 and in 2003 and indicating for each country (a) debts at beginning and end of the period; (b) amount of both principal and interest written off; (c) amount of current debt per head of population; (d) current average income per person; and (e) the amount of debt likely to be remitted in each country over the next two years, as a result of negotiations pending. [HL315]
§ Baroness AmosThe table below shows data for the 27 heavily indebted poor countries (HIPCs) that have qualified for debt relief under the enhanced HIPC initiative. These are the only HIPCs in which the IMF and World Bank have carried out debt sustainability analyses. Most of the HIPC countries that have still to qualify for the relief have yet to emerge from prolonged conflict and accurate figures are not available.
A meaningful comparison between debt levels in 1983 and 2003 is almost impossible, as the figures for these years have been calculated in different ways. Furthermore, figures for 1983 are based on 1983 prices and those for 2003 are based on 2003 prices.
128WAFigures for debt relief do not include additional bilateral assistance outside of the HIPC initiative, nor do they include any topping-up of debt relief that could potentially be provided. Total debt relief in 2003 will therefore be greater than that shown.
A breakdown of total HIPC relief is unavailable, so amounts of both principal and interest written off have not been included in the table. In addition, debt per head of population is not typically used to show a country's level of indebtedness. A more accurate
External Debts of Enhanced Heavily Indebted Poor Country (HIPC) Initiative Countries in 1983 and 2003 2003 Heavily Indebted Poor Country Total Nominal Debt in millions of US$1983¹ Before Debt Relief (NPV of total debt in millions of US$)³ Debt after unconditional delivery of enhanced HIPC assistance (NPV of total debt in millions of US$)4 Total debt relief delivered though traditional debt relief and HIPC (NPV in millions of US$)5 Debt per head of population on (in US$) GDP per capita 2002 (constant 1995 US$)² Benin 649.4 892.9 639.3 253.6 96.81 435 Bolivia 3,254.9 4,261.3 2,707 1,554.3 311.25 947 Burkina Faso 358.1 1,003.3 662.4 340.9 55.9 258 Cameroon 2,002.3 6,783 3,471 3,312 223.61 711 Chad 200.6 754.6 595.0 159.5 73.06 248 DRC 4,433.4 7,854.4 1,557.6 6,296.8 28.95 87 Ethiopia6 3,648.8 n/a n/a 1,275 n/a 124 Gambia 151.7 276.0 214.6 61.4 155.99 374 Ghana 1,221 3,974.6 2,154.3 1,820.3 107.33 432 Guinea 1,212 1,685.7 1,267.8 417.9 167.71 628 Guinea-Bissau 159.2 546 112 434 89.41 193 Guyana 751.8 1,091 663 458 858.84 938 Honduras 1,629.2 3,053.0 2,936.9 89.1 43.47 711 Madagascar 1,685.7 3,281.9 1,519.3 1,762.6 217 Malawi 702.3 1,530.0 918.0 612.0 85.45 162 Mali 898.8 1,570 1,103 467 97.21 313 Mauritania 1,105.8 1,552.6 795.9 356.7 281.43 513 Mozambique 421.7 2,940 1,093 1,847 59.28 229 Nicaragua 3,407 5,645.7 1,395.5 4,250.2 261.58 Data not available Niger 656.3 1,182.5 554.8 627.7 48.07 207 Rwanda 213.3 771.4 317.3 454.1 38.87 295 Sao Tome and Principe 42.8 203 33 170 213.99 347 Senegal 1,664.1 2,663 2,225.8 437.2 222.43 628 Sierra Leone 531.8 849.7 225.3 624.4 43.03 165 Tanzania 3,969 5,210.0 2,820.1 2,389.9 80.16 204 Uganada7 600.6 n/a n/a 1,003 n/a 367 Zambia 2,509.4 5,177.3 2,135.4 3,041.9 204.13 410 ¹Source:
World Development Bank, Global Development Finance Online. Figures show levels of public and publicly guaranteed debt.
²Source:
World Bank Group, World Development Indicators Online.
³ Source:
HIPC Decision Point Documents. Figures show Net Present Value of total debt in millions of US$.
4As above.
5Source:
HIPC Decision Point Documents. Figures show Net Present Value of total debt relief in millions of US$.
6Figures of total relief for Ethiopia are for HIPC relief only and do not include "traditional" debt relief. A reliable debt stock figure for 2003 is not available.
7 Figures of total relief for Uganda are for HIPC relief only and do not include "traditional" relief. A reliable debt stock figure for 2003 is not available.