Development financing

Pressing ahead on debt relief

A farmer cleans rice in the southern Philippines. Copyright: Manoocher Deghati/IRIN

Background: Debt holds back development

Over-indebtedness can become an obstacle to development if it restricts the scope for reducing poverty. If the debt burden is so large that even with above-average economic growth the country is barely able to meet its interest and redemption payments, then there is no money left for urgently needed in the provision of basic services and infrastructure, that is, in schools, hospitals, sanitation and power supplies. It is the poorest of the poor who are hardest hit. more

Debt relief creates new opportunities

Since the mid-fifties, under agreements forged by the Paris Club (of major creditor countries), the industrial countries have put together a series of rescheduling – and later debt relief – arrangements for heavily indebted poor countries (HIPC). The aim was to reduce these countries' debt burden to a sustainable level. With the HIPC Initiative and the Multilateral Debt Relief Initiative highly indebted countries can, for the first time, also be relieved of a large part of their debt vis-à-vis multilateral institutions. more

Further information

Here you will find a selection of documents and websites offering further information on the subject of debt relief. more

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