Editing Debt of developing countries (section)

==Recent debt relief==
37 impoverished countries have recently received partial or full cancellation of loans from foreign governments and international financial institutions, such as the IMF and World Bank under the Heavily Indebted Poor Countries (HIPC) Initiative, see table below. A further two countries, Eritrea and Sudan, are in the process towards full debt relief; Zimbabwe has unsustainable debt but has not made the reforms necessary to participate in the program.<ref name=imffactsheet>{{cite web|title=Debt Relief Under the Heavily Indebted Poor Countries (HIPC) Initiative|url=https://www.imf.org/external/np/exr/facts/hipc.htm|website=International Monetary Fund|access-date=29 May 2021|date=March 23, 2021}}</ref><ref>{{cite web|url=https://documents1.worldbank.org/curated/en/419661565316083523/pdf/Heavily-Indebted-Poor-Countries-HIPC-Initiative-and-Multilateral-Debt-Relief-Initiative-MDRI-Statistical-Update.pdf|title=Heavily Indebted Poor Countries (HIPC) Initiative and Multilateral Debt Relief Initiative (MDRI), Statistical Update|date=July 26, 2019|access-date=July 26, 2019|publisher=World Bank}}</ref>

Under the [[Jubilee 2000]] banner, a coalition of groups joined together to demand debt cancellation at the [[G7]] meeting in Cologne, [[Germany]]. As a result, finance ministers of the world's wealthiest nations agreed to debt relief on loans owed by qualifying countries.<ref>{{Cite web |url=http://www.jubileeresearch.org/jubilee2000 |title=jubileeresearch.org |access-date=28 July 2006 |archive-url=https://web.archive.org/web/20060907122024/http://www.jubileeresearch.org/jubilee2000/ |archive-date=7 September 2006 |url-status=dead }}</ref>

A 2004 World Bank/IMF study found that in countries receiving debt relief, poverty reduction initiatives doubled between 1999 and 2004. [[Tanzania]] used savings to eliminate school fees, hire more teachers, and build more schools. [[Burkina Faso]] drastically reduced the cost of life-saving drugs and increased access to clean water. [[Uganda]] more than doubled school enrollment.<ref>{{Cite web |url=http://www.jubileeusa.org/jubilee.cgi?path=%2Flearn_more&page=debt_relief_works.html |title=jubileeusa.org |access-date=21 July 2019 |archive-url=https://web.archive.org/web/20061009111112/http://www.jubileeusa.org/jubilee.cgi?path=%2Flearn_more&page=debt_relief_works.html |archive-date=9 October 2006 |url-status=dead }}</ref>

In 2005, the [[Make Poverty History]] campaign, mounted in the run-up to the [[G8 Summit]] in Scotland, brought the issue of debt once again to the attention of the media and world leaders. Some have claimed that it was the [[Live 8]] concerts which were instrumental in raising the profile of the debt issue at the G8, but these were announced after the Summit pre-negotiations had essentially agreed the terms of the debt announcement made at the Summit, and so can only have been of [[marginal utility]].  Make Poverty History, in contrast, had been running for five months prior to the Live 8 announcement and, in form of the [[Jubilee 2000]] campaign (of which Make Poverty History was essentially a re-branding) for ten years. Debt cancellation for the 18 countries qualifying under this new initiative has also brought impressive results on paper. For example, it has been reported that Zambia used savings to significantly increase its investment in health, education, and rural infrastructure. The [[fungibility]] of savings from debt service makes such claims difficult to establish. Under the terms of the G8 debt proposal, the funding sources available to [[Heavily indebted poor countries|Heavily Indebted Poor Countries]] (HIPC) are also curtailed; some researchers have argued that the net financial benefit of the G8 proposals is negligible, even though on paper the debt burden seems temporarily alleviated.<ref>{{Cite web |url=http://www.undp-povertycentre.org/pub/IPCCountryStudy005.pdf |title=undp-povertycentre.org |access-date=24 March 2008 |archive-url=https://web.archive.org/web/20070722053848/http://www.undp-povertycentre.org/pub/IPCCountryStudy005.pdf |archive-date=22 July 2007 |url-status=dead }}</ref>

The 2005 HIPC agreement did not wipe all debt from HIPC countries, as is stated in the article. The total debt has been reduced by two-thirds, so that their debt service obligations fall to less than 2 million<!--2 million WHAT?--> in one year.
While celebrating the successes of these individual countries, debt campaigners continue to advocate for the extension of the benefits of debt cancellation to all countries that require cancellation to meet basic human needs and as a matter of justice.

To assist in the reinvestment of released capital, most [[international financial institutions]] provide guidelines indicating probable shocks, programs to reduce a country's vulnerability through export diversification, food buffer stocks, enhanced climate prediction methods, more flexible and reliable aid disbursement mechanisms by donors, and much higher and more rapid contingency financing. Sometimes outside experts are brought to control the country's financial institutions.

=== List of heavily indebted poor countries ===
{| class="wikitable" 
|-
! colspan="5"| 36 post-completion-point HIPC<ref name="imffactsheet" />
|-
| Afghanistan ||  Comoros || Guinea || Malawi ||  São Tomé and Príncipe
|-
| Benin ||  DR Congo || Guinea-Bissau || Mali ||  Senegal
|-
| Bolivia ||  Rep. of Congo || Guyana || Mauritania || Sierra Leone
|-
| Burkina Faso || Côte d'Ivoire || Haiti || Mozambique || Tanzania
|-
| Burundi ||  Ethiopia || Honduras || Nicaragua || Togo
|-
| Cameroon ||  The Gambia || Liberia || Niger ||  Uganda
|-
| Central African Republic || Ghana || Madagascar || Rwanda || Zambia 
|-
| Chad || colspan="4" |    
|-
! colspan="5"| 2 post-decision-point HIPC<ref name="imffactsheet" />
|-
| Eritrea || Sudan || colspan="3" |  
|}

===2004 Indian Ocean earthquake===
When the [[2004 Indian Ocean earthquake]] and tsunami hit, the [[G7]] announced a moratorium on debts of twelve affected nations and the [[Paris Club]] suspended loan payments of three more.<ref>[https://www.theguardian.com/tsunami/story/0,15671,1385701,00.html guardian.co.uk]</ref> By the time the Paris Club met in January 2005, its 19 member-countries had pledged $3.4 billion in aid to the countries affected by the tsunami.

The debt relief for tsunami-affected nations was not universal. Sri Lanka was left with a debt of more than $8 billion and an annual debt service bill of $493 million. Indonesia retained a foreign debt of more than $132 billion<ref>{{Cite web|url=http://www.jubileeusa.org/take_action/Indonesiaodious.pdf |title=Odious Debt Case Studies Series |website=Jubilee USA Network |url-status=dead |archive-url=https://web.archive.org/web/20051222073720/http://www.jubileeusa.org/take_action/Indonesiaodious.pdf |archive-date=22 December 2005 }}</ref> and debt service payments to the World Bank amounted to $1.9 billion in 2006. In 2015 the total debt of Sri Lanka is $55 billion.<ref>{{Cite news|url=https://economictimes.indiatimes.com/news/international/world-news/new-chinese-loan-may-further-plunge-sri-lanka-into-debt-trap/articleshow/65659719.cms|title=New Chinese loan may further plunge Sri Lanka into debt trap|last=Chaudhury|first=Dipanjan Roy|date=2018-09-03|work=The Economic Times|access-date=2019-12-09}}</ref> Some of this is due to borrowing to help with infrastructure and some of it is due to corruption. The last time they sought help from the IMF was 2009, they received a $2.6 billion loan. They have yet to recover from the tsunami.<ref>{{cite news|last1=Sirimanne|first1=Asantha|last2=Ondaatjie|first2=Anusha|title=Sri Lanka Looks to IMF for Help as Debt Burden Climbs|url=https://www.bloomberg.com/news/articles/2015-01-20/sri-lanka-looks-to-imf-for-help-as-debt-burden-climbs|access-date=6 April 2015|agency=Bloomberg News}}</ref>

===G8 Summit 2005: aid to Africa and debt cancellation===
The traditional meeting of G8 finance ministers before the summit took place in [[London]] on 10 and 11 June 2005, hosted by then-[[Chancellor of the Exchequer|Chancellor]] [[Gordon Brown]]. On 11 June, agreement was reached to write off the entire [[US dollar|US$]]40 billion debt owed by 18 [[Heavily Indebted Poor Countries]] (HIPC) to the [[World Bank]], the [[International Monetary Fund]] and the [[African Development Bank#Group entities|African Development Fund]]. The annual saving in debt payments amounts to just over US$1 billion. [[War on Want]] estimates that US$45.7 billion would be required for 62 countries to meet the [[Millennium Development Goals]]. The ministers stated that twenty more countries, with an additional US$15 billion in debt, would be eligible for [[debt relief]] if they met targets on fighting [[political corruption|corruption]] and continue to fulfill [[structural adjustment]] [[conditionalities]] that eliminate impediments to [[investment]] and calls for countries to privatize industries, liberalize their economies, eliminate subsidies, and reduce budgetary expenditures. The agreement came into force in July 2006 and has been called the "Multilateral Debt Reduction Initiative", MDRI.  It can be thought of as an extension of the HIPC initiative. This decision was heavily influenced and applauded by international development organizations like [[Jubilee 2000]] and the [[ONE Campaign]].

Opponents of debt cancellation suggested that [[structural adjustment]] policies should be continued. Structural adjustments had been criticized for years for devastating poor countries.<ref>{{cite web| title=Structural Adjustment—a Major Cause of Poverty.| publisher=Global Issues| first=Anup| last=Shah|date=July 2007| url=http://www.globalissues.org/TradeRelated/SAP.asp| access-date=2007-08-13}}</ref> For example, in Zambia, structural adjustment reforms of the 1980s and early 1990s included massive cuts to health and education budgets, the introduction of user fees for many basic health services and for primary education, and the cutting of crucial programs such as child immunization initiatives.

====Criticism of G8 debt exceptions====
Countries that qualify for the HIPC process will only have debts to the World Bank, IMF and African Development Bank canceled. Criticism was raised over the exceptions to this agreement as Asian countries will still have to repay debt to the Asian Development Bank and Latin American countries will still have to repay debt to the [[Inter-American Development Bank]]. Between 2006 and 2010 this amounts to US$1.4 billion for the qualifying Latin American countries of Bolivia, Guyana, Honduras and Nicaragua.<ref>{{Cite web |url=http://www.jubileeusa.org/take_action/idbdebt06.pdf |title=Latin America's Debt and the Inter-American Development Bank |publisher=Jubilee USA Network |date=2006 |url-status=dead |archive-url=https://web.archive.org/web/20061110101152/http://www.jubileeusa.org/take_action/idbdebt06.pdf |archive-date=10 November 2006 }}</ref>
=== Getting Africa out of the debt spiral ===
African leaders, finance ministers, and experts are meeting in Lomé, Togo, on May 14, 2025. Their final declarations call for structural reforms, particularly those of national institutions, which must be led by African countries. Effectively combat illicit financial flows, with losses estimated at nearly $90 billion per year, and greater international cooperation.<ref>{{cite web|access-date=2025-05-15 |date=2025-05-15 |language=fr |title=Comment les économies africaines peuvent sortir du «piège» de la dette |url=https://www.rfi.fr/fr/afrique/20250515-comment-les-%C3%A9conomies-africaines-peuvent-sortir-du-pi%C3%A8ge-de-la-dette |website=rfi.fr}}<!-- auto-translated from French by Module:CS1 translator --></ref>