These country data sheets have been produced in order to provide a quick overview of the countries’ status with regard to the HIPC Initiative and MDRI and to provide key points of interest on the released amounts, their utilization and management and the additionality of debt relief to other forms of foreign assistance.
The lines below give some guidance and information about how to read and interpret the data displayed in these sheets.
Guidance and information on data and indicators displayed in the fact sheets
Each data sheet is composed by seven main sections:
1. Qualification dates
Pre-Decision Point: Countries who satisfy the established income and indebtedness criteria based on end-2004 data become potentially eligible for debt relief under the HIPC Initiative. No debt relief is delivered yet.
Decision Point: Countries reach the Decision Point under the HIPC Initiative when they have shown a satisfactory track record of macroeconomic policy performance and reform under an IMF-or IDA-supported program; defined an overall poverty reduction strategy through a participatory process and started to implement it; and when they have cleared outstanding arrears to multilateral creditors. A number of triggers are defined upon which the country would then reach the completion point. As of the decision point, the country starts receiving interim relief on part of the debt service falling due.
The duration of the interim period is country specific and depends on its capacity to implement the required reforms and to maintain macroeconomic stability.
Completion Point: Reaching the completion point means that a country graduates from the enhanced HIPC Initiative and is expected to receive irrevocable debt relief from all participating creditors in the amounts committed at decision point. Completion point countries are automatically eligible for MDRI assistance without further conditionality.
2. Health related completion point triggers
In order to pass from decision to completion point, the country needs to satisfy a set of general requirements, i.e. a) to maintain a track record of satisfactorily performance under an IDA-and IMF-supported program, and b) to adopt and implement the Poverty Reduction Strategy Paper (PRSP) for at least one year.
In addition, the country has to agree on a certain number of so called “completion point triggers”, i.e. structural reform and policy requirements which must be satisfied in order to reach the completion point. In almost all countries, at least some of these triggers seek an improvement in the health sector.
This section describes the specific health related completion point triggers and the country’s progress in implementing them.
3. Amounts of debt relief
This section indicates the total amount of promised assistance under the original and enhanced HIPC Initiative and the MDRI. This is the cumulative amount of debt relief provided by all creditors over several years (up to 40 years in the case of IDA and AfDB assistance). Where figures are available, the amounts are expressed both in nominal terms and in net present value terms (NPV). The charts display the share of assistance contributed by each creditor group.
4. Management of debt relief resources
Countries have chosen very different systems to manage and account for the savings resulting from debt relief. Three main approaches can be distinguished: 1) Comprehensive Expenditure Tracking; 2) Virtual Fund Approach, and 3) Separate Institutional Fund Mechanisms.
This section attempts to classify the country according to the typology described above.
5. Use of debt relief resources
Recipient countries are expected to use the debt service savings provided under the enhanced HIPC Initiative and the MDRI to scale up public spending in line with their national PRSPs. However, some countries do not distinguish (or tag) debt relief funds from other revenue sources of the budget which leads to complete fungibility of such funds. Tracking the specific use of savings from debt relief is not possible in such a setting.
Where data exists, this section provides summary information on the use of debt relief funds in the health sector and for the immunization programme.
In the context of international debt relief initiatives, donors have pledged that the amounts they provide in form of debt relief would not compromise the volumes of resources provided through other forms of official development assistance (ODA). The commitment of additionality is crucial since in its absence there would be no net benefits in terms of increased fiscal space for public spending in beneficiary countries. However, measuring the real additionality of debt relief funds is difficult. It requires an assumption about the counterfactual, i.e. what would have happened to the volumes of traditional bilateral and multilateral ODA in the absence of any debt relief.
This section displays reported multilateral and bilateral ODA disbursements excluding the granted debt relief in the period 1990 to 2006. The additional red line indicates the amount of reported net debt relief granted to the country in question. This representation allows comparing the levels of debt relief with levels and trends of ordinary ODA before and after the decision/completion points. All data have been taken from the OECD-DAC aid statistics database.
7. Potential policy implications for health officials
Whether or not health officials can advocate directly for resources released by debt relief initiatives intimately depends on the country’s management system in place (see point 4).
This section provides some indications and suggestions regarding the appropriate advocacy strategy in the particular country context.