Debt Relief Government Programs Hipc
The International Monetary Fund and World Bank have maintained since 1996 a program for highly indebted poor countries that gives low-interest loans to countries with preventive measures levels of external debt. To be eligible for the program, a country must be in an untenable foreign debt and have an established history of poverty reform. Since 2009, the program recognizes 41 countries as "potentially eligible" based on their debt situation.
Of these, 23 are at the completion point: Benin, Bolivia, Burkina Faso, Cameroon, Ethiopia, Gambia, Ghana, Guyana, Honduras, Madagascar, Malawi, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Sao Tome and Principe, Senegal, Sierra Leone, Tanzania, Uganda and Zambia. Eleven of them are the point of decision: Afghanistan Burundi, Central African Republic, Chad, Democratic Republic of the Congo, Republic of the Congo, Guinea, Guinea-Bissau, Haiti, Liberia and Togo. Seven are pre-decision point: the Comoros, Eritrea, Ivory Coast, the Kyrgyz Republic, Nepal, Somalia and Sudan. These "points" refer to the stages the program is through a country.
point Predecision countries are not yet ready to enter the program, but have the potential to become eligible if you start a system of legal, economic and financial reforms. Decision point countries receiving Debt Relief funding in the exercise of these reforms, they have to do a satisfactory manner, maintaining economic stability in order to reach the completion point, which benefits about to expand to countries to be permanent. The program has been criticized as too arbitrary to adopt a definition of "unsustainable", at baseline, defined as debt that exceeded 200 percent the amount of exports in the country for 280 percent of government revenue (later changed to 150 percent and 250 percent, respectively).
Originally conceived as a six-year program in two phases three years, it quickly became clear that not enough time had been allocated to these countries back on track. The expectations of the international agencies may have been too heavily on the experiences of personnel managers, as citizens more rich, healthy nations. Impoverished countries, as poor people, not readily spring back debt, especially when conditions requiring debt persists. Furthermore, although low-interest loans may continue to contribute to "poverty trap." As discussed in detail by Columbia University economist Jeffrey Sachs, the poverty trap occurs when an entity reaches a certain level of poverty in which sustainable economic growth is impossible.
Although potentially real people, is particularly useful to describe the condition of impoverished countries significantly in Sustainable economic growth is impossible both within the country remain poor, the poor, because there are no programs to improve their position in a meaningful way or programs are too corrupt or inefficient, and the country as a whole. These countries are unable to effectively provide healthcare, education or services basic social and typically are not favorable economies to foreign investment.
Because the population is growing so rapidly, a country that is impoverishing experience a decline in per capita resources in each successive generation, debt relief and foreign aid that is insufficient to counter this situation has little long-term effect on poverty of a country and the foreign debt and lack of apparent improvement resulting from such aid may discourage organizations of the extension of extra help because they may feel they are throwing money into a well. While charities but says that "every little bit help, "at the macroeconomic level, countries in need of assistance who receive only" some "have simply extended their poverty rather than repaired.
Citizens of rich countries tend to be intuitively aware of this, in part due to the poor of their own countries have access to significant resources more and more opportunities for economic mobility. Sachs solution to this is that foreign aid is spent on specific insurance, focusing on sustainability, the forms: in the education of public health and nutrition, infrastructure (sanitation, water and electricity, roads), and "institutional capital" (To fight corruption in government, judicial system and law enforcement authorities). The Initiative program recognizes that sustainability can not guarantee and avoid the trap of poverty, and it puts the burden of the countries the program serves.
Francesco Zinzaro.
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