World Bank Group and IMF Statement on Kyrgyz Government Decision on Debt Relief Initiatives

Contacts:
In Bishkek: Jyldyz Djakypova, +996 312 610-650
Email: Jdjakypova@worldbank.org 
In Washington: Vesna Kostic, +1 202 473 9277 
Email: Vkostic@worldbank.org

Bishkek, February 7, 2007—The Kyrgyz government is debating whether the country should participate in the debt reduction initiatives of the International Monetary Fund (IMF) and World Bank¹,  which aim to bring countries to a sustainable level of debt in order to promote economic development. 

The World Bank and IMF wish to underscore that participation in these initiatives by the Kyrgyz Republic is entirely voluntary and that the decision is fully in the country’s hands. None of the creditors, including the IMF and World Bank, gain financial benefits from writing off the debts of countries participating in the debt reduction initiatives.

Staffs of both institutions have worked closely with the government, and accepted its economic development proposals as a basis for debt relief under the HIPC and MDRI initiatives. The debt relief provided by these initiatives would total close to $1 billion in debt service, including almost $40 million annually over the next 15 years that is currently owed to the Bank, the IMF and several other multilateral and bilateral creditors.

To benefit from this debt relief, the Government is expected to implement its economic reform program as outlined in its Country Development Strategy, which aims to promote economic growth, transparent management of resources, and reductions in corruption. The money freed up by this debt relief would support the government’s economic development priorities, including rehabilitation of infrastructure and improvements in the quality and availability of health, education and other social services. 

The Bank and Fund are ready to propose the Kyrgyz Republic’s participation in the debt relief initiatives to their Boards of Directors if the new cabinet re-affirms its commitment to the government’s reform program and its desire to seek debt relief through the HIPC and MDRI initiatives.  In any case, the Bank and Fund stand ready to continue supporting the Kyrgyz Republic in its development efforts regardless of the government’s decision on participation in these debt relief initiatives.

-- ### --

^{___________________________________} 

¹ The debt relief initiatives are the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Reduction Initiative.