The HIPC Initiative: An Evaluation Update Saturday, April 22, 2006 / 12:30 – 2:00 pm MEETING SUMMARY
The purpose of this session was to discuss the progress made toward achieving the objectives of the Enhanced HIPC initiative. The panel members referred to the findings of an evaluation report undertakend by the World Bank's Independent Evaluation Group (IEG) titled "Debt Relief for the Poorest: An Evaluation Update of the HIPC Initiative." The session was sponsored by the IEG, and the panel was composed of Victoria Elliot and Shonar Lala (IEG) and Henry Northover (Water Aid). Some 20 participants participated in the session. The IEG representatives began by presenting the findings of the study via a power point presentation. The study, which examined the impact of debt relief in 18 countries, found that there was an increase in social spending in many of the HIPC countries. On the other hand, this increase in social spending only led to modest increases in efforts of achieving the eight Millennium Development Goals. Further, the debt reduction provided did not change the underlying nature of these weak economies, and this coupled with the lack of adequate growth has not improved the overall outlook of debt sustainability for most of the HIPC countries.  While recognizing that the HIPC initiative did indeed achieve debt relief, many CSOs are concerned with the fact that several of the HIPC countries are already beginning to start borrowing new, seemingly unsustainable debt. Further, it seems that the overall goals of the HIPC program changed from promoting sustainable debt worthiness, to simply allocating freed-up resources for social services. CSOs have generally not participated in the decision-making process of allocating resources freed up by HIPC. For this reason, the Bank should play a more active role in supporting the efforts of civil society to promote domestic accountability through media, parliamentarians, and CSOs. During the question and answer period, there was an in-depth discussion of the HIPC study findings and relations to the Multinational Debt Refief Initiative (MDRI) initiative. While a Bank representative present clarified that there is almost complete overlap between the HIPC and MDRI programs and the latter begins with the latter ends, several CSOs asked how the results of the HIPC country will be incorporated into the MDRI eligibility criteria. Several CSOs commented that the HIPC countries have not achieved the expected levels of debt sustainability and are still quite vulnerable to external shocks and becoming overly indebted again.  Bolivia was provided as an example of a country which, despite HIPC-generated debt relief, poverty indicators are worse today than before the debt relief was granted. Another participant inquired whether the HIPC study focused on impact of conditionality on debt management efforts and if debt relief can be indexed to the goals of achieving the MDGs. On the issue of conditionality, the study author confirmed that it did not analyze the impact of Bank condionalities on debt management. Regarding the relations between debt and MDGs, the Bank representative agreed that while it would be good to link these two variables, it would be difficult to carry out as the data is still quite spotty and inconsistent at the country level. When several participants suggested that the Bank provide support for HIPC countries to increase their capacity to manage future debt, the Bank informed that funding for this program had been reduced recently due to budget cuts, but that the Bank continued to work with governments to strengthen their debt management capacity. List of participants in the discussion Photos from the session More Information:
2006 Spring Meetings Civil Society Dialogues Program - main page
2006 Spring Meetings - general information for CSOs |
RSS