30 March 2006
On March 28 the World Bank's Board of Directors approved the details of the institution's participation in the Multilateral Debt Relief Initiative (MDRI). Scheduled to take effect beginning July 1, the MDRI will cancel the debts of 17 countries to the World Bank's International Development Association (IDA). The cancellations are expected to total more than $37 billion over the next 40 years.
On March 28 the World Bank's Board of Directors approved the details of the institution's participation in the Multilateral Debt Relief Initiative (MDRI). Scheduled to take effect beginning July 1, the MDRI will cancel the debts of 17 countries to the World Bank's International Development Association (IDA). The cancellations are expected to total more than $37 billion over the next 40 years.
The following countries are scheduled to receive debt relief: Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia. Eligibility is based on reaching "completion point" within the Heavily Indebted Poor Countries (HIPC) Initiative. To reach "completion point" a country must maintain a stable macroeconomic climate and implement key structural reforms in governance, education and health, as recommended by the World Bank.
The Multilateral Debt Relief Initiative was agreed upon by the G-8 (Group of 8) at the Gleneagles summit last year, and has been adopted by the IMF, the African Development Fund and the World Bank.
The total outstanding foreign debt owed by all developing nations is a staggering $2.6 trillion (in 2004). Current debt relief efforts are expected to dissolve $40-$60 billion of poor country debt.
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