Assessing Bolivia´s debt relief under the heavily, indebted poor countries initiative
This paper examines whether Bolivia has made enough progress in debt relief under the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative, thus taking a sustainable debt path and graduating from debt renegotiations definitely. We find that reaching the completion point at the Enhanced HIPC initiative was a major milestone to provide significant debt relief, far bigger than the one obtained under previous traditional debt renegotiation mechanisms. However, given exogenous-external and domestic-shocks, declining aid trends and optimistic macro-assumptions used in the Enhanced HIPC debt renegotiations, the probability of having Bolivia reversing to unsustainable debt ratios is high. Henceforth, there are four possible reasons for Bolivia to consider adopting further debt proposals. Achieving the Millennium Development Goals would require extra resources; unexpected shocks would justify the creation of a HIPC contingency fund for graduated countries, Bolivia debt sustainability targets might be lower than the standard ones defined by the Enhanced HIPC; and donors aid might be turning to be more selective, concentrated on good performers like Bolivia.
Volume (Year): 6-7 (2003)
Issue (Month): 2-1 (December)
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Cohen, Daniel, 2001.
"The HIPC Initiative: True and False Promises,"
Wiley Blackwell, vol. 4(3), pages 363-80, Winter.
- Christina Daseking & Robert Powell, 1999. "From Toronto Terms to the HIPC Initiative; A Brief History of Debt Relief for Low-Income Countries," IMF Working Papers 99/142, International Monetary Fund.
- Andersen, Lykke Eg & Nina, Osvaldo, 2000. "The HIPC Initiative In Bolivia," Documentos de trabajo 4/2000, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana.
- Juan Antonio Morales & Jeffrey D. Sachs, 1989. "Bolivia's Economic Crisis," NBER Chapters, in: Developing Country Debt and the World Economy, pages 57-80 National Bureau of Economic Research, Inc.
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