Debt of the Poorest Countries: Anatomy of a Crisis Kept on Hold

This paper argues that the twin attributes of public ownership of the heavily indebted poor country (HIPC) debt, and the relative systemic irrelevance of these countries' economic performance led to an almost decade-long delay in the provision of substantial debt relief for these countries. Whi...

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Bibliographic Details
Published in:Revue canadienne d'études du développement 2001-01, Vol.22 (2), p.305-342
Main Author: Serieux, John E.
Format: Article
Language:English
Subjects:
Developing countries
Finance
Foreign debt
LDCs
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Summary:This paper argues that the twin attributes of public ownership of the heavily indebted poor country (HIPC) debt, and the relative systemic irrelevance of these countries' economic performance led to an almost decade-long delay in the provision of substantial debt relief for these countries. While private creditors were forced to come to terms with the middle-income country debt, public creditors could afford to sustain the fiction of a liquidity crisis much longer (implying little need for debt reduction). This delay was costly for these countries as they fell behind other countries of comparable income levels in both human and economic development terms. The paper also offers some estimates of the size of the debt overhang facing these countries, and hence potential bases for determining the adequacy of current debt-reduction efforts.
ISSN:0225-5189
2158-9100
DOI:10.1080/02255189.2001.9668818