Reality check on debt

18 June 2001

A new report from Drop the Debt argues that the World Bank and IMF can afford to cancel in full the debts of the poorest countries without putting at risk their finances. A World Bank and IMF report released just prior to the Spring Meetings agrees that debt sustainability is not guaranteed by the HIPC initiative because export and growth projections are likely to be too optimistic and new borrowing, including to fight HIV/AIDS, is likely to push debt burdens up quickly. However, Bank President James Wolfensohn argued that giving more debt relief would take resources away from other equally needy countries.

Reality Check