Debt Relief

Paper Summary:

The paper describes how for the last two decades, there have been efforts to lighten the debt burden of heavily indebted poor countries, (HIPC). The most recently enhanced HIPC initiative is believed to provide faster and deeper debt relief to these countries while encouraging them to use the funds saved to fight poverty and raise living standards. The paper discusses how the best way to lift the poor population in low-income countries out of poverty is to strengthen their economic growth. The paper concludes that these poor countries would realize greater benefit from receiving foreign aid than they would from debt forgiveness.

From the Paper:

"By resolving the poor countries' debt crisis through these various initiatives, governments in wealthy countries have implicitly acknowledged a significant transfer of resources they have provided in the past to some of the poorest countries (Powell 2000). Exports of creditor countries were supplied but not ultimately paid for, and while there are strong arguments for transfers of resources to low-income countries, it is doubtful that this was the most effective means of providing them, since resources were directed at neither the most efficient projects nor the poorest people (Powell 2000)."

Sample of Sources Used:

• Hjertholm, Peter. (2003 August 01). Theoretical and empirical foundations of HIPC debt sustainability targets.(Heavily Indebted Poor Country). Journal of Development Studies. Retrieved March 07 2006 from HighBeam Research Library Web site.
• Ndijumana, Leonce. (2001 December 01). Is Africa a net creditor? New estimates of capital flight from severely indebted Sub-Saharan African countries, 1970-96. Journal of Development Studies. Retrieved March 07 2006 from HighBeam Research Library Web site.
• Powell, Robert. (2000 December 01). Debt Relief for Poor Countries.Finance & Development. Retrieved March 07 2006 from HighBeam Research Library Web site.
• Problems facing the heavily indebted poor countries. (1996 October 01). World Economic Outlook. Retrieved March 07 2006 from HighBeam Research Library Web site.
• Rajan, Raghuram. (2005 December 01). Aid and growth: the policy challenge: we need more than aid to break the cycle of poverty. Finance & Development. Retrieved March 07 2006 from HighBeam Research Library Web site.

More papers on Debt Relief:

• Research Paper # 91331 : "Domestic Implications of Debt Relief"
• Persuasive Essay # 116369 : "Why Debt Relief Has Failed"
• Term Paper # 91576 : "Debt Relief: Helping or Hindering?"

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