Initiative heavily in debt poor countries
The initiative heavily in debt poor countries ( PPTE , HIPC Heavily Indebted Poor Countries in English), is an initiative which aims at assisting the countries poorest of the world while making their debts international “bearable”.
This program was launched by the joint action of the Fonds international currency (the IMF) and of the the World Bank in 1996. It underwent a revision and a reform in 1999 (reinforced Initiative PPTE). The reduction of the debt is normally function of the efforts in the fight against the poverty of the countries concerned.
Program PPTE relates to 42 countries in September 2006, of which the three quarters are located in sub-Saharan Africa (40 countries at the end of August 2006).
Criteria of eligibility
So that a country is eligible on the initiative PPTE and reinforced PPTE, it must respect four criteria:-
to be eligible only with one concessional assistance on behalf of the IMF and of the World Bank (" Ida-only"),
- to face a level of insupportable debt,
- to have implemented perfectly reforms and healthy economic policies within the framework of programs supported by the IMF and the World Bank.
- to have formulated a Document of strategy for the reduction of poverty (DSRP).
Beginning of application of the program
The 24 and September 25th 2005, 184 Member States of the World Bank were found in Washington for their annual meeting. At the end of this meeting, the president of this institution, Paul Wolfowitz, announced that the proposal of the group of the 8 (G8) aiming at cancelling the debt of the poorest countries was approved.
18 countries will be first of all concerned for a debt evaluated to 40 billion dollars; 20 other States representing a debt of 17 billion should profit from it if they are committed answering all the conditions of the PPTE (called points of completion).
The released sums will have to be devoted to health, the education and the reduction of poverty. 70% of these sums are due to the World Bank and the remainder to the IMF and African Banque of development (BAD).
The debt of these 38 countries amounts with nearly 57 billion dollars.
The total costs in September 2006 of the assistance brought to the 29 countries which reached the point of decision and with the 13 country which can be allowed to profit from a lightening of debt to the title of the initiative reinforced in favor of the heavily in debt poor countries are estimated at approximately 64 billion dollars (in clear value brought up to date at the end of 2005).
List countries concerned at the end of August 2006
List countries whose files are regulated
Country in temporary phase (between the points of decision and completion)
Country not having reached the point of decision
Country having left this program
July 7th, 2007, the Guyana was declared like not being more a poor country heavily in debt .
Limits of this program
This program, for some, answers a against-productive logic bus, so that a country belongs to the program, it is necessary that it is listed among the most involved in debt countries, which has as a consequence that the providing countries of main efforts to erase their debts are isolated program, whereas the countries laxists economically can belong to the program.It is necessary moreover mention that the " healthy policies économiques" whose implementation conditions the eligibility of the country considered with the program are determined by the IMF and the World Bank, and are thus the heiresses - although they are not called thus any more - " Programs of adjustment structurel" years 1980 and 1990 of inspiration free-trader: restriction of the interventions of the State in the economy, liberalizations, privatizations, fiscal policies and monetarists restricted… (see " Consensus of Washington " for more details). For example, in 1998, the eligibility of the Coast-Ivory to program PPTE was conditioned by complete liberalization of the sector of the Café for the harvest year 1998-99. However, and it is an important limit, the governments of the slightly industrialized countries - the situation is different for more industrialized economies - do not manage to recover by other taxes the entirety of the loss of revenue caused by the fall or the consecutive suppression of the customs duties to a liberalization of the trade (30 hundreds at the most of covering per dollar of loss). The consequence of the implementation of these policies, for the very poor countries is thus concerned with program PPTE, a dry loss budgetary for the State, which can be likely to still more worsen the budgetary problems structural of this one whereas the program was supposed to come to him to assistance.
The cumulated debt of the countries of program PPTE accounts for only 10% of the debt of the Developing country and 80% of the poor population live in twelve countries (India, China, Brésil, Nigeria, Indonesia, Filipino, Ethiopia, Pakistan, Mexico, Kenya, Peru and Nepal) and only the Ethiopia and the Kenya belongs to the program (to be noted that the quoted States, of which a part belong to the economic great powers, did not ask to take part in this program).
Thus, the Uganda was the first to have concluded the initiative its at the beginning of 2001. Whereas the Sudan currently does not form part of the program.