USCCB - (SDWP) - Fact Sheet: Debt Relief and HIPC

23 countries approved as of June 2001 to receive substantial debt relief, freein gup resources for investment in heath, education, and other poverty reduction programs.
U.S. share of Cologne commitment for FY 2002 is $240 million.
Average debt service as a percentage of government revenues drops from 27% to 13% in 2001-03 and 9% in 2005.
But, some countries still pay a high percentage of revenues in debt service even after HIPC:
- Zambia, Niger, Nicaragua: above 20% for 2001-03
- Guinea: 18% for 2001-03
- 12 of the 22 countries will pay more than 10% in 2005.
Where diseases such as HIV/AIDS have reached crisis proportions, there is a desperate need to maximize resources available for health systems, infrastructure and treatment.

Appropriations Request:

Appropriate $224 million (plus $16 million carryover funds) for FY 2002.
Add language to the Foreign Operations Appropriations bill instructing the Secretary of the Treasury to commence efforts immediately with the Paris Club of Official Creditors, the World Bank, the International Monetary Fund, and other multilateral creditors, to adjust the debt reduction formula under enhanced HIPC to limit for at least the first 3 years the debt service of any country receiving debt reduction:
- to no more than 10% of government revenues
- to no more than 5% of government revenues if the country is suffering a severe health crises, such as a high rate of adult infection of HIV/AIDS.
The additional cost could possibly be accommodated for FY 2002 without any increase in the U.S. commitment of $240 million.