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Heavily Indebted Poor Countries

Volume 409: debated on Friday 18 July 2003

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To ask the Minister of State, Department for International Development whether the Government support the use of Government revenues rather than exports to assess the sustainability of heavily indebted poor country debts. [126260]

In 1999, the UK Government led the way in securing the revision of the Heavily Indebted Poor Countries (HIPC) framework to ensure that it provides these countries with a permanent solution to their debt problem and frees up resources to tackle poverty. The merit of the new framework is that countries qualify for debt relief if their debts exceed either 150 per cent. of their annual export earnings or 250 per cent. of Government revenues, whichever gives the greater amount of debt relief. Relief is provided to bring each country's ratios down to these levels. The reduced debt sustainability ratios under this new framework have allowed more countries to benefit from the enhanced HIPC initiative, with deeper levels of debt relief.