SLIDE 21 21
21
World Health Organization
Debt relief: The crucial (and neglected) variable
50 East Asia & Pacific Europe, Central Asia Latin America, Caribbean Middle East, North Africa South Asia Sub-Saharan Africa
US $ billion
Development assistance Debt service
Source: Pettifor, A. & Greenhill, R. (2002)
Debt Service and ODA by Region, 2000
- Many governments are burdened by debt payments as can be seen in the green
bars stating a debt service from 12.6 bn US$ for SSA up to 144.3 bn US$ for Latin America % Caribbean.
- The pink bars show that development assistance is not able to make up for the
- utflows due to debt services and shows the relevance of debt relief for
reducing poverty and setting countries on a growth path
- The HIPC initiative is an important step toward debt relief. 13 countries have
reached their completion point under the HIPC Initiative and been granted US$ 26 billion in nominal debt service reduction over time.
- But the actual impact of debt relief on freeing resources for social spending
depends also on the share of total debt which is incurred from bi- and multi- lateral donors, since only this, not the share of private debts can be mitigated by multilateral and bi-lateral mechanisms of debt relief. Once debt is relieved, policies are needed to ensure that resources are channeled to social sectors. (HIPC countries are countries heavily indebted for most or all of the past decade, more than half of the population living on less than $1 a day and highly depending on development assistance.) (Sources: Pettifor, A. & Greenhill, R. (2002). Debt relief and the Millennium Development Goals, Background Paper for Human Development Report 2003. New York: Human Development Report Office, United Nations Human Development Programme, December)