To Forgive or Not to Forgive Essay -- essays papers

To Forgive or Not to Forgive Debt is a substantial problem facing many countries in the world today. Some of the more economically stable countries are able to pay off their debt through strategic budget planning. However, there are many countries that constantly struggle to solve their debt problems. In response of this issue, the IMF and the World Bank have designed a framework to provide special assistance for heavily indebted poor countries that pursue IMF and World Bank supported adjustment and reform programs. This framework has been called the Heavily Indebted Poor Countries Initiative; it is also known as the HIPC Initiative. In this paper, I will explain the advantages and disadvantages of the HIPC Initiative. My main objective will be to explain why I think it is an appropriate obligation for the IMF and World Bank to make. To do this, I will describe the initiatives of the World Bank and IMF along with the reasons for its creation, its successes and challenges, economic advantages and disadvantages of the debt relief program, and finally some biblical perspective on debt forgiveness. First, it is important to look at what the HIPC Initiative is. The HIPC Initiative is a comprehensive approach to debt reduction for poor countries that requires the participation of all creditors. Its goal is to ensure that no poor country faces a debt burden it cannot manage. Central to the HIPC Initiative is each country’s continued effort toward macroeconomic adjustment and structural and social policy reforms. In addition, the initiative focuses on ensuring additional finance for social sector programs, primarily basic health and education. Following a comprehensive review of the HIPC Initiative, a number of modifications were approved in September 1999 to provide faster, deeper and broader debt relief and strengthen the links between debt relief, poverty reduction and social policies. The Initiative is not a universal remedy. Even if all the external debts of these countries were forgiven, most would still depend on significant levels of concessional external assistance; their receipts of such assistance have been much larger than their debt-service payments for many years. So, why was the HIPC Initiative created? It has been well recognized that the external debt situation for a number of low-income countries, mostly in Africa, has become ex... ...tential to do a lot of good for the economy as a whole. I believe it will help not only developing nations but the developed nations as well. It also has the potential to help reduce poverty in the world as Delechat describes. Also, on a Biblical perspective, I believe it clearly states that we are to forgive the debts of our neighbors. Therefore, this is why I think the HIPC Initiative is an appropriate obligation for the IMF and World Bank to have. Bibliography: Works Cited Cheru, Fantu. (January, 2001). The Highly Indebted Poor Countries (HIPC) Initiative: a human rights assessment of the Poverty Reduction Strategy Papers (PRSP). HIPC: well intentioned but flawed? (2001, October 15). Delechat, C. (2001). 100 Percent Debt Cancellation? A Response from the IMF and the World Bank. (2001, October 15). The Holy Bible – New International Version. Exodus 22: 25-27. Deuteronomy 15:1-11. Leviticus 25: 1-43. (2000, October 12). Forgiving Their Debtors. Wall Street Journal, p. A26. (2000, November 29). The Impact of Debt Reduction under the HIPC Initiative on External Debt Service and Social Expenditures. International Monetary Fund. (2001, October 15).