Debt Relief: A Review of the HIPC Initiative

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The Heavily In-debt Poor Countries (HIPC) initiative was created in 1996 by the wealthy nations through the combined efforts of the IMF and World Bank. This initiative actively seeks the abatement of outside debt through depreciation by official donors. It was made to help the poorest of nations though some criticize it is only offering aid to rich countries with decline in aid to truly needy ones. The IMF or International Monetary Fund was set up as a last resort means of aiding struggling countries. "The International Monetary Fund, based in Washington, D.C., is the global economy's lender of last resort to countries in crisis. " (The New York Times 2012). These two oganizations, one created by the other, can produce a lot of good in terms of providing financial stability through working together for a common goal. There is a need for organizations like HIPC and IMF to work together because they in tangent can develop better methods of allocating money to poor countries by operating and communicating in a cohesive manner that makes public the amount of money forgiven and the reasons behind the debt reduction. Since the HIPC has so many strict guidelines to reduce, not eliminate debt from poor countries, the combined efforts of the IMF could alleviate the debt crisis in these select countires through a simpler and faster means than only going through one organization. IMF has been around for longer and has the capacity to raise funds, but doesn't speficially help
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