The HIPC Initiative and poverty reduction

The original HIPC Initiative (debt relief initiative for Heavily Indebted Poor Countries) was launched at the end of 1996 by the Bretton Woods Institutions (BWIs) and the Paris Club, which groups bilateral public creditors (Boote and Thugge 1997; Andrews et al. 1999). It aimed at making the debts of low-income countries sustainable. No explicit link was made between debt relief and poverty reduction. Its highly complex mechanisms sought to promote good utilisation of resources released by debt relief. Implicit in ‘good utilisation’ was the continuation of structural adjustment programmes established in conjunction with the BWIs (Moisseron and Raffinot 1999).