Publication

This paper assesses the achievements of debt-relief initiatives for heavily indebted poor countries (HIPCs) and discusses the perspectives of future debt sustainability. It finds that as a result of efforts such as the Multilateral Debt Relief Initiative, debt ratios have declined in HIPCs and are much lower than in advanced countries. However, the authors warn that debt ratios may rise in these countries in the future and identify four elements of the changing landscape of development finance that may pose a threat for debt sustainability. They conclude by reflecting on possible future scenarios and the options available to borrowing countries and the international community.