Should Debt in the Developing World be Cancelled?
Wealthy countries and international financial institutions have taken action to relieve debt burdens in many of the world’s poorest countries through the ‘Heavily Indebted Poor Country’ (HIPC) scheme and the ‘Multilateral Debt Relief Initiative’ (MDRI). Debt cancellation often enables governments in poor countries to increase key public spending in areas such as health and education. However, debt burden still remains to be a problem for many developing countries for a number of reasons. For example, some countries were excluded from the original HIPC deal and many countries still spend a significant portion of their resources servicing their debt and re-accumulating new debts.
In light of the absence of an international process in place for dealing with government debt crisis, panellists will discuss the pros and cons of relieving debt burdens. How successful have HIPC and MDRI been and should they be replicated in other countries? What considerations should debtors and creditors make when creating new loans? And how can transparency in debt management be accomplished?