IDEAS home Printed from https://ideas.repec.org/a/blv/journl/v6-7y2003i2-1p89-138.html
   My bibliography  Save this article

Assessing Bolivia´s debt relief under the heavily, indebted poor countries initiative

Author

Listed:
  • Daniela López

Abstract

This paper examines whether Bolivia has made enough progress in debt relief under the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative, thus taking a sustainable debt path and graduating from debt renegotiations definitely. We find that reaching the completion point at the Enhanced HIPC initiative was a major milestone to provide significant debt relief, far bigger than the one obtained under previous traditional debt renegotiation mechanisms. However, given exogenous-external and domestic-shocks, declining aid trends and optimistic macro-assumptions used in the Enhanced HIPC debt renegotiations, the probability of having Bolivia reversing to unsustainable debt ratios is high. Henceforth, there are four possible reasons for Bolivia to consider adopting further debt proposals. Achieving the Millennium Development Goals would require extra resources; unexpected shocks would justify the creation of a HIPC contingency fund for graduated countries, Bolivia debt sustainability targets might be lower than the standard ones defined by the Enhanced HIPC; and donors aid might be turning to be more selective, concentrated on good performers like Bolivia.

Suggested Citation

  • Daniela López, 2003. "Assessing Bolivia´s debt relief under the heavily, indebted poor countries initiative," Revista de Análisis del BCB, Banco Central de Bolivia, vol. 6(2-1), pages 89-138, December.
    • Handle: RePEc:blv:journl:v:6-7:y:2003:i:2-1:p:89-138
    as

    Download full text from publisher

    File URL: https://www.bcb.gob.bo/webdocs/publicacionesbcb/revista_analisis/ra_vol0602/articulo_3_v6_2_v7_1.pdf
    Download Restriction: no
    File URL: https://www.bcb.gob.bo/?q=pub_revista-analisis
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Nancy Birdsall & John Williamson, 2002. "Delivering on Debt Relief: From IMF Gold to a New Aid Architecture," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 337, January.
    2. Jeffrey D. Sachs, 1988. "Comprehensive Debt Retirement: The Bolivian Example," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(2), pages 705-715.
    3. Peter Hjertholm, 1999. "Analytical History of Heavily Indebted Poor Country (HIPC) Debt Sustainability Targets," Discussion Papers 00-03, University of Copenhagen. Department of Economics.
    4. Mr. Kevin Ross & Mr. R. Brooks & Mr. Robert Powell & Ms. Ydahlia A. Metzgen Quemarez & Ms. Doris C Ross & Mr. Mariano Cortes & Saqib Rizavi & Benoit Ketchekmen & Ms. Francesca Fornasari, 1998. "External Debt Histories of Ten Low-Income Developing Countries: Lessons from Their Experience," IMF Working Papers 1998/072, International Monetary Fund.
    5. Daniel Cohen, 2001. "The HIPC Initiative: True and False Promises," International Finance, Wiley Blackwell, vol. 4(3), pages 363-380.
    6. Jeffrey D. Sachs, 1989. "Developing Country Debt and the World Economy," NBER Books, National Bureau of Economic Research, Inc, number sach89-3.
    7. Lisandro Abrego & Doris C. Ross, 2001. "Debt Relief Under the HIPC Initiative: Context and Outlook for Debt Sustainability and Resource Flows," WIDER Working Paper Series DP2001-96, World Institute for Development Economic Research (UNU-WIDER).
    8. Ms. Christina Daseking & Mr. Robert Powell, 1999. "From Toronto Terms to the HIPC Initiative: A Brief History of Debt Relief for Low-Income Countries," IMF Working Papers 1999/142, International Monetary Fund.
    9. Juan Antonio Morales & Jeffrey D. Sachs, 1989. "Bolivia's Economic Crisis," NBER Chapters, in: Developing Country Debt and the World Economy, pages 57-80, National Bureau of Economic Research, Inc.
    10. Ms. Doris C Ross & Mr. Lisandro Abrego, 2001. "Debt Relief Under the HIPC Initiative: Context and Outlook for Debt Sustainability and Resource Flow," IMF Working Papers 2001/144, International Monetary Fund.
    11. Andersen, Lykke Eg & Nina, Osvaldo, 2000. "The HIPC Initiative In Bolivia," Documentos de trabajo 4/2000, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Knoll, Martin, 2013. "The heavily indebted poor countries and the multilateral debt relief initiative: A test case for the validity of the debt overhang hypothesis," Discussion Papers 2013/11, Free University Berlin, School of Business & Economics.
    2. Siddique, Abu & Selvanathan, E.A. & Selvanathan, Saroja, 2016. "The impact of external debt on growth: Evidence from highly indebted poor countries," Journal of Policy Modeling, Elsevier, vol. 38(5), pages 874-894.
    3. International Monetary Fund, 2005. "Bolivia: Ex-Post Assessment of Longer-Term Program Engagement," IMF Staff Country Reports 2005/139, International Monetary Fund.
    4. Maria Cipollina, 2007. "The developing countries’ foreign debt in the last twenty years," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 3, July.
    5. Ms. Yan M Sun, 2004. "External Debt Sustainability in HIPC Completion Point Countries," IMF Working Papers 2004/160, International Monetary Fund.
    6. Benjamin Ayodele Folorunso, 2013. "Relationship between Fiscal Deficit and Public Debt in Nigeria: an Error Correction Approach," Journal of Economics and Behavioral Studies, AMH International, vol. 5(6), pages 346-355.
    7. Madhur Gautam, 2003. "Debt Relief for the Poorest : An OED Review of the HIPC Initiative," World Bank Publications - Books, The World Bank Group, number 15164.
    8. Cohen, Joseph N., 2008. "Managing the Faustian bargain: monetary autonomy in the pursuit of development in Eastern Europe and Latin America," MPRA Paper 22435, University Library of Munich, Germany.
    9. Claudio Raddatz, 2011. "Multilateral Debt Relief through the Eyes of Financial Markets," The Review of Economics and Statistics, MIT Press, vol. 93(4), pages 1262-1288, November.
    10. Ms. Annalisa Fedelino & Alina Kudina, 2003. "Fiscal Sustainability in African HIPC Countries: A Policy Dilemma?," IMF Working Papers 2003/187, International Monetary Fund.
    11. HEPP, Ralf, 2010. "CONSEQUENCES OF DEBT RELIEF INITIATIVES IN THE 1990s," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 10(1).
    12. Unver, Mustafa & Dogru, Bulent, 2015. "The Determinants of Economic Fragility: Case of the Fragile Five Countries," MPRA Paper 68734, University Library of Munich, Germany, revised 2015.
    13. Neumayer, Eric, 2002. "Is Good Governance Rewarded? A Cross-national Analysis of Debt Forgiveness," World Development, Elsevier, vol. 30(6), pages 913-930, June.
    14. Mondino, Guillermo & Sturzenegger, Federico & Tommasi, Mariano, 1996. "Recurrent High Inflation and Stabilization: A Dynamic Game," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(4), pages 981-996, November.
    15. Sushanta Mallick & Brigitte Granville, 2005. "How best to link poverty reduction and debt sustainability in IMF-World Bank models?," International Review of Applied Economics, Taylor & Francis Journals, vol. 19(1), pages 67-85.
    16. Jie Yang & Dan Nyberg, 2009. "External Debt Sustainability in HIPC Completion Point Countries: An Update," IMF Working Papers 2009/128, International Monetary Fund.
    17. Marin Ferry & Marc Raffinot, 2019. "Curse or Blessing? Has the Impact of Debt Relief Lived up to Expectations? A Review of the Effects of the Multilateral Debt Relief Initiatives for Low-Income Countries," Journal of Development Studies, Taylor & Francis Journals, vol. 55(9), pages 1867-1891, September.
    18. Mr. Barry J. Eichengreen & Ms. Asmaa A ElGanainy & Rui Pedro Esteves & Kris James Mitchener, 2019. "Public Debt Through the Ages," IMF Working Papers 2019/006, International Monetary Fund.
    19. Easterly, William, 2002. "How Did Heavily Indebted Poor Countries Become Heavily Indebted? Reviewing Two Decades of Debt Relief," World Development, Elsevier, vol. 30(10), pages 1677-1696, October.
    20. Raúl Castro & Manuel Felipe Avella, 2020. "Precio cuenta (sombra) de la divisa en una estructura de tipo de cambio fijo. Estudio de Caso Bolivia," Documentos CEDE 18008, Universidad de los Andes, Facultad de Economía, CEDE.

    More about this item

    Keywords

    external debt; HIPC; low income countries debt; Bolivia;
    All these keywords.

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • N26 - Economic History - - Financial Markets and Institutions - - - Latin America; Caribbean
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:blv:journl:v:6-7:y:2003:i:2-1:p:89-138. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jose Antonio Caballero Pelaez (email available below). General contact details of provider: https://edirc.repec.org/data/bcbgvbo.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.