By mina Yirga

One of Bill Clinton’s final acts as president was to secure Congressional approval for a $43 million component within the foreign aid bill. This provision fulfills the pledge the United States originally made in 1996 at the Group of Seven summits, where the world’s richest governments agreed to finance a debt relief plan for 41 of the poorest third world nations. The plan formally called the Debt Relief Initiative for Heavily Indebted Country’s commonly referred to as the HIPC initiative. Third world debt is administered by the International Monetary Fund( IMF) and the World Bank, which are largely controlled by G-7 governments. Since the early 1980’s the IMF and the World Bank have based loan awards on compliance with “structural adjustment programs” ,economic reform polices with a free bias.
This week’s society has brought up for discussion the issue of debt relief. Here follows our readers comments...

Do you think debt relief would help countries like Ethiopia to develop faster ?

The economic reforms the HIPC countries must implement should be considered as one way of motivation. Either ways a given country should work towards development.
Tekeste Berhane, Arat Kilo

An estimated 7 million people in Ethiopia need immediate food assistance. With this chaotic situations expecting us to pay our debt will be immoral.
Takele Teshome, Gurde Shola

The third world’s debt is incurred by corrupt and unaccountable regimes. The money should not be targeted towards personal benefits. What’s important here is the wise use of the debt saving by the country’s government.
Miti Lema, Ayertena

Loan providers should invest on infrastructural projects rather than granting it to the government. The money which has been allocated for road construction might be diverted into buying military equipment. Loan providers should not turn their face after they have given the money. They should check whether it is used properly or not.
Desta Kebede, Sarbet

I believe debt relief will some how narrow the huge gap between the poor and the rich. For an indebted country, forgiving it even a single penny really counts, since it will help for other development.
Mekuria Kasu, Megenagna

Will debt relief maintain its target?

The Highly Indebted Poor Countries Initiative HIPC, acts as a green light for Ethiopia to develop sound social and economic policies and implement locally owned poverty reduction frame works to tackle the unfolding food insecurity problem. HIPC aims to reduce each country’s debt service on average of 37% annually.
It has also identified 32 countries legible to receive debt relief, out of which Sub-Saharan African countries dominate. The 27 countries have so far received 54 billion in aid by the HIPC initiatives.(2004)
At times the amount of debt relief provided is insignificant to free the indebted countries from the unsustainable debt burden. Perhaps what they pay annually might exceed the amount of the country’s spending. (According to web information since 1996 the debt burden of all developing countries has climbed from 2.2 trillion to 2.6 trillion). To prove that they are moving with the satisfactory pace for total debt forgiveness, countries are forced to ask budgets to implement the HIPC initiative requirements while also paying their previous loans.
Most countries are obliged to pay more towards their debt than spending on other societal infrastructure. In case of unanticipated crisis a country can engage into seeking additional loan or aid but lets not forget the high interest rates and other conditions imposed.
The other effect will be some countries might go out and deal for more debts in the belief that these will also be canceled in the future. And risks appear in countries snowed under with corruption. The support given might not be applied to what it has been planned for.
The debt relief program to a greater extent, has made some countries to put more resource towards sectors that increase growth and that alleviate poverty than they otherwise would have. In addition to this, it has created a positive channel to get in touch with the HIPC supporting teams. Debt savings will gear the HIPC countries to focus more on the country’s problems. Well, it’s good to put our finger crossed for such initiations since we don’t want to go from bad to worse.