Debt relief Debt Relief
Debt relief frees up long term resources for poverty reduction. It is a predictable source of aid, allowing countries to plan the use of the savings effectively. The main international initiatives have delivered over $117 billion of debt relief since 1999.
This money has made a huge difference. It has reduced the debt burden of countries receiving relief by about 80%. This means that countries can now spend more on essential services. And they do: annual spending on anti-poverty programmes increased from $6 billion to $27 billion since 1999.
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Sustainable debt Sustainable Debt
Debt reduction alone cannot guarantee long-term debt sustainability. It is important for countries to be able to access the finance they need to meet their development objectives but at the same time, taking on new debts must be done in a responsible manner.
The international community must ensure that new financing provided to countries is delivered in the right mix of loans and grants to avoid debt crises in the future, and borrowing countries must manage their borrowing well.
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Debt management capacity building Debt management capacity building
It is important that countries are able to manage their debts well: Countries need to prove that they have the capacity to handle their debts in a responsible manner in order to benefit from debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative. Once debt relief has been provided, it is essential that countries also manage their borrowing well and do not accumulate debts that will be unsustainable in the future. This is why DFID supports the Heavily Indebted Poor Countries' Debt Strategy and Analysis Capacity Building Programme (HIPC CBP).
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