HIPC: Economic Prospects, Long-term Debt Sustainability and the Role of Investment: Economic Paper 66 (Economic Paper Series)

This paper provides an update on the progress made in the implementation of the HIPC Initiative, as well as on the discussions and proposals concerning long-term debt sustainability, especially in relation to ways in which external shocks due to commodity price movements can be mitigated and the terms and modalities of future donor financing, including great use of grants. The paper also provides a review of the economic prospects for HIPCs in the global context and concludes that while their growth performance is mixed, growth in the majority of the strongly performing economies still falls short of the 7-8 per cent required to make a significant impact on poverty and the achievement of the Millennium development Goals (MDGs). It examines investment trends in HIPCs and underscores the importance of raising investment levels.