MARCO  MISSAGLIA

L'impatto reale della cancellazione del debito dei paesi poveri

N. 200

Summary - In the last few years, the debate around the external debt problem many poor countries have to face has gained momentum. Through the Jubilee 2000 Initiative, a full debt relief has been proposed as a possible way out of this problem and, above all, as a way of  financing social and developmental spending in poor countries. Following the cancellation, the argument runs, poor and indebted countries could (and should) use the resources made available to finance social spending, anti-poverty programmes and so on.

In this paper this "optimistic" view is discussed and criticised. It will be shown, through some simple and useful numerical example, that the benefits (in the specific sense of resources made available) potentially produced by a partial cancellation could accrue only to the creditors; or, even when they accrue to the debtors as well, such benefits could be very limited. Far from being a pure theoretical possibility, this is what is actually going on with the so called HIPC (Heavily Indebted Poor Countries) Initiative launched by the International Monetary Fund and The World Bank in 1996. As a consequence, the view expressed in this paper is that debt relief and HIPC, as such, are likely to be substantially ineffective. To be useful, they  should be accompanied by new, "fresh" money in the form of foreign aid. Debt cancellation is not a good substitute for foreign aid.