World Bank-IMF Ratify Debt Forgiveness; Warn Against Debt Cycle

The World Bank and the IMF have formally approved the HIPC debt forgiveness initiative which will see Bolivia, Honduras and Nicaragua benefit from a total of $2.88 billion of debt forgiveness. The approval came at the weekend during the World Bank-IMF Spring meeting in Washington, DC. Fourteen other developing nations worldwide will also benefit from the program which was proposed by the World Bank and IMF and agreed by governments around the world in the fall of 1996. However, the World Bank also issued a warning to developing nations not to fall into the same cycle of debt.