Multilateral Debt Relief Initiative (MDRI) was approved
on June, 2005, by the finance ministers of the G8 during the 31st G8 Summit, held at
Gleneagles,
Scotland
Scotland (, ) is a country that is part of the United Kingdom. Covering the northern third of the island of Great Britain, mainland Scotland has a border with England to the southeast and is otherwise surrounded by the Atlantic Ocean to ...
. MDRI is different to
HIPC, but operationally related. Countries in the termination point get full relief of their debt with
IMF
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster glob ...
,
International Development Association
The International Development Association (IDA) (french: link=no, Association internationale de développement) is an international financial institution which offers concessional loans and grants to the world's poorest developing countries. ...
(IDA) and the
African Development Bank
The African Development Bank Group (AfDB) or (BAD) is a multilateral development finance institution headquartered in Abidjan, Ivory Coast, since September 2014. The AfDB is a financial provider to African governments and private companies ...
(AfDB). MDRI was approved for encouraging debtor countries to continue their political reforms. For reasons of equal treatment of Low Income Countries (LIC) the relieved debts were counted when new ancillary remedies were guaranteed by IDA and AfDB. G8 members committed themselves to compensate IDA and AfDB refluxes with further remedies. These compensations will be shared among IDA and AfDB beneficiary countries according to the efforts they make (performance based allocation).
How does MDRI work
IMF, IDA and AfDB fully relieve the debt of countries which attain (after complying with specific conditions that are detailed in
HIPC page) termination point — the step where a country is eligible to receive total and irrevocable relief of its debt— in HIPC's frame.
The difference
with HIPC consists of MDRI not covering all creditors, only IMF, IDA and AfDB. Besides, under MDRI, IMF also provided debt relief to non-HIPC countries whose per capita income did not exceed $380 and were indebted with IMF until the end of 2004. Thus a uniform treatment in IMF resources management is guaranteed.
Cost
Total debt relief
provided by IMF through MDRI lied around US$3.4 billion, in nominal terms. Besides IMF granted Liberia a debt relief of US$172 million as June, 30th 2010. "26 HIPC countries that had reached the completion point as of June 2009 will receive $29 billion (in end-2008 net present value terms) in debt relief under the MDRI."
As February 2, 2015, no pending debt rested eligible for MDRI, so its bills were liquidated and the remnants were transferred to the Disaster Relief and Contention Trust Fund.
Countries participating in MDRI
Thirty-seven countries
have benefited from MDRI: Afghanistan, Benin, Bolivia, Burkina Faso, Burundi, Cambodia, Cameroon, Comores, Ivory Coast, Ethiopia, Gambia, Ghana, Guinea, Guinea-Bissau, Guyana, Haiti, Honduras, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Nicaragua, Niger, Central African Republic, Republic of the Congo, Democratic Republic of the Congo, Rwanda, São Tomé and Príncipe, Senegal, Sierra Leona, Tanzania, Tajikistan, Togo, Uganda and Zambia.
See also
*
Debt relief Debt relief or debt cancellation is the partial or total forgiveness of debt, or the slowing or stopping of debt growth, owed by individuals, corporations, or nations.
From antiquity through the 19th century, it refers to domestic debts, in particu ...
*
Odious debt
*
Public debt
A country's gross government debt (also called public debt, or sovereign debt) is the financial liabilities of the government sector. Changes in government debt over time reflect primarily borrowing due to past government deficits. A deficit oc ...
*
Heavily indebted poor countries
The heavily indebted poor countries (HIPC) are a group of 39 developing countries with high levels of poverty and debt overhang which are eligible for special assistance from the International Monetary Fund (IMF) and the World Bank.
The HIPC ...
(HIPC)
*
Millennium Development Goals
The Millennium Development Goals (MDGs) were eight international development goals for the year 2015 that had been established following the Millennium Summit of the United Nations in 2000, following the adoption of the United Nations Millenn ...
References
{{Global economic classifications
Economic development programs
Third World debt cancellation activism
Measurements and definitions of poverty
Economic country classifications