**GAO-09-162**                      Published: Jan 26, 2009. Publicly Released: Jan 26, 2009.                  

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## Highlights

In 1996, the Heavily Indebted Poor Countries (HIPC) Initiative was created to provide debt relief to poor countries that had reached unsustainable levels of debt. In 2005, the Multilateral Debt Relief Initiative (MDRI) expanded upon the HIPC Initiative by eliminating additional debt owed to four international financial institutions (IFI): the International Monetary Fund (IMF), World Bank's International Development Association (IDA), African Development Fund (ADF), and Inter-American Development Bank (IaDB). These four IFIs are projected to provide $58 billion in total debt relief to 41 countries. GAO (1) analyzed the U.S. financing approach for debt relief efforts; (2) reviewed the extent to which MDRI might affect resources available to countries for poverty-reducing activities; and (3) assessed revisions to the analyses conducted by the World Bank and IMF to review and promote future debt sustainability. GAO analyzed Treasury, IFI, and country documents and data, and interviewed officials at Treasury and the four IFIs.

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## Topics

International Affairs

Cost sharing (finance)DebtDebt collectionDeveloping countriesFederal aid to foreign countriesFinancial analysisFinancial institutionsFinancial managementForeign aid programsForeign economic assistanceForeign financial assistanceForeign governmentsForeign loansInternational economic relationsInternational organizationsMonetary policiesRelief agenciesReporting requirementsRisk managementForeign assistanceFinancial reportingTransparency