The US Congress was slow to agree contributions to the HIPC Trust Fund, insisting that IMF reform should come first. The agreement from Congress is now secure, but the delay gave other creditors an excuse for not providing timely funding themselves. The introduction of new conditions for debt relief is proving a major factor in the delay. Although in principle this link between debt relief and poverty reduction is welcome, in practice it is having the effect of delaying the delivery of debt relief yet further. Fundamentally, the reason for the failure of the HIPC initiative is that it is designed by creditors and controlled by creditors.
Creditors have the power to define who gets what, and when, and how.
This means that their own political wrangling, conflicting agendas and minimising of cost become the dominant issues, not delivery of debt cancellation to those most in need. Jubilee 2000 is calling for a new independent mechanism to introduce a more disciplined, fairer and more transparent approach to international borrowing and lending. This idea of an independent arbitration process was championed by the United Nations Secretary General, Kofi Annan, in his 21st Century Action Plan. Jubilee 2000 has consistently called for countries beyond the official HIPC list of 41 to be included. President Obasanjo has appealed strongly for debt cancellation.