Debt relief also is good development policy. Debt relief can mobilize much-needed funds towards addressing critical social needs, and it can provide effective support for better governance and wider public participation in government. The Enhanced HIPC Initiative provides deeper, broader and faster debt relief to the worlds poorest, most heavily indebted countries. The key objective of the initiative is to promote sound economic policies and achieve greater poverty reduction. Lower debt targets mean deeper relief for all eligible countries.
Multilateral creditors provide debt forgiveness in proportion to their country exposure.
As many as three-quarters of the HIPCs may reach the decision point and receive interim relief by the end of 2000. The United States has worked closely with our G7 partners, NGOs and other interested parties to establish a fundamental new financing framework for the international community's efforts to combat poverty. The PRSP was developed to ensure that macroeconomic policies are set with full appreciation of the social context and that poverty reduction and social sector considerations are not treated as a residual. The country receiving debt relief will design the PRSP in consultation with the World Bank, the IMF, and civil society through a participatory process. The Bank will have lead responsibility for assisting countries in defining and monitoring progress in achieving core poverty reduction objectives.