As of September 2009, the HIPC program had identified 40 countries (29 of which are in Sub-Saharan Africa) as being potentially eligible to receive debt relief. The 35 countries that have so far received full or partial debt relief are:^[1]

Afghanistan    Benin    Bolivia    Burkina Faso    Cameroon    Central African Republic    Chad*   Republic of the Congo    Democratic Republic of the Congo*   Côte d'Ivoire*   Ethiopia    Gambia

Ghana    Guinea*   Guinea-Bissau*   Guyana    Haiti    Honduras    Liberia*   Madagascar    Malawi    Mali    Mauritania    Mozambique

Nicaragua    Niger    Rwanda    São Tomé and Príncipe    Senegal    Sierra Leone    Tanzania    Togo*   Uganda    Zambia

The Missing Jigsaw Piece

Economists used to think wealth came from a combination of man-made resources (roads, factories, telephone systems), human resources (hard work and education), and technological resources (technical know-how, or simply high-tech machinery). Obviously, poor countries grew into rich countries by investing money in physical resources and by improving human and technological resources with education and technology transfer programs.

Economists used to think wealth came from a combination of man-made resources (roads, factories, telephone systems), human resources (hard work and education), and technological resources (technical know-how, or simply high-tech machinery). Obviously, poor countries grew into rich countries by investing money in physical resources and by improving human and technological resources with education and technology transfer programs.

Nothing is wrong with this picture as far as it goes. Education, factories, infrastructure, and technical know-how are indeed abundant in rich countries and lacking in poor ones. But the picture is incomplete, a puzzle with the most important piece missing.

The first clue that something is amiss with the traditional story is its implication that poor countries should have been catching up with rich ones for the last century or so--and that the farther behind they are, the faster the catch-up should be. In a country that has very little in the way of infrastructure or education, new investments have the biggest rewards.

This expectation seems to be confirmed by the experience of China, Taiwan, and South Korea--not to mention Botswana, Chile, India, Mauritius, and Singapore. Fifty years ago they were mired in poverty, lacking man-made, human, technical, and sometimes natural resources. Now these dynamic countries, not Japan, the United States, or Switzerland, have become the fastest-growing economies on the planet.

Since technology is widely available and increasingly cheap, this is what economists should expect of every developing country. In a world of diminishing returns, the poorest countries gain the most from new technology, infrastructure, and education. South Korea, for example, acquired technology by encouraging foreign companies to invest or by paying licensing fees. In addition to the fees, the investing companies sent profits back home. But the gains to Korean workers and investors, in the form of economic growth, were 50 times greater than the fees and profits that left the country.

As for education and infrastructure, since the returns seem to be so high, there should be no shortage of investors willing to fund infrastructure projects or lend money to students (or to governments that provide education). Banks, domestic and foreign, should be lining up to lend people the money to get through school or to build a new road or a new power plant. In turn, poor people, or poor countries, should be very happy to take out such loans, confident that investment returns are so high that the repayments will not be difficult. Even if, for some reason, that didn't happen, the World Bank, established after World War II with the express aim of providing loans to countries for reconstruction and development, lends billions of dollars a year to developing countries. Investment money is clearly not the issue; either the investments are not being made, or they are not delivering the returns the traditional model predicts.

The HIPC program was initiated by the International Monetary Fund and the World Bank in 1996, following extensive lobbying y and other bodies. It provides and low-interest loans to cancel or reduce external debt repayments to sustainable levels. To be considered for the initiative, countries must face an unsustainable debt burden which cannot be managed with traditional means. Assistance is conditional on the national governments of these countries meeting a range of economic management and performance targets.The IMF estimates that the total cost of providing debt relief to the 40 countries currently eligible for the HIPC program to be around $71 billion (in 2007 dollars). Half of the funding is provided by the IMF, World Bank, and other multilateral organizations, while the other half is provided by the creditor countries.