Chapter

Ethiopian Debt Policy

Matthew Martin

in Overcoming Developing Country Debt Crises

Published in print February 2010 | ISBN: 9780199578788
Published online May 2010 | e-ISBN: 9780191723049 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199578788.003.0010

Series: Initiative for Policy Dialogue

Ethiopian Debt Policy

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This chapter takes us through the revealing case in point of how Ethiopia's debt burden was lifted. It traces the laborious process that the government underwent in eight separate debt renegotiation rounds in the Club from 1992 to 2004, four of them before the HIPC Initiative was launched and four as part of the Initiative. The final decision on HIPC relief for Ethiopia was then followed by a further reduction in debt under the MDRI, which cancelled almost all of Ethiopia's remaining external debt. Within the context of the donors' slow recognition of the need for deeper relief, the chapter emphasizes how important it was that the Ethiopian debt management team gained the capacity and confidence to independently make its own debt sustainability assessments. Ethiopia thus became better able to advocate for itself in negotiations in the Bretton Woods institutions and with its government creditors on how much relief it required.

Keywords: Ethiopia; debt; relief; Millennium Development Goals; heavily indebted poor countries; Multilateral Debt Relief Initiative

Chapter.  8554 words.  Illustrated.

Subjects: Macroeconomics and Monetary Economics

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