Multilateral Debt Relief Initiative (MDRI) was approved
in June 2005 by the finance ministers of the G8 during the 31st G8 Summit, held at
Gleneagles, Scotland. MDRI is different to
HIPC, but operationally related. Countries in the termination point get full relief of their debt with
IMF
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of la ...
,
International Development Association
The International Development Association (IDA) () is a development finance institution which offers concessional loans and grant (money), grants to the world's poorest developing country, developing countries. The IDA is a member of the World ...
(IDA) and the
African Development Bank
The African Development Bank Group (AfDB, also known as BAD in French) is a multilateral development finance institution, headquartered in Abidjan, Ivory Coast since September 2014. The AfDB is a financial provider to African governments and ...
(AfDB). MDRI was approved for encouraging debtor countries to continue their political reforms. For reasons of equal treatment of Low Income Countries (LIC) the relieved debts were counted when new ancillary remedies were guaranteed by IDA and AfDB. G8 members committed themselves to compensate IDA and AfDB refluxes with further remedies. These compensations will be shared among IDA and AfDB beneficiary countries according to the efforts they make (performance based allocation).
How it works
IMF, IDA and AfDB fully relieve the debt of countries which attain (after complying with specific conditions that are detailed in
HIPC page) termination point—the step where a country is eligible to receive total and irrevocable relief of its debt—in HIPC's frame.
The difference
with HIPC consists of MDRI not covering all creditors, only IMF, IDA and AfDB. Besides, under MDRI, IMF also provided debt relief to non-HIPC countries whose per capita income did not exceed $380 and were indebted with IMF until the end of 2004. Thus a uniform treatment in IMF resources management is guaranteed.
Cost
Total debt relief
provided by IMF through MDRI lied around US$3.4 billion, in nominal terms. Besides IMF granted Liberia a debt relief of US$172 million as June 30, 2010. "26 HIPC countries that had reached the completion point as of June 2009 will receive $29 billion (in end-2008 net present value terms) in debt relief under the MDRI."
As February 2, 2015, no pending debt rested eligible for MDRI, so its bills were liquidated and the remnants were transferred to the Disaster Relief and Contention Trust Fund.
Participating countries
Thirty-seven countries
have benefited from MDRI: Afghanistan, Benin, Bolivia, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Comoros, Republic of Congo, Democratic Republic of Congo, Côte d’Ivoire, Ethiopia, The Gambia, Ghana, Guinea, Guinea-Bissau, Guyana, Haiti, Honduras, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Somalia, São Tomé & Príncipe, Senegal, Sierra Leone, Tanzania, Togo, Uganda, Zambia.
See also
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Debt relief
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Odious debt
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Public debt
A country's gross government debt (also called public debt or sovereign debt) is the financial liabilities of the government sector. Changes in government debt over time reflect primarily borrowing due to past government deficits. A deficit occu ...
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Heavily indebted poor countries (HIPC)
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Millennium Development Goals
In the United Nations, the Millennium Development Goals (MDGs) were eight international development goals for the year 2015 created following the Millennium Summit, following the adoption of the United Nations Millennium Declaration. These w ...
References
{{Global economic classifications
Economic development programs
Third World debt cancellation activism
Measurements and definitions of poverty
Economic country classifications