Credits: easyvoyage.com
On November 14th 2008, Norway announced the cancellation of an important part of Liberia’s debt. The Norwegian government agreed to cancel 35 million USD, making up 90% of the Liberia’s total debt to Norway. This gesture from the Norwegian government is directly in line with the Heavily Indebted Poor Countries Initiative (HIPC Initiative). This program, jointly proposed by the IMF and the World Bank in September 1996, was designed to provide exceptional assistance to eligible countries following sound economic policies to help them reduce their external debt burden to sustainable levels. Norway’s actions are also based on agreements concluded in April 2008 by the Club of Paris, an informal group of official creditors whose role is to find coordinated and sustainable solutions to the payment difficulties experienced by debtor nations, proposing for instance postponement, rescheduling and even partial or total cancellation of debts.
In accordance with the Norwegian Debt Relief Strategy, debt cancellation for Liberia was carried out without taking any funds from the government’s development budget. Erik Solheim, Norvegian Minister of the Environment and International Development, stressed in a press release that the cancellation does not therefore affect the development assistance provided to other poor countries.
The partial cancellation of Liberia’s debt underlies the efforts made by this country marked by more than 25 years of takeovers and civil war. Indeed, since November 2005 and the election of Ellen Johnson-Sirleaf, a Harvard graduate and mother of four, the country seems to have mad significant progress. According to Human Rights Watch, Liberia has made, “tangible progresses by moving from an almost collapsing State to a democratic Sate ruled by the law.” Those improvements are mainly due to policies established to fight corruption. Indeed, Johnson-Sirelaf, dubbed the “Iron Lady”, has made it her goal to put and end to this chronic problem which has burdened Liberia’s economy through the years.
In Ellen Johnson-Sirleaf’s mind, economic development is essential to peace in her country. Norway’s gesture has no doubt encouraged and provided necessary support to efforts in this direction.
For more information, visit :
- Club de Paris, where you can find information concerning the HIPC Initiative.
- the US department of State, to have more information concerning the situation in Liberia
