World Bank and IMF Announce $1.1 Billion in Debt Relief for Chad
The International Monetary Fund (IMF) and the World Bank announced $1.1 billion in debt relief for Chad.
The International Monetary Fund (IMF) and the World Bank announced $1.1 billion in debt relief for Chad. The money comes through the IMF and World Bank's two major debt relief programs: the Heavily Indebted Poor Country Initiative (HIPC) and the Multilateral Debt Relief Initiative (MDRI). Chad is the 36th country to receive HIPC relief and the first since 2012. Chad is the fourth-least developed country in the world. More than half its population lives in poverty.
"Debt relief for Chad means an investment in education and healthcare," said Eric LeCompte, executive director of the religious debt relief organization Jubilee USA Network, which advocated for the IMF and World Bank debt relief programs. "This is an important way to give Chad's people help."
As of 2013, Chad owed $2.2 billion to foreign lenders and spent over $100 million annually paying off debt. Prior to receiving debt relief, Chad owed around $800 million to the World Bank and $400 million to the African Development Bank. Chad also owes approximately $500 million to other governments. Under the relief plan, Chad receives $18 million in debt relief from the IMF, nearly $600 million from the World Bank and $236 million from the African Development Bank. Thirty-nine countries are eligible for HIPC debt relief. Qualifying countries must meet certain criteria and implement poverty reduction plans. Chad was granted relief even though it didn't meet all criteria. Critics of these plans argue that to qualify for debt relief, countries should not reduce any budget areas that protect vulnerable populations. The three other qualifying countries yet to receive relief are Sudan, Somalia and Eritrea.
Chad is one of the poorest countries in the world. Barely one-third of Chad's people are literate and life expectancy is just 50 years. It has the third highest mortality rate for children under five years old. Chad's people endured a civil war from 2005 to 2010 that required a United Nations peacekeeping intervention. Chad also faces significant regional challenges. Chad's military recently intervened in Nigeria's battle against Boko Haram militants and more than 260,000 Sudanese refugees from the Darfur conflict live in camps inside Chad.
"Debt doesn't exist in a vacuum," noted LeCompte. "Chad has immense challenges and its debt burden worsens all of them. Less debt means more hope."
Jubilee USA Network is an alliance of more than 75 US organizations and 400 faith communities working with 50 Jubilee global partners. Jubilee's mission is to build an economy that serves, protects and promotes the participation of the most vulnerable. Jubilee USA has won critical global financial reforms and more than $130 billion in debt relief to benefit the world's poorest people. www.jubileeusa.org