Bolivian flag.

The Heavily Indebted Poor Countries Initiative was started by the World Bank and International Monetary Fund in 1996. Just one year later, in 1997, Bolivia became the second country to start the program. To date, it is one of the only non-sub-Saharan-African countries to participate in the program, and is also one of the 18 countries that have reached ‘completion point’ and received irrevocable debt relief. It has also decreased its debt level to a more sustainable level that better fits the government’s budget.

One interesting aspect of the HIPC program in Bolivia was that Bolivia experienced debt relief under the original HIPC (which was in effect from 1996-1999) for several years, before starting to receive additional debt relief from the ‘enhanced’ HIPC in 1999 (the ‘enhanced’ HIPC is what exists today).

Overall, Bolivia’s debt situation was greatly improved after it completed the HIPC program. In total, it will receive $2 billion of debt relief by 2014. In total, the amount of debt is estimated to be cut by 58%, freeing up government money for other sectors, such as poverty reduction. In fact, while in the HIPC program and receiving partial debt relief, Bolivia was able to achieve many of its poverty reduction goals. For example, Bolivian government officials were finally able to reach an agreement on government spending on health and education in different areas of the country. Bolivia has also been able to increase access to basic resources for many of its rural provinces.

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Eldis: The HIPC Initiative in Bolivia

Gaeta, Anthony. Bolivia: World Bank And IMF Support US$1.2 Billion In Additional Debt Service Relief For Bolivia Under Enhanced HIPC Initiative. 2001.

World Bank: Bolivia. 2006.

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