Economic Prospects, Long Term Debt Sustainability and the Role of Investment

image of HIPCs
This paper provides a review of the economic prospects for HIPCs in the global context. Two issues in particular are discussed. First, the paper emphasises the importance of promoting export orientated investment that upgrades and sustains exports.

Second, it underlies the need to promote private participation in infrastructure. The paper was commissioned by the Commonwealth Secretariat as an input into the Commonwealth HIPC Ministerial Forum in March 2004, which was held in Freetown, Sierra Leone. It also includes the Ministerial Statement, which is attached as an Annex to the paper.



Economic Prospects of HIPCs in the Global Context

The short- to medium-term economic prospects of HIPCs are crucially dependent on developments in the major economies of the world, which are their main markets, on prospects for both oil and non-oil commodity prices and on how much external financing is available, especially in the form of aid and debt relief. In the world economy, some developing countries and regions are also becoming important locomotives for growth and these developments also have a bearing on the prospects for some HIPCs. In addition, as most HIPCs are also heavily dependent on agriculture, weather plays an important role in their performance, as does the incidence of conflict which can disrupt production.


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