ZAMBIA: World Bank pushes for debt relief

The World Bank representative in Zambia has called on the International Monetary Fund (IMF) and other bilateral donors to ensure that Zambia qualifies for the Highly Indebted Poor Countries (HIPC) status. The representative, Laurence Clarke, told IRIN that the HIPC status, once granted, would help Zambia reduce its debt to a sustainable level. He said some donors at the Paris Club meeting had indicated their willingness to waive the eligibility requirements for Zambia. The World Bank's country director for Zambia, Phyllis Pomerantz, told IRIN on Monday that Zambia's total external debt was currently estimated at US $6.6 billion. "This debt is both to the IMF as well as other bilateral institutions," Pomerantz said. Under World Bank criteria, a country can only qualify for HIPC status if it faces an unsustainable debt situation "after the full application of current debt relief mechanisms and would have to demonstrate an appropriate track record of adjustment and reform". According to figures quoted by Zambian non-governmental organisations (NGOs), the country's external debt had increased steadily from about US $3.3 million in 1980 to US $7.1 million. Quoting figures released by the UN Development Programme for 1989-1994, the NGOs argued that 89 percent of people in rural areas and 60 percent of urban dwellers were poor. Pointing out that poverty was the single most prominent and pervasive phenomenon in the country, the NGOs said 84.6 percent of Zambia's population lived below a poverty line based on an income of US $1 a day. Launched in September 1996, the HIPC Initiative, according to the World Bank, "is used specifically in cases where traditional debt relief mechanisms will not be enough to help countries exit from the rescheduling process". Mozambique and Uganda are among seven countries that have so far qualified for relief under the HIPC initiative.