Fifteenth to reach HIPC completion point

Madagascar has reached its completion point under the enhanced Heavily Indebted Poor Countries (HIPC) initiative, the World Bank announced on Thursday. As a result, the Indian Ocean island has qualified for debt relief of US $1.9 billion - half its total debt - the Bank said in a press release. The HIPC initiative aims to achieve sustainable levels of debt for poor countries pursuing adjustment and reform programmes supported by the International Monetary Fund and the World Bank. Madagascar is only the fifteenth country to reach the completion point. The Bank noted that Madagascar had recovered from the 2002 political crisis sparked by the highly contested presidential elections in December 2001, which led to a decline in Gross Domestic Product (GDP) of nearly 13 percent and a rise in the poverty rate from 69.6 percent in 2001 to 80.6 percent in 2002. Last year the economy recorded a real GDP growth rate of 9.8 percent, but earlier this year two cyclones and a sharp depreciation of the currency affected the economy yet again. "The authorities have taken corrective actions to maintain macroeconomic stability and are committed to containing inflation, accelerating the implementation of structural reforms and diversifying the export base to boost exports and economic growth," noted the World Bank. Upon reaching its decision point in December 2000, Madagascar undertook to implement certain reforms in order to reach the completion point. These were: to prepare a full Poverty Reduction Strategy Paper; maintain macroeconomic stability, governance and institutional reform, especially in the area of tax administration; and achieve key social objectives in health services, education and infrastructure.