Debt relief is generally understood as a joint initiative undertaken by the International Monetary Fund (IMF) and the World Bank to ensure that the debt burden of heavily indebted poor countries (HIPC) is manageable. The HPIC Initiative was launched in 1996 and modified through the enhanced initiative of 1999, which allowed for the provision of funds at a faster rate. This provision also strengthened the links between debt relief and poverty reduction.

To help accelerate progress toward the United Nations Millennium Development Goals, in 2005 the HIPC Initiative was supplemented by the Multilateral Debt Relief Initiative (MDRI). The MDRI allows for 100 percent relief on eligible debts by three multilateral institutions—the IMF, the World Bank, and the African Development Fund—for countries completing the HIPC Initiative process. ...

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