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Honduras One Step Closer to Debt Forgiveness

TEGUCIGALPA (EFE) – HonduranPresident Ricardo Maduro last weekexpressed his satisfaction with a recentevaluation by the International MonetaryFund (IMF) of his country’s progresstoward eligibility for debt forgivenessunder the Highly Indebted Poor CountriesInitiative, known as HIPC.The President said “Honduras’ advancesin economics and its political consistency inmaintaining macroeconomic stability on themedium term” pleased himThe IMF’s evaluation puts Hondurason the brink of culminating with the conditionsnecessary for $1.2 billion in debt forgivenessunder the HIPC program over thenext 12 years.The final step is the approval of the WorldBank, which is scheduled for this week.PRESIDENT Maduro recognized theefforts of former President Carlos Flores(1998-2002) and Honduran CardenalOscar Rodríguez, both of whom have ledHonduras’ debt-forgiveness campaign.Flores got Honduras accredited for theHIPC program, while Rodríguez, considereda shortlist candidate for the next Pope(see separate story in TT), has been lobbyingfor international debt forgiveness ofHonduras since 1996.Honduras was declared eligible for theHIPC program in 1999, and entered into astrict IMF economic structural-adjustmentprogram aimed at maintaining macroeconomicstability.President Maduro, who took office inJanuary of 2002, continued the economicpolicies laid out by the international lendinginstitutions, which has represented astiff sacrifice of social spending inHonduras over the last years.MADURO explained that the pardoningof $1.2 billion in debt would be animportant achievement in the country’sPoverty-Reduction Strategy, which isaimed at paying down the foreign debt.Honduras, a country of nearly 7 million,70% of whom live in poverty, has atotal foreign debt of more than $5 billion.Nicaragua is the only other CentralAmerican country to benefit from HIPCdebt relief. Under the program, the IMF andWorld Bank granted Nicaragua $4.5 billionin debt forgiveness – approximately 73% ofthe country’s total external debt – in 2003.

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