To Forgive or Not to Forgive Debt is a substantial problem facing many countries in the world today. Some of the more economically stable countries are able to pay off their debt through strategic budget planning. However, there are many countries that constantly struggle to solve their debt problems. In response of this issue, the IMF and the World Bank have designed a framework to provide special assistance for heavily indebted poor countries that pursue IMF and World Bank supported adjustment and reform programs. This framework has been called the Heavily Indebted Poor Countries Initiative; it is also known as the HIPC Initiative. In this paper, I will explain the advantages and disadvantages of the HIPC Initiative. My main objective will be to explain why I think it is an appropriate obligation for the IMF and World Bank to make. To do this, I will describe the initiatives of the World Bank and IMF along with the reasons for its creation, its successes and challenges, economic advantages and disadvantages of the debt relief program, and finally some biblical perspective on debt forgiveness.First, it is important to look at what the HIPC Initiative is. The HIPC Initiative is a comprehensive approach to debt reduction for poor countries that requires the participation of all creditors. Its goal is to ensure that no poor country faces a debt burden it cannot manage. Central to the HIPC Initiative is each country’s continued effort toward macroeconomic adjustment and structural and social policy reforms. In addition, the initiative focuses on ensuring additional finance for social sector programs, primarily basic health and education. Following a comprehensive review of the HIPC Initiative, a number of modifications were approved in September 1999 to provide faster, deeper and broader debt relief and strengthen the links between debt relief, poverty reduction and social policies.The Initiative is not a universal reme...
