A/HRC/23/37 37. In the context of debt relief, sustainability assessments are conducted by the World Bank and IMF using the Joint Debt Sustainability Framework for Low-Income Countries which the two institutions introduced in April 2005 “to help guide the borrowing decisions of low-income countries (LICs), provide guidance for creditors’ lending and grant allocation decisions to ensure that resources are provided to LICs on terms that are consistent with both progress towards their development goals and long-term debt sustainability and improve World Bank and IMF assessments and policy advice.”33 38. The assessments involve making projections of intended borrowings and economic variables over a 20-year period, then using ratios comparing debt stock, present value or service with gross domestic product, exports or budget revenue to assess payment capacity. This approach simply assesses whether, given certain analyses of economic growth, external trade dynamics and availability of external financial resources, a debtor country is able to service its debt. Thus, the criteria for assessing debt sustainability focus almost exclusively on the ability of debtor countries to repay their debts; they do not take into account a country’s ability or human rights obligation to provide basic services (such as safe water, sanitation, health care, education and housing). 39. In 2009, the Framework was reviewed to address concerns that it had “unduly constrained the ability of [low-income countries] to finance their development goals”.34 The aim of the review was to afford countries greater space to borrow more to cope with the challenges of the global economic downturn. Thus, the framework was “flexibilized” to enable countries to take on more debt without being deemed in debt “distress”. The revised Framework excludes certain State liabilities (i.e., debts of State-owned enterprises) and includes migrant remittances as contributions to countries’ capacities to their external debt. In 2012, the Framework was further reviewed “to assess whether it [remained] adequate in the light of changing circumstances” in low-income countries.35 40. The assumptions underlying IMF and World Bank debt sustainability assessments have been questioned. For example, in 2007, the IMF’s Independent Evaluation Office reported that “there is evidence that investment is consistently overestimated in IMFsupported programmes.”36 41. It is clear that IMF and the World Bank’s definition of debt sustainability is not only very narrow but does little to advance the poverty reduction goals of debt relief, let alone sustainable development. In the Independent Expert’s view, debt sustainability analyses should take into account the need to safeguard government spending required to meet basic human development needs and to establish the conditions for the realization of human rights, particularly economic, social and cultural rights. Put differently, debt sustainability analyses should include an evaluation of the level of debt that a country can carry without compromising its capacity to fulfil its human rights obligations and to pursue its own development agenda. 33 34 35 36 12 IMF and World Bank, “Revisiting the Debt Sustainability Framework for Low-Income Countries”, 12 January 2012, p. 1. See IMF and World Bank, “A Review of Some Aspects of the Low-Income Country Debt Sustainability Framework”, 5 August 2009. IMF and World Bank, “Revisiting the Debt Sustainability Framework for Low-Income Countries”, 12 January 2012. IMF, Independent Evaluation Office, Fiscal Adjustment in IMF-Supported Programmes, Evaluation Report (2003), p. 4. See also John Weeks and Terry McKinley, ”Does Debt Relief Increase Fiscal Space in Zambia?”, Country Study No. 5, UNDP, International Poverty Centre (September 2006), p. 6; J.J. Teunissen and A. Akkerman, (eds.) HIPC Debt Relief: Myths and Reality (FONDAD, 2004).