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).
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