However, the gains delivered by these commitments are currently at risk. The G8 are off track to meet their Gleneagles commitment to provide full and timely financing to compensate the international financial institutions for Multilateral Debt Relief Initiative (MDRI) assistance. Moreover, the impact of the global economic crisis, coupled with billions of dollars in emergency lending, has increased the level of unsustainable debt for many sub-Saharan African countries. As a result, many Heavily Indebted Poor Countries (HIPCs) in Africa are in danger of reversing years of progress on debt relief and sliding back into debt distress.
Progress since Gleneagles
ON DEBT CANCELLATION, EARLY PROGRESS IS YIELDING TO A DETERIORATING SITUATION
Debt cancellation has resulted in significant gains for those countries able to invest savings into their people. The agreement to support 100% debt cancellation in Gleneagles was celebrated as development partners worked quickly to turn that commitment into action later in 2005 through the World Bank and IMF Fall meetings. However, not all donors (namely France, Italy, Japan and the US) have followed through with the financial commitments necessary to sustain the commitment. Further, despite increased debt cancellation, the number of countries with unsustainable debt burdens has fallen only moderately, as countries take on new lending and some donors (such as France) focus their ODA on loans rather than grants.
