Under the Multilateral Debt Relief Initiative (2006)the cost of debt cancellations ($50 billion)
A) was financed through contributions to multilateral lenders by the advanced industrial countries.
B) was financed through contributions to advanced industrial countries by the multilateral lenders.
C) was financed by taking away resources from new development projects.
D) was entirely financed by the IMF and the African Development Fund (ADF).
E) was not linked to the high degree of conditionality under the HIPC initiative.

Question

Quizplus · Accepted Answer

The Multilateral Debt Relief Initiative (MDRI) was financed through contributions to multilateral lenders such as the World Bank, International Monetary Fund (IMF), and African Development Bank (AfDB) by the advanced industrial countries. The advanced industrial countries contributed $50 billion to finance the debt cancellations under the MDRI. Therefore, choice A is the correct answer. The MDRI was aimed to reduce the debt burden of the Heavily Indebted Poor Countries (HIPCs), without reducing the resources available for new development projects. The debt cancellations were not linked to the high degree of conditionality under the HIPC initiative, as the MDRI was an additional initiative to support the debt reduction efforts of the HIPCs.

Under the Multilateral Debt Relief Initiative (2006)the Cost of Debt