Juan José Toribio, director executive director of the IMF from 1996-1998 and professor at IESE of the University of Navarra, called for political support for the HIPC (Highly Indebted Poor Countries) Initiative, launched by the World Bank and the IMF to give an economic boost to the 40 poorest and most indebted countries. "The HIPC sample that debt cancellation is not a matter of political will, but that this will must be channeled in a technically efficient way." Toribio has participated in an international symposium on "External Debt" organized by the School of Economics at the University of Navarra.

In the IESE professor's opinion, the "case-by-case" method of analyzing the foreign debt problem is much more effective than indiscriminate solutions: "Popular sentiment wants us to provide 'the' solution 'to' the problem, by means of some spectacular subject action. But the cancellation of the foreign debt is not as simple as the one that an individual creditor can exercise with a debtor". He also warned of the urgency of finding solutions, since "the shortcomings of one part of the world are the greatest risk to the global economic system".

According to the World Bank, 160 countries are on the way to development: 64 with leave income, 63 with medium income and 33 are in the upper income bracket. Of these 160, 53 are severely indebted, 29 are moderately indebted and the rest are slightly indebted. "The HIPC initiative focuses on those who meet the conditions of leave income and severe debt. It is not clear what can be done with the others." Toribio acknowledged that this selection "can lead to very serious tensions".

First world

If over three years the countries selected for the HIPC undertake a series of structural reforms, they would reach the 'decision point' at which a substantial part of the debt owed to both the World Bank and the Paris Club countries would be forgiven. "The cost of this write-off to the IMF and WB would be about $28 billion. The Paris Club countries have already reduced debts to a total value of $30 billion, similar to what would be necessary for them to take on again. So the HIPC initiative is likely to cost the first world close to $80 billion.

According to Toribio, the first world must assume the total cost of the operations, so as not to endanger the balance of international institutions such as the World Bank. He also acknowledged that for European countries "the cost of debt cancellation creates a technical problem, since, with the new Eurostat rules, this disbursement will have to be included in the ordinary budget of EU countries, at a time of special interest in combating the deficit".

Finally, he referred to the difficulty of "establishing economic adjustment and structural reform programs in countries where war, natural disasters and corruption are intertwined. This is the case of Sierra Leone, Mozambique, Sudan, Ethiopia, Zimbabwe and Rwanda.