Liberia's Finance Minister, Antoinette Sayeh, has disclosed that the country has made some headways geared toward its strive for debt relief reduction.

Addressing participants at a two-day seminar on debt, aid and development organized by the Center for Democratic Empowerment (CEDE), Dr. Sayeh said Liberia has started with its major creditors, a process that should lead to a substantial debt relief reduction.

Minister Sayeh said that with the introduction of the Multilateral Debt Relief Initiative (MDRI) a little more than a year ago, Liberia could also benefit from total cancellation of its multilateral debt stock.

"The intention is to reduce the debt stock to minimum level that Liberia is able to service or benefit from debt elimination. But this is not as easy as it may sound; the process itself is lengthy and may take two years or even longer. It is important to understand what the prospects are, and the mechanisms for achieving this objective."

Continuing further, Dr. Sayeh intimated that the Heavy Indebted Poor Countries (HIPC) process is the principal mechanism whereby countries in situations like Liberia ave attained the necessary reduction of their external debt, adding that the HIPC process has two basic steps.

The first step, according to the Finance Minister, is a country must establish a track record of policy performance to reach what has been termed the "decision point."

At this decision point, she noted the country receives "interim" debt relief, meaning it does not have to pay debt service falling due, adding that at this point the debt stock is not yet forgiven.

Minister Sayeh said the process of building the track record has two important aspects. "First, the track record must be established under an IMF upper credit tranche conditionality program."

On the second step of the HIPC process, Minister Sayeh said a country must fulfill certain additional conditions to reach what has been termed completion point, at which time debt stocks are forgiven. The specific conditions vary by country, as does the time between decision point and completion point. She said for some countries, the time between the decision point and completion point is between one and two years.

With regards to where Liberia stands in the HIPC process, the Finance Minister said the IMF Board of Directors approved a Staff Monitoring Program (SMP) for Liberia in April 2006 covering the period through the end of September.

She said the program sets out several benchmarks to be achieved by September 2006. One of the main areas of focus under the SMP, Dr. Sayeh noted, is Liberia's domestic debt stock.

She said by the end of this program the government of Liberia is required to have vetted all domestic debts and arrears to have determined the cost of legitimate domestic debts and come up with plan for the servicing of these debts, noting that other areas of SMP include strictly adhering to a cash-based budget; completing the contract and concessions review; finalizing the anti-corruption policy; and integration of the Bureau of the Budget and the Bureau of Maritime Affairs into the Ministry of Finance.

Touching on Liberia's external debts, Minister Sayeh disclosed that the country public debt is huge, amounting to US$3.7 Billion. She said out of the total debt, 44 percent is owed to multilateral institutions-International Monetary Fund, the World Bank, and the African Development Bank, and 26 percent to bilateral creditors including the United States with 9 percent and Germany with 6 percent. Commercial banks hold 28 percent of the debt, and the remaining 1 percent is owed to foreign suppliers.

Other dignitaries including House Speaker Edwin Melvin Snowe, Planning Minister Geweay McIntosh among others spoke at the opening of the similar.