World Bank (Washington, DC)
13 November 2007
press release
Washington, DC — A comprehensive arrears plan achieved today positions Liberia for debt relief under the Heavily Indebted Poor Country (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI).
The agreement, which covers Liberia's arrears to the World Bank, the IMF and the African Development Bank, will permit Liberia to rapidly clear much of its arrears to smaller multilateral creditors and, with the Paris Club assistance, to clear much of its arrears to bilateral debtors.
"This is an important case of a post-conflict country moving forward. Since her elections, President Ellen Johnson Sirleaf has done a remarkable job in restoring stability and moving Liberia to a path of peace and development," said World Bank Group President Robert B. Zoellick.
"This breakthrough will help all of us to offer her and Liberia more support."
"I am pleased that IMF Managing Director, Dominique Strauss-Kahn, was able to complete the package by securing payments to clear arrears to the IMF so quickly after assuming office. I?m delighted we could use the recent Annual Meetings to build support for this critical action."
The arrears clearance plan demonstrates a strong vote of confidence by Liberia?s partners in its return to peace and responsible governance.
Liberia, once a middle income country with access to international capital markets and a per capita GDP comparable to those of Egypt, Indonesia and the Philippines, collapsed into a protracted civil war and fell heavily into arrears with its international creditors before emerging from conflict and conducting democratic elections two years ago.
Since that time, the government of President Ellen Johnson Sirleaf has demonstrated a strong commitment to sound macroeconomic and structural policies and to the rule of law. Arrears clearance and the normalization of Liberia?s external financial position will allow the country to trade freely and start attracting foreign direct investment to develop its resources and strengthen its capital markets. Liberia and its international partners will work rapidly toward reaching the Decision Point under the Enhanced HIPC Initiative.
Liberia's total arrears to the International Financial Institutions amount to $1.5 billion, including $458 million to the World Bank, $772 million to the IMF and $233 million to the African Development Bank.
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