Washington, D.C. — The International Monetary Fund has declared Guinea-Bissau eligible for debt relief under the Enhanced Initiative for Heavily Indebted Poor Countries, it announced Tuesday.

The finding has been made "on a preliminary basis" and the IMF's executive board should make a final decision before the end of the year.

The acting chairman of the board, Stanley Fischer, said Tuesday that a "debt sustainability analysis" conducted in conjunction with the country's government showed that "Guinea-Bissau's external debt as of end-1999 far exceeds the sustainability thresholds under the enhanced HIPC Initiative..."

He added: "Guinea-Bissau's satisfactory track record of performance under IMF and World Bank-supported programs, the preparation of a participatory Interim Poverty Reduction Strategy Paper, and the adoption of a program that could be supported by the Fund's Poverty Reduction and Growth Facility would pave the way for Guinea-Bissau to reach the decision point by end-2000."

Fischer said the country's authorities should continue efforts to reduce poverty and improve governance and social services. He supported their efforts to spend more money on reducing poverty and less on the military.

IMF Official Backgrounder on HIPC: Initiative for the Heavily Indebted Poor Countries