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Published by: Wits Business School - University of the Witwatersrand
Published in: 2001

Abstract

Planning and Finance Minister, Luisa Diogo, faced one of her most critical leadership challenges as a government official. She was charged with negotiating the approval of a poverty reduction strategy - a condition for Mozambique to receive significant debt relief, as part of the International Monetary Fund (IMF) and World Bank sponsored debt initiative. The heavily indebted poor countries (HIPC) initiative was central to Mozambique's continued economic recovery, which had been made even more arduous owing to widespread flooding in the country during 2000 and 2001. Achievement of debt relief through the World Bank-IMF initiative would amount to a 60 percent reduction in total debt service payments. In effect, Mozambique's debt would fall from approximately USD104 to USD45 million, helping the government to achieve its economic targets. Yet this relief was contingent upon agreement between the government, civil society in Mozambique, and the World Bank and IMF regarding the design of a poverty reduction strategy paper (PRSP). The agreement of Algeria and Iraq to participate in the debt relief programme was also necessary. Diogo needed to ensure that progress toward economic development continued. She considered what might be the best way of achieving agreement on the poverty reduction programme, so as to secure the much needed debt relief for Mozambique.
Location:
Other setting(s):
2001

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Abstract

Planning and Finance Minister, Luisa Diogo, faced one of her most critical leadership challenges as a government official. She was charged with negotiating the approval of a poverty reduction strategy - a condition for Mozambique to receive significant debt relief, as part of the International Monetary Fund (IMF) and World Bank sponsored debt initiative. The heavily indebted poor countries (HIPC) initiative was central to Mozambique's continued economic recovery, which had been made even more arduous owing to widespread flooding in the country during 2000 and 2001. Achievement of debt relief through the World Bank-IMF initiative would amount to a 60 percent reduction in total debt service payments. In effect, Mozambique's debt would fall from approximately USD104 to USD45 million, helping the government to achieve its economic targets. Yet this relief was contingent upon agreement between the government, civil society in Mozambique, and the World Bank and IMF regarding the design of a poverty reduction strategy paper (PRSP). The agreement of Algeria and Iraq to participate in the debt relief programme was also necessary. Diogo needed to ensure that progress toward economic development continued. She considered what might be the best way of achieving agreement on the poverty reduction programme, so as to secure the much needed debt relief for Mozambique.

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Location:
Other setting(s):
2001

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