Press Release No. Press Release No.05/289

Press Release: IMF to Extend 100 Percent Debt Relief to Bolivia Under the Multilateral Debt Relief Initiative

December 23, 2005

Mr. Simón Cueva, the Resident Representative of the International Monetary Fund in Bolivia, issued the following statement on December 22 in La Paz:

"Under the Multilateral Debt Relief Initiative, the IMF Executive Board has approved debt relief for Bolivia (see Press Release No 05/286). As part of the Initiative, the IMF will provide 100 percent debt relief on all debt incurred by Bolivia to the IMF before January 1, 2005 that remains outstanding. This amounts to approximately US$231 million, or US$222 million excluding remaining assistance under the Heavily Indebted Poor Country Initiative (HIPC). This debt relief should become available in early January as soon as the remaining consents of the contributors to the PRGF Trust Subsidy Account have been received. The international community has made these additional resources available to help Bolivia make progress toward its Millennium Development Goals (MDGs).

"Bolivia has qualified for IMF debt relief because of its overall satisfactory recent macroeconomic performance, favorable trends in poverty reduction, and sound initiatives to improve public expenditure management. In recent years, Bolivia has enjoyed economic expansion with low rates of inflation, the government has made progress in implementing its poverty reduction strategy, and it has moved forward to address weaknesses in public expenditure management, including efforts to improve the tracking of poverty-related spending. Performance in these areas provides assurance that resources made available under the Multilateral Debt Relief Initiative will be used effectively.

"The IMF looks forward to working with Bolivia to help it develop a strong and stable economy and to make sustained progress toward the MDGs," he said.