Steve Radelet with President Sirleaf
Steve goes on to explain the origins of the commerical debt buildup and the key steps that had to be taken to arrive at the debt deal. In highlighting the key factors that underpinned the successful deal, Steve notes:
- The official debt reduction process known as "HIPC" imposed restrictions limiting a country like Liberia from paying more than a very small percent of the face value of debt without undermining the HIPC debt process.
- President Sifleaf's international reputation and credibility made a big difference.
- The liquidity-constraint financial institutions were more eager to accept readily available cash from the debt deal in the wake of the global financial crisis.
President Sirleaf reflected on what this debt write-off will mean for Liberia: "The successful resolution of this inherited debt, which had ballooned through interest and penalty charges during a period when my country was wracked by civil war, is an important step on our road to recovery. This puts us on a firmer footing to attract investment and accelerate economic growth.”
Congratulations to Liberia.