Debt relief for Rwanda: an opportunity for peace-building and reconstruction

Paper is prompted by a growing concern that an unsustainable debt burden is one of the factors which jeopardise reconstruction efforts in Rwanda, and that debt relief could be a crucial element of a wider strategy of international engagement, aimed at encouraging respect for human rights and building peace. The paper argues that existing debt relief mechanisms are not being fully utilised. The dimensions of Rwanda's debt crisis, and the prospects for its relief under the Heavily Indebted Poor Country Initiative (HIPC) are explained in detail in the following pages. As ever, the question of debt relief is a complex one, involving a wide range of creditors and judgements about Rwanda's future debt-servicing capacity. But the bottom line is that the Government spent approximately US$42m on debt-servicing in 1998. In a country where one in three children is not in school, and where the majority of those who are lack essential educational materials, Rwanda spends more on debt than on basic education. At a time when the level of child mortality is rising - in part as a consequence of the destruction of the water and sanitation infrastructure - debt-servicing dwarfs the amount spent on these basic services. It has been estimated that providing clean water to rural communities could save up to 6,000 lives annually. The fact that this could be achieved for less than is currently spent servicing debt speaks volumes about the need for a reordering of priorities, and for a reassessment of current debt relief strategies. [author]