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This report tracks the progress of poor countries towards debt sustainability under the HIPC initiative; as well as likely progress towards meeting the Millennium Development Goals (MDGs).

The article concludes that:

• the British Chancellor’s welcome proposal for an increase in OECD aid by $50bn a year will prove ineffectual in achieving the Millennium Development Goals in the HIPC countries, unless there is 100% cancellation of the debts of these countries
• a high proportion of aid flows are currently being directed towards unproductive debt repayments to institutions like the IMF and World Bank, and not to genuine aid for the poorest people of the world. We believe that this will not be welcome news to OECD taxpayers
• to achieve the first MDG of halving the proportion of people living in extreme poverty in the HIPC countries will not only require 100% debt cancellation; but also an increase in the current level of aid to the HIPCs from $15bn to $46bn a year
• this is less than the increase in US military spending in one year, 2003, and would cost each person in the developed world only $1 per week, or $50 a year
• the world would be a much more secure place if these resources were used for development, rather than for destruction
• even if the first goal is not acheived, protectiong the human righs of millions of people in the HIPC countries will require spending on health, education, water and other social services to meet the other Millenium Development Goals
• these expenditures alone will require 100% debt cancellation, plus additional aid of $16.5 bn

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