FROM THE OFFICE OF PUBLIC AFFAIRS

Treasury Secretary Robert E. Rubin today welcomed the World Bank and IMF decisions to make Uganda the first country to receive final debt relief under the Heavily Indebted Poor Countries (HIPC) debt initiative.

"This initiative supports sustainable development, economic reform and growth," Secretary Rubin said. "Debt relief under the HIPC initiative will provide an important investment in Uganda's future." The Ugandan Government has committed to allocate the resources made available under this initiative to education and health.

Uganda will no longer have to pay $650 million in debt service as a result of the global effort of all of its creditors, including the United States. This culminates a process of economic reforms and debt relief, beginning in 1992 with a 33 percent reduction of eligible debt by Uganda's bilateral creditors in the Paris Club and followed by successively deeper debt reduction. As a result, Uganda's debt service to exports ratio will have been reduced from 73 percent in 1991 to 21 percent in 1998.

"I commend the Ugandan Government for its strong record of reform over the past decade, achieving an average growth rate of about 8 percent in the mid-1990's," Secretary Rubin said.

The United States, the first country to suggest a multilateral debt initiative, has been a strong supporter of the HIPC debt initiative as a complement to existing debt relief mechanisms, which already are providing deep debt relief. The HIPC debt initiative is designed for those countries in need of additional debt relief.

To date, Burkina Faso, Bolivia, Guyana, Cote d'Ivoire, Mozambique, Mali and Guinea-Bissau have been declared by the World Bank and the IMF to be eligible for HIPC debt relief.