The HIPC-initiative and poverty alleviation : An analysis of Mozambique

Abstract: This paper deals with the relationship between the highly indebted poor countries (HIPC) debt relief initiative and the incidence of poverty in Mozambique. In order to get assistance under the enhanced HIPC initiative, a plan for reducing poverty has to be provided. The underlying thought is that the resources freed up due to debt relief, should go to increased social spending targeted at poverty alleviation. Mozambique’s debt stock has been brought done due to the HIPC initiative and the average economic growth has been high, which gives a good ground for poverty alleviation. However, the evidence in this paper shows a mixed picture of the progress made in poverty alleviation. The household surveys made in 1996-97 and in 2002-03 show that the incidence of poverty has been reduced satisfactory. Nontheless, expenditure on most of the priority sectors, including education, health, HIV/AIDS, infrastructure, government and other sectors, have been more or less the same since 1999, indicating that the authorities have not lived up to the expectations. Despite that, there has been a positive progress in the social sectors including education, water and sanitation and to some extent even health. The sectors that have developed less satisfying are HIV/AIDS and gender equity.