The HIPC initiative for debt relief in the poorest countries has been extended to cover more countries. Zambia is one the countries accepted under the enhanced initiative for a debt relief of US$ 3.8 billion. In this paper, the possible effects of this debt relief are analysed using a social accounting matrix as a tool of analysis. Two alternative approaches were chosen: income transfers, and direct production support in the amount of the annual decrease in the debt service. Experiments show how debt service relief can contribute to national growth targets. They also show the different effects on household income, resulting from the alternative expenditure patterns. Income transfer scenario creates greater increase in the household income, at the expense of production value.
|Title of host publication||WIDER Development Conference of Debt Relief|
|Subtitle of host publication||Helsinki, 17-18 August 200|
|Publication status||Published - 2001|
|MoE publication type||B3 Non-refereed article in conference proceedings|
|Series||WIDER Discussion Paper|