Oroitz Lafuente

Bolivia's External Debt Burden: Convenience of Debt Relief Oroitz Lafuente

The World Bank and IMF announced that they will forgive total amounts of external debt to several countries inside the HIPC initiative, being Bolivia one of these countries. In this book we analyse if Bolivia really needs to receive this debt relief or can repay its external debt by itself. First, we discuss if it is convenient for a country to receive aids as debt relief. Second, we explain Bolivia's actual situation and we apply two solvency models to it: Simonsen's dynamic model and the Analytical model. In this way we see if the country is solvent enough to handle a sustainable external debt. According to the results that we get in this research we conclude that it is neither neccesary nor convenient for Bolivia to receive debt relief.