Knowledge

Heavily indebted poor countries

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of the world's poor people live are not included: China, India, Indonesia, Brazil, Argentina, Mexico, the Philippines, Pakistan, Nigeria, and the like. In fact, the initiative concerns only 11 percent of the total population of developing countries... It must be noted "that to benefit from the HIPC initiative, the countries concerned had to be free of arrears to the IMF and the World Bank. Countries applying for the HIPC initiative must adopt a Poverty Reduction Strategy Paper (PRSP), under the auspices of the IMF and the World Bank. This document must indicate the use that will be made of the resources made available by this initiative, and contain a certain number of commitments relating to the implementation of classical structural adjustment measures: privatization of public companies, reduction of the salaried workforce, reduction of grants, elimination of government subsidies and deregulation of the labour market. In other words, the whole arsenal of ultra-liberal measures which have contributed to the impoverishment of African populations, to the degradation of social services, to fall in life expectancy of over seven years, to the return of diseases we had thought eradicated, to increased unemployment for young graduates, to setting back industrialisation, and to the creation of chronic food shortages.
31: 489: 229: 687:(PRSP). PRSPs describe the macroeconomic, structural, and social programs that a country will follow to promote economic growth and reduce poverty. A broad range of government, NGO, and civil-society groups must participate in the development of the PRSP to ensure the plan has local support. Under the revised HIPC, a country reaches the decision point once it has demonstrated progress in following its PRSP. The country then reaches its completion point once it has implemented and followed its PRSP for at least one year and has demonstrated macroeconomic stability. 190: 216: 255: 2099: 554: 320: 372: 515: 151: 242: 112: 424: 437: 385: 281: 450: 359: 268: 541: 177: 164: 138: 528: 502: 333: 580: 567: 476: 411: 307: 346: 463: 294: 125: 2087: 398: 203: 625:
the creditor countries. The IMF's share of the cost is currently being funded by the proceeds of gold sales by the organization in 1999, but it estimated that this will not be enough to cover the full cost, and further funding will need to be raised if additional countries such as Sudan and Somalia meet the qualification requirements for entry into the program.
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countries had received any debt relief under HIPC. Second, the six-year program was too long and too inflexible to meet the individual needs of debtor nations. Third, the IMF and the World Bank did not cancel any debt until the completion point, leaving countries under the burden of their debt payments while they struggled to institute
603:) are being considered for entry into the program as of March 2020. At its meeting on 28 June 2021, the IMF's executive board approved a financing plan to help mobilize resources needed for the fund to cover its share of debt relief to Sudan. This occurred after Sudan's civilian-led transitional government and its cabinet led by 666:
Since 1996, the IMF has modified HIPC in several ways, often in response to the shortcomings its critics have highlighted. The IMF first restructured HIPC in 1999. These revisions modified HIPC's threshold requirements. Today, HIPC defines three minimum requirements for participation in the program.
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The criteria used for country selection excluded the mostly highly populated developing countries (for example, Nigeria — 120 million inhabitants — which was on the very first list in 1996) and kept only small countries that are both very poor and heavily indebted... The countries where the majority
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The IMF estimates that the total cost of providing debt relief to the 40 countries currently eligible for the HIPC program would be around $ 71 billion (in 2007 dollars). Half of the funding is provided by the IMF, World Bank, and other multilateral organizations, while the other half is provided by
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As of December 2006, twenty-one countries have reached the HIPC completion point. Nine additional countries have passed the decision point and are working toward completion. Ten other countries carry unsustainable debts according to HIPC standards, but they have yet to reach the decision point. So
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First, as before, a country must show its debt is unsustainable; however, the targets for determining sustainability decreased to a debt-to-export ratio of 150% and a debt-to-government-revenues ratio of 250%. Second, the country must be sufficiently poor to qualify for loans from the World Bank's
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and low-interest loans to cancel or reduce external debt repayments to sustainable levels. This means the nations can repay debts in a timely fashion in the future. To be considered for the initiative, countries must face an unsustainable debt burden that cannot be managed with traditional means.
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In addition to the modified threshold requirements, the 1999 revisions introduced several other changes. First, the six-year structure was abandoned and replaced by a "floating completion point" that allows countries to progress towards completion in less than six years. Second, the revised HIPC
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To receive debt relief under HIPC, a country must first meet HIPC's threshold requirements. At HIPC's inception in 1996, the primary threshold requirement was that the country's debt remains at unsustainable levels despite full application of traditional, bilateral debt relief. At the time, HIPC
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Further progress towards debt relief was announced on December 21, 2005, when the IMF granted preliminary approval to an initial debt relief measure of US $ 3.3 billion for 19 of the world's poorest countries, with the World Bank expected to write off the larger debts owed to it by 17 HIPCs in
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In 2001, the IMF introduced another tool to increase HIPC's effectiveness. Under the new practice of "topping up," countries that unexpectedly suffer economic setbacks after the decision point due to external factors, such as rising interest rates or falling commodity prices, are eligible for
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Critics soon began to attack HIPC's scope and its structure. First, they criticized HIPC's definition of debt sustainability, arguing that the debt-to-export and debt-to-government-revenues criteria were arbitrary and too restrictive. As evidence, critics highlighted that, by 1999, only four
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allows for interim debt relief so that countries begin to see partial relief before reaching the completion point. Third, the PRGF heavily modified ESAF by curtailing the number and detail of IMF conditions and by encouraging greater input from the local community into the program's design.
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of utilities tended to raise the cost of services beyond the citizens' ability to pay. Finally, critics attacked HIPC as a program designed by creditors to protect creditor interests, leaving countries with unsustainable debt burdens even upon reaching the decision point.
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One of PRGF's goals is to ensure that impoverished nations re-channel the government funds freed from debt repayment into poverty-reduction programs. To that end, each country's PRGF program is modeled around a
675:(PRGF, the successor to ESAF), which provide long-term, interest-free loans to the world's poorest nations. Lastly, the country must establish a track record of reforms to help prevent future debt crises. 2066: 2071: 943: 96:
Assistance is conditional on the national governments of these countries meeting a range of economic management and performance targets and undertaking economic and social reforms.
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In 2008, some analysts showed that the HIPC initiative had failed, and failed miserably. One aspect behind the failure, according to the Nigerien journalist Moussa Tchangari:
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HIPC addressed its shortcomings by expanding its definition of unsustainable debts, making greater relief available to more countries, and by making relief available sooner.
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Inadequate debt relief for such countries means that they will need to spend more on servicing debts, rather than on actively investing in programs that can reduce poverty.
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far, the IMF and World Bank have approved $ 35 billion of HIPC debt relief. Five countries have received an additional $ 1.6 billion in "topping up" assistance since 2001.
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E. Carrasco, C. McClellan, & J. Ro (2007), "Foreign Debt: Forgiveness and Repudiation" University of Iowa Center for International Finance and Development E-Book
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considered debt unsustainable when the ratio of debt-to-exports exceeded 200-250% or when the ratio of debt-to-government revenues exceeded 280%.
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37 countries have completed the program and had their external debt cancelled in full, after Somalia passed the Completion Point in 2020.
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The HIPC Initiative was initiated by the International Monetary Fund and the World Bank in 1996, following extensive lobbying by
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HIPC Debt Relief: Myths and Reality (Jan Joost Teunissen and Age Akkerman (eds.), Fondad, 2004, book, pdf)
1555: 1523: 1254: 990: 77: 1493: 1438: 1249: 1648: 1388: 1024: 910: 30: 1932: 1565: 1503: 1144: 967: 195: 1970: 1550: 1301: 1701: 1498: 1428: 1234: 876: 2030: 2012: 1797: 1582: 1378: 1291: 1275: 959: 221: 1937: 1577: 1453: 1259: 1224: 65: 8: 2002: 1992: 1286: 1199: 1638: 1593: 1468: 1239: 1055: 1011: 638:. Fourth, the ESAF conditions often undermined poverty-reduction efforts. For example, 635: 51: Countries eligible for HIPC relief but not yet meeting the necessary conditions. 1924: 1668: 1633: 1244: 1065: 800: 785: 2091: 2007: 1161: 786:
Factsheet: Debt Relief Under the Heavily Indebted Poor Countries (HIPC) Initiative
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The 37 countries that have so far received full or partial debt relief are:
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University of Iowa Center for International Finance & Development.
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The states recognized as the heavily indebted poor countries (HIPC).
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implemented tough economic reforms to reach the decision point.
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List of countries by percentage of population living in poverty
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increased debt forgiveness above the decision-point level.
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Patents, trademarks, and industrial design filing activity
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World Bank, January 11, 2018. Accessed: December 29, 2021.
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have classified them as eligible for special assistance.
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IMF and World Bank classification for special eligibility
1623: 838:"IMF approves financing plan of debt relief to Sudan" 894: 45: Countries qualifying for partial HIPC relief. 1337:United Nations Industrial Development Organization 1327:United Nations Conference on Trade and Development 2116: 1514:South Asian Association for Regional Cooperation 1484:Community of Latin American and Caribbean States 911:"IMF approves debt relief for poorest countries" 872: 870: 868: 866: 864: 862: 860: 858: 39: Countries qualifying for full HIPC relief. 1200:India–Brazil–South Africa Dialogue Forum (IBSA) 1180:Brazil–Russia–India–China–South Africa (BRICS) 781: 779: 777: 775: 773: 771: 1609: 1322:New World Information and Communication Order 975: 944:Official HIPC Initiative website (World Bank) 899:. Monthly Review Press U.S. pp. 178–186. 855: 768: 2036:Number of broadband Internet subscriptions 1616: 1602: 982: 968: 1509:South Atlantic Peace and Cooperation Zone 658: 29: 2135:Measurements and definitions of poverty 1265:OPEC Fund for International Development 14: 2130:Third World debt cancellation activism 2117: 1474:Association of Southeast Asian Nations 788:- The IMF - accessed December 29, 2021 1597: 963: 673:Poverty Reduction and Growth Facility 669:International Development Association 1624:Economic classification of countries 1459:African, Caribbean and Pacific Group 1332:United Nations Development Programme 1230:Asian Infrastructure Investment Bank 796: 794: 753: 751: 720:Multilateral Debt Relief Initiative 24: 1307:Global System of Trade Preferences 801:"Heavily Indebted Poor Countries," 25: 2151: 1943:Research and development spending 932: 897:Debt, The IMF, and The world Bank 791: 748: 2140:Economic country classifications 2097: 2085: 1986:planetary pressures–adjusted HDI 1862:List of countries by median wage 1857:Employee compensation (per hour) 1317:New International Economic Order 1297:Infrastructure-based development 685:Poverty Reduction Strategy Paper 578: 565: 552: 539: 526: 513: 500: 487: 474: 461: 448: 435: 422: 409: 396: 383: 370: 357: 344: 331: 318: 305: 292: 279: 266: 253: 240: 235:Democratic Republic of the Congo 227: 214: 201: 188: 175: 162: 149: 136: 123: 110: 76:. Because of these factors, the 1644:Heavily indebted poor countries 1439:G33 developing countries (G-33) 1135:World Conference against Racism 1030:Heavily indebted poor countries 1020:Landlocked developing countries 709:Central Emergency Response Fund 610: 58:heavily indebted poor countries 18:Heavily Indebted Poor Countries 1659:World Bank high-income economy 1519:Small Island Developing States 1312:Protocol on Trade Negotiations 903: 888: 830: 806: 91:and other bodies. It provides 13: 1: 1429:G20 developing nations (G-20) 895:Toussaint and Millet (2010). 741: 595:An additional two countries ( 1998:Percentage living in poverty 1654:Newly industrialized country 1489:International Solar Alliance 1051:Newly industrialized country 726:Millennium Development Goals 628: 99: 7: 1948:Stock market capitalization 1914:Financial assets per capita 1556:International Monetary Fund 1255:Common Fund for Commodities 711:– humanitarian fund by UNGA 702: 78:International Monetary Fund 10: 2156: 1494:Melanesian Spearhead Group 1250:Caribbean Development Bank 1194:(BRICS minus South Africa) 619: 2125:International development 2080: 2054: 2021: 1961: 1922: 1892: 1835: 1796: 1747: 1710: 1700: 1667: 1649:Least developed countries 1629: 1532: 1397: 1389:World Health Organization 1345: 1273: 1212: 1170: 1110: 1101: 1064: 1038: 1025:Least developed countries 1010: 1001: 2041:Number of Internet users 1933:Gross National Happiness 1566:World Trade Organization 1504:Polynesian Leaders Group 196:Central African Republic 1971:Human Development Index 1551:Global financial system 1302:Sustainable development 991:South–South cooperation 2067:Per capita (creditors) 2046:Smartphone penetration 1702:Gross domestic product 1669:Three/Four-World Model 1367:Pharmaceutical patents 1235:Asian Development Bank 882:July 31, 2008, at the 659:Responses to criticism 656: 53: 2031:ICT Development Index 2013:Social Progress Index 1798:Gross national income 1583:Global digital divide 1469:Afro–Asian Conference 1379:Test data exclusivity 1292:Flying geese paradigm 765:. Web. 10 Sept. 2015. 651: 495:SĂŁo TomĂ© and PrĂ­ncipe 222:Republic of the Congo 33: 2092:Economics portal 2072:Per capita (debtors) 1938:Net material product 1578:Financial regulation 1454:Non-Aligned Movement 1260:New Development Bank 1225:Asian Clearing Union 1186:(BRICS minus Russia) 68:with high levels of 66:developing countries 64:) are a group of 39 2058:investment position 2003:Human Capital Index 1993:Human Poverty Index 1981:inequality-adjusted 1782:per person employed 1287:Developmental state 2056:Net international 1807:Nominal per capita 1725:past and projected 1639:Developing country 1499:North–South Summit 1240:Arab Monetary Fund 1056:Transition economy 763:MasterFILE Premier 636:structural reforms 54: 2112: 2111: 1963:Human development 1925:national accounts 1827:Disposable income 1822:Per capita growth 1792: 1791: 1634:Developed country 1591: 1590: 1208: 1207: 1097: 1096: 16:(Redirected from 2147: 2104:World portal 2102: 2101: 2090: 2089: 2008:Household income 1902:Wealth per adult 1765:future estimates 1708: 1707: 1618: 1611: 1604: 1595: 1594: 1384:Doha Declaration 1195: 1187: 1162:Post-Western era 1108: 1107: 1046:Emerging markets 1008: 1007: 984: 977: 970: 961: 960: 926: 925: 923: 922: 907: 901: 900: 892: 886: 874: 853: 852: 850: 849: 834: 828: 827: 825: 824: 810: 804: 798: 789: 783: 766: 755: 584: 582: 581: 571: 569: 568: 558: 556: 555: 545: 543: 542: 532: 530: 529: 519: 517: 516: 506: 504: 503: 493: 491: 490: 480: 478: 477: 467: 465: 464: 454: 452: 451: 441: 439: 438: 428: 426: 425: 415: 413: 412: 402: 400: 399: 389: 387: 386: 376: 374: 373: 363: 361: 360: 350: 348: 347: 337: 335: 334: 324: 322: 321: 311: 309: 308: 298: 296: 295: 285: 283: 282: 272: 270: 269: 259: 257: 256: 246: 244: 243: 233: 231: 230: 220: 218: 217: 207: 205: 204: 194: 192: 191: 181: 179: 178: 168: 166: 165: 155: 153: 152: 142: 140: 139: 129: 127: 126: 116: 114: 113: 50: 44: 38: 21: 2155: 2154: 2150: 2149: 2148: 2146: 2145: 2144: 2115: 2114: 2113: 2108: 2096: 2084: 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2069: 2063: 2061: 2052: 2051: 2049: 2048: 2043: 2038: 2033: 2027: 2025: 2023:Digital divide 2019: 2018: 2016: 2015: 2010: 2005: 2000: 1995: 1990: 1989: 1988: 1983: 1978: 1967: 1965: 1959: 1958: 1956: 1955: 1950: 1945: 1940: 1935: 1929: 1927: 1920: 1919: 1917: 1916: 1911: 1910: 1909: 1898: 1896: 1890: 1889: 1887: 1886: 1885: 1884: 1879: 1874: 1864: 1859: 1854: 1853: 1852: 1841: 1839: 1833: 1832: 1830: 1829: 1824: 1819: 1817:PPP per capita 1814: 1809: 1803: 1801: 1794: 1793: 1790: 1789: 1787: 1786: 1785: 1784: 1779: 1774: 1773: 1772: 1756: 1754: 1745: 1744: 1742: 1741: 1740: 1739: 1734: 1733: 1732: 1716: 1714: 1705: 1698: 1697: 1695: 1694: 1689: 1684: 1679: 1673: 1671: 1665: 1664: 1662: 1661: 1656: 1651: 1646: 1641: 1636: 1630: 1627: 1626: 1621: 1620: 1613: 1606: 1598: 1589: 1588: 1586: 1585: 1580: 1575: 1570: 1569: 1568: 1563: 1558: 1548: 1542: 1540: 1533: 1530: 1529: 1527: 1526: 1521: 1516: 1511: 1506: 1501: 1496: 1491: 1486: 1481: 1476: 1471: 1466: 1461: 1456: 1451: 1446: 1441: 1436: 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839: 833: 819: 815: 809: 802: 797: 795: 787: 782: 780: 778: 776: 774: 772: 764: 760: 754: 752: 747: 737: 734: 732: 729: 727: 724: 721: 718: 716: 713: 710: 707: 706: 700: 696: 692: 688: 686: 680: 676: 674: 671:or the IMF's 670: 664: 655: 650: 647: 644: 641: 640:privatization 637: 626: 617: 608: 606: 602: 598: 593: 587: 576: 574: 563: 561: 550: 548: 537: 535: 524: 522: 511: 509: 498: 496: 485: 483: 472: 470: 459: 457: 446: 444: 433: 431: 420: 418: 407: 405: 394: 392: 381: 379: 368: 366: 355: 353: 342: 340: 329: 327: 326:Guinea-Bissau 316: 314: 303: 301: 290: 288: 277: 275: 264: 262: 251: 249: 238: 236: 225: 223: 212: 210: 199: 197: 186: 184: 173: 171: 160: 158: 147: 145: 134: 132: 121: 119: 108: 107: 105: 97: 94: 90: 85: 83: 79: 75: 74:debt overhang 71: 67: 63: 59: 32: 19: 1845:Average wage 1751:power parity 1692:Fourth World 1682:Second World 1643: 1524:South Centre 1479:Colombo Plan 1089:Fourth World 1079:Second World 1029: 1003:Global South 919:. Retrieved 917:. 2005-12-21 914: 905: 896: 890: 846:. Retrieved 844:. 2021-05-11 841: 832: 821:. Retrieved 817: 808: 762: 758: 697: 693: 689: 681: 677: 665: 662: 652: 648: 645: 632: 623: 614: 611:Requirements 594: 591: 521:Sierra Leone 157:Burkina Faso 103: 86: 61: 57: 55: 1812:Real income 1749:Purchasing 1687:Third World 1677:First World 1535:North–South 1278:development 1103:Geopolitics 1084:Third World 1074:First World 1012:Development 761:(1998): 1. 759:GAO Reports 731:Odious debt 695:mid-2006." 261:Ivory Coast 118:Afghanistan 93:debt relief 2119:Categories 1976:by country 1777:per capita 1770:per capita 1760:By country 1737:per capita 1730:per capita 1720:By country 1573:Fair trade 1561:World Bank 1401:and groups 1360:biosimilar 1150:Durban III 921:2007-08-10 848:2021-06-29 823:2021-06-07 742:References 443:Mozambique 430:Mauritania 391:Madagascar 82:World Bank 1372:criticism 1276:Trade and 1145:Durban II 629:Criticism 456:Nicaragua 100:Countries 1245:BancoSur 1140:Durban I 1120:Cold War 880:Archived 703:See also 547:Tanzania 365:Honduras 274:Ethiopia 183:Cameroon 1712:Nominal 1213:Finance 1039:Markets 842:Reuters 620:Funding 597:Eritrea 534:Somalia 508:Senegal 378:Liberia 248:Comoros 170:Burundi 144:Bolivia 70:poverty 2060:(NIIP) 1923:Other 1907:Europe 1894:Wealth 1877:Europe 1872:Canada 1850:Europe 1537:divide 1184:BASIC 722:(MDRI) 586:Zambia 583:  573:Uganda 570:  557:  544:  531:  518:  505:  492:  482:Rwanda 479:  466:  453:  440:  427:  417:Malawi 414:  401:  388:  375:  362:  349:  339:Guyana 336:  323:  313:Guinea 310:  297:  287:Gambia 284:  271:  258:  245:  232:  219:  206:  193:  180:  167:  154:  141:  128:  115:  49:  43:  37:  1837:Wages 1800:(GNI) 1753:(PPP) 1704:(GDP) 1192:BRIC 1172:BRICS 939:Oxfam 601:Sudan 469:Niger 352:Haiti 300:Ghana 131:Benin 1449:G-90 1444:G-11 1434:G-24 1419:G-15 1414:G-77 1220:Debt 993:and 599:and 560:Togo 404:Mali 209:Chad 89:NGOs 72:and 62:HIPC 56:The 1424:D-8 1409:G-5 818:IMF 2121:: 913:. 857:^ 840:. 816:. 793:^ 770:^ 750:^ 1617:e 1610:t 1603:v 983:e 976:t 969:v 924:. 851:. 826:. 60:( 20:)

Index

Heavily Indebted Poor Countries

developing countries
poverty
debt overhang
International Monetary Fund
World Bank
NGOs
debt relief
Afghanistan
Benin
Bolivia
Burkina Faso
Burundi
Cameroon
Central African Republic
Chad
Republic of the Congo
Democratic Republic of the Congo
Comoros
Ivory Coast
Ethiopia
Gambia
Ghana
Guinea
Guinea-Bissau
Guyana
Haiti
Honduras
Liberia

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