Debt and financing

Since the 1980s, many developing countries, especially in sub-Saharan Africa, have struggled with a debt burden that has exceeded their financial capacities. The 'debt crisis' is the result of a combination of excessive borrowing, excessive lending, bad investments and economic shocks beyond these countries' control. Various international initiatives are now bringing about a massive cancellation of the poorest countries' debts, in return for which these countries have to implement economic reforms and active anti-poverty measures. The Heavily Indebted Poor Countries Initiative (HIPCI) and the Multilateral Debt Relief Initiative (MDRI) will reduce the debt burden of these countries to a very low level.

As well as participating in these initiatives, Norway will unilaterally cancel debts remaining from the ship export campaign, a failed development policy which ran from 1976 to 1980. Norway is thereby acknowledging that it shares political responsibility for the debt problems of developing countries. Norway is one of the first countries to take a step of this kind.

Norway is also seeking to generate additional revenue for development by advocating 'innovative finance mechanisms', such as international procurement rules for vaccines and medicines for developing countries, and solidarity contributions on air traffic.