22.Subsection (2) applies to the debts of countries that have reached Decision Point under the Initiative. It defines the relevant proportion of a debt by referring to the reduction in accordance with the Initiative. Practice under the Initiative is as follows. At Decision Point, the IMF and World Bank calculate the percentage reduction which is required from all creditors holding debts included in the Initiative in order to reduce the country’s indebtedness to a sustainable level. These organisations publish within their Decision Point document the Common Reduction Factor. This sets the reduction expected from all creditors after they have provided so-called traditional relief of 67%. The amount the debt would be if it were reduced in accordance with the Initiative is the amount it would be if firstly reduced by the application of traditional relief at 67% and secondly if further reduced by the proportion set by the Common Reduction Factor.
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