Debt cancellation is the legal cancellation of a loan agreement by a creditor.

Debt service is the total amount, (principal and interest), a country spends;
the amount paid may fall short of payment due.

G8: The Group of Eight most powerful countries in the world (Canada, France, Germany, Italy, Japan, Russia, UK, and USA)

GNP/GDP: Gross National Product/Gross Domestic Product - measures of the total economic output of a country in one year. GNP measures output by the country's citizens both at home and abroad. GDP measures the output of the country as a physical entity.

HIPC: the Heavily Indebted Poor Countries Initiative. This was launched in
1996 by the G8 and IMF and World Bank in an attempt to deal with the debt
crisis. In 1999 HIPC was altered in an attempt to make it better. To get debt relief
countries must produce national development plans or PRSPs (see below). Up to
42 countries (see Heavily Indebted Poor Countries page) are eligible to be
considered, but not all will necessarily receive debt relief. Six years after it was
first introduced, HIPC has failed to get countries out of crisis. This is because the
initiative is very complicated and very slow (to-date only 6 countries, Bolivia,
Mozambique, Tanzania and Uganda have received debt relief). Furthermore,
HIPC does not cancel enough debt to get countries out of the cycle of having to
take out new loans to pay off old loans.

PRSPs: Poverty Reduction Strategy Papers. These are national development
plans which governments in low-income countries are required to produce in order to receive debt reduction under the HIPC initiative or cheap loans from the IMF and World Bank. The IMF and World Bank claim that PRSPs are different than SAPs (see below) but studies have shown that, in reality, the programmes in these plans are very similar to SAPs.

SAPs: Structural Adjustment Programmes. These programmes, favoured by the
IMF and World Bank since they first got involved with the debt crisis in the 1980s,
essentially change the nature of a country's economy and the role of its
government. Export industries are promoted and currencies are devalued to
make exports cheaper overseas. Government spending is reduced and state
industries are privitised. The aim is to ensure the repayment of debt. Countries
have had to follow these programmes to get any new loans or aid or to get debt
relief under HIPC. In Africa SAPS are also known as Stomach Adjustment
Programmes or Suffering for African People.