HAITI'S DEBT CANCELLATION
On June 30th, Haiti reached “completion point” in the Heavily Indebted Poor Countries program cancelling $1.2 billion of debt.
This means that $1.2 billion in external debt owed by the impoverished island nation to bilateral and multilateral lenders including the IMF, World Bank, and US government has been cancelled. The Boards of the World Bank and IMF met yesterday to formally approve Haiti’s debt stock cancellation under HIPC and the Multilateral Debt Relief Initiative.
In 2008, Haiti suffered a food and fuel crisis and endured the devastating impact of four hurricanes. In 2009, Haiti faced the severe and negative effects of the recent downturn in the global economy. Now in 2010, the earthquake has caused some of the worst devastation to a country we have seen in years.
Haiti's road to debt cancellation has been long and hard. The country was accepted into the program in 2006, but its efforts to catch up have been hindered by economic policy conditions imposed by the IMF and a string of natural disasters, economic shocks and political unrest.
Haiti was scheduled to send more than $20 million (that’s $1.6 million a month) to the World Bank in 2009 - other lenders like the International Development Bank (IDB) had agreed to write off Haiti’s debt payments but the World Bank did not. But on April 15, 2009, Secretary of State Hillary Clinton pledged $20 million to cover Haiti’s remaining debt payments to the World Bank and Inter American Development Bank. (Read her speech here)
Over half of Haiti’s $1.3 billion debt is for loans granted to Haiti’s dictatorships, especially the brutal and corrupt Duvalier father-son dictatorship. While the US's decision to subsidize Haiti's debt is a victory for the country, Haiti’s onerous and odious debt should still be canceled immediately without conditions, as a matter of justice and as an essential tool in the global fight to end poverty under the Millennium Development Goals (MDGs). Haiti’s debt must still be canceled outright without further delays.
HAITI'S EARTHQUAKE
The earthquake on January 12th has caused unimaginable destruction in Haiti. Already impoverished and struggling, it will be nearly impossible for Haiti to get back on its feet without massive humanitarian and reconstruction assistance. This should come as grants, not loans, so that Haiti does not get again saddled with large debts to no fault of its own. Grant assistance should be provided without harmful economic policy conditionalities like requirements for privatization of services.
While 1.2 billion of Haiti's debt was cancelled in June 2009 thanks to Jubilee supporters' efforts, the country still has $1.051 billion in debt on its books. Why? Because the debt relief agreements from the IMF and other creditors only covered debts acquired up until 2004. So, new loans Haiti has received since then have been adding to its debt. More than half of this total is owed to multilateral banks, including the Inter-American Development Bank and the IMF and the rest is bilateral debt, owed to Venezuela and Taiwan. Over the next 10 years, Haiti is projected to pay more than $100 million to the IMF and IDB - and this is money Haiti simply can't pay now that this tragic earthquake has hit.
In response to the crisis, the International Monetary Fund responded by announcing its intent to give Haiti a $100 million loan. In the context of the crisis, a loan for rescue and redevelopment is completely inappropriate. See Jubilee's January 15th press release. The IMF voted to approve this loan, almost doubling Haiti's debt to the institution, despite verbal commitments to debt cancellation. Read the January 20th press release here.
The US has strong voting power on the Boards of both the IMF and the IDB and should use its influence to secure immediate cancellation of these debts. On February 5th, US Treasury Secretary Timothy Geithner announced his support of debt cancellation and grants, not loans, for Haiti and soon after at the G7 meeting in Canada, finance ministers announced their support as well. Now the international financial institutions have to provide specifics on how this will happen. The announcements are an important step and a victory for Haiti and the debt cancellation movement.
Read Jubilee's press releases here and visit our blog.
WORLD BANK FACTS
JUBILEE PARTNER ORGANIZATIONS
NEWS/BLOGS
2010
Haiti and Debt Cancellation Legislation
Avelino Maestas
Huffington Post, January 14, 2010
How Not to Help Haiti: More Debt, More Deportations
Matthew Kavanagh
Huffington Post, January 15, 2010
Haiti: Freeze Public Wages
Richard Kim
The Notion, The Nation’s Blog, January 15, 2010
Also appeared on NPR under the title Haiti's Recovery, A Repeated Tragedy
Haiti is Waiting
Christina Siun
Firedog Lake, January 16, 2010
Rush to Aid Haiti's Earthquake Victims
One World, January 16, 2009
Cancel Haiti’s Debt
The Rachel Maddow Show, MSNBC
January 18, 2010
Rebuilding Haiti Will Require Full Debt Cancellation, TPS, and Serious Amounts of Direct Aid
Jason Pramas
Open Media Boston, January 18th, 2010
One week later, relief efforts struggle to reach earthquake ...
Free Speech Radio News
January 19th, 2010
2009
Victory for Haiti as Nation Secures $1.2 Billion in Debt Cancellation
Jubilee USA Network
July 1, 2009
Clinton Pledges more than $50ml in aid for Haiti AFP, April 14, 2009
Getting Help to Haiti
By Neil Watkins on Washington Post
February 10, 2009
Haitian President Appeals for Emergency Aid
By Glenn Kessler, Washington Post
February 7, 2009
Haiti's Top 10 Demands to President Barack Obama
January 21, 2009
Congresswoman Waters calls for $300 million in disaster assistance following recent storms
September 12, 2008
Hurricane Response – What Can We Do?
September 9, 2008
Call for debt payment moratorium on food crisis countries
June 3, 2008
As Rising Food Prices Ignite Social Unrest in Haiti, Members of Congress, Faith Leaders, Development Advocates Urge Immediate Debt Cancellation
May 20, 2008
Contributing Factors and International Responses to the Global Food Crisis
May 14, 2008
To Help Haiti recover, Cancel Its Debt
By Marlene Bastien, The Miami Herald
December 14, 2007
Haiti In Life & Debt Struggle
By Owen Bowcott and Charlotte Denny, The Guardian UK
June 27, 2000
Haiti: Enslaved By Debt
By Marie Clarke, Third World Traveler
Summer 2003
Haiti Debt
By Yves Engler, ZNET
January 12, 2005
Gaming A Life: How Much Is Your Existence Worth?
By monet cooper, Jubilee USA Blog The Debt
October 1, 2007
How to Keep Haiti in Debt
By Shirley Pate, hcvanalysis.wordpress.com via Jubilee USA Blog The Debt
September 20, 2007
Haiti: Struggling to Fight the Devastation of HIV/AIDS in the Face of Debt
By Evelyn Lena Sallah, Blog The Debt
October 10, 2007
Haiti's 'Albatross' of Debt Casts a Shadow on Poverty Reduction
By Joe Emersberger and Jeb Sprague, The Monthly Review Foundation
January 28, 2008
HaitiAction.net
