Organizations Unite to Tell Treasury Secretary Geithner: Cancel Haiti’s Debt Now and No More Debt for Disaster

As International Monetary Fund Board Meets, Jubilee USA Network and Allies Urge the US Government to Use its Leadership to Ensure a Debt-Free Fresh Start for Haiti

For Immediate Release January 26th, 2009

Jubilee USA Network

Contact: Hayley Hathaway, Communications Coordinator 202-783-3566 x100

Today 80 US religious denominations, human rights groups, and development agencies including the Jubilee USA Network, the AFL-CIO, and the ONE Campaign sent a letter to US Treasury Secretary Timothy Geithner, urging him to negotiate immediate debt cancellation for Haiti by the international financial institutions.

As the International Monetary Fund prepares to meet on Wednesday to vote to approve a $100 million emergency loan for Haiti and discuss possible debt cancellation, the groups urge the United States use its leadership to ensure that Haiti’s existing debt be cancelled definitively and that any new money comes in the form of grants, not loans.

“We have welcomed statements from the International Monetary Fund and the Inter-American Development Banks on their consideration of cancellation of Haiti’s remaining debt.  Now it is time for Treasury Secretary Geithner to use his voice and vote on the Executive Boards of the IDB, IMF, and World Bank to secure cancellation of Haiti’s remaining debts,” states the letter.

Last week the IMF committed to debt cancellation, and technically the IMF cannot give grants under their mandate. Currently the proposed loan is interest-free, has no repayments due for five years, and has no policy conditions tied to it. However, groups say it is critical to ensure Haiti will never have to pay it back.

The call for debt cancellation comes the week after Haiti’s devastating earthquake. Haiti is projected to pay at least $100 million in debt payments to these institutions over the next five years unless these debts are cancelled -- and the earthquake now has devastated Haiti’s capacity to generate any revenue to be able to afford these payments. Even after debt relief in June 2009, Haiti remains saddled with a debt of more than $1 billion.

“It would be deplorable and irresponsible for the international community to put Haiti into more debt because of the crisis. Secretary Geithner has an opportunity now to act to allow Haiti a fresh start in the wake of this unimaginable tragedy,” said Ruth Messenger, President of the American Jewish World Service.

Hundreds of thousands of US citizens have signed petitions, called the White House, and written to their local newspapers in support of immediate debt cancellation. Jeff Vogt, Global Economic Policy Specialist, AFL-CIO, states: “The outpouring of support for Haiti during this crisis by people around the world has been inspiring.  It is now time that the international banks follow their lead and cancel Haiti's still substantial debts.  Debt cancellation is among the most immediate and meaningful measures that can be taken.”

More than half of Haiti’s outstanding debt is owed to the Inter American Development Bank (IDB) ($442 million), the International Monetary Fund (IMF) ($165 million), and the World Bank’s International Development Association (IDA) ($39 million) -- institutions where the US government has a significant voice on the Executive Board.

Click here to read the letter in full.
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