Haiti summit must wipe out $890m debt
Debt campaigners are calling on the Donor Summit on Haiti, taking place in Montreal on Monday, to agree a total cancellation of Haiti's debt and large-scale grant funding to reconstruct the country. Jubilee Debt Campaign (1) is concerned that the IMF and World Bank may take ‘half-measures' such as a payments moratorium, which will still see Haiti paying off debts for many years to come.
Hundreds of thousands of campaigners around the world are believed to have called for the full cancellation of Haiti's debts in the wake of the earthquake which is believed to have left 200,000 people dead. Jubilee Debt Campaign has welcomed statements from the International Financial Institutions that they are considering ‘debt relief'. But they point to similar relief delivered in previous disasters like the Tsunami and Hurricane Mitch wherein relief was given in the form of a moratorium, but with interest still accumulating, leaving countries paying more debt once the disaster was over.
The group also warned that the catastrophe must not be used an excuse for further outside interference in Haiti's economy.
Nick Dearden, Director of Jubilee Debt Campaign said:
"The response of ordinary people around the world to the terrible disaster in Haiti has been overwhelming. Governments, the IMF and World Bank should have got a wake up call. Nothing short of total debt cancellation is acceptable if Haiti is to develop, not the half measures we saw in response to the Asian Tsunami and Hurricane Mitch."
"Freeing Haiti of all of its debt without conditions will be the first step to ensuring the people of that country can take control of their own economy and own resources. Many would argue that it is rich countries that owe Haiti a debt - for centuries of looting, slavery, mountains of debt and forced free market policies. It is time for rich countries to repay this debt to Haiti, a country which has given them so much."
The state of play with debt cancellation:
Haiti owes $891 million in debt.
The IMF has said:
"The most important thing is that the IMF is now working with all donors to try to delete all the Haitian debt, including our new loan. If we succeed-and I'm sure we will succeed-even this loan will turn out to be finally a grant, because all the debt will have been deleted."
This is an unprecedented statement, but final decisions will not be taken until the IMF meets next week, and some governments are believed to be unhappy with debt cancellation. The IMF also needs to drop all conditions on Haiti and ultimately leave development to other organisations which have a better track record. (2)
The Inter-American Development Bank is expected to approve $128 of grants to Haiti but is still Haiti's biggest creditor, with $441 million owed to it. It has said that it's "Board of Governors could consider the possibility of providing further debt relief to Haiti", but as the Bank now accepts that Haiti should receive grants rather than loans, there seems no justification for maintaining this outstanding debt. (3)
The World Bank has announced $100 million in grants to Haiti and said it will waive payments for five years on the $38m owed to it and is "working to find a way forward to cancel the remaining debt." (4)
Other creditors include:
Taiwan's President Ma Ying-jeou claims that Taiwan's loans are from private banks, but that he will ask the foreign ministry how he can help to cancel its debt. (5)
Venezuela is donating unlimited fuel to Haiti, as well as relief aid, but is also a large creditor to Haiti and, although a developing country itself, is being called on to wipe out Haiti's debt. (6)
For more information contact:
Nick Dearden, Director, Jubilee Debt Campaign, +44 (0) 7932 335464
(1) Jubilee Debt Campaign is a UK coalition demanding 100% cancellation of unpayable and illegitimate developing country debts. For more information see www.jubileedebtcampaign.org.uk.
(2) IMF Chief Calls for ‘Marshall Plan' for Shattered Haiti January 20, 2010 http://www.imf.org/external/pubs/ft/survey/so/2010/NEW012010A.htm
(3) IDB President visits Haiti, calls for expanded aid, January 18, 2010
(4) World Bank Statement on Haiti Debt, Press Release No. 2010/236/LAC, January 21, 2010
(5) Taiwan to consider canceling Haitian debt, January 19, 2010
(6) Venezuela Steps Up Aid Effort to Haiti, Questions U.S. Military Deployment, January 20, 2010, http://www.venezuelanalysis.com/news/5086