At long last - Haiti gets $1.2 bn debt cancellation
Haiti this week got debt cancellation under the Heavily Indebted Poor Countries initiative. Debt stock worth $1.2 billion has been written off by the World Bank, Inter-American Development Bank and other multilateral and bilateral creditors which participate in the initiative.
Haiti has endured a long, drawn out process of waiting for the World Bank and IMF to include it in the HIPC initiative, then with its ‘completion point’ repeatedly put back.
Haiti, with 76 per cent of its population below the poverty line, has been paying some $60 to $80 million a year in debt service. The country suffered an aid embargo between 2001 and 2004 as part of an apparent attempt by the U.S. government to destabilize and topple the government. Since then the government has drawn up a Poverty Reduction Strategy Paper – one of the conditions for the HIPC initiative, and signed a Poverty Reduction and Growth Facility agreement with the IMF. The latter resulted in excessively tight fiscal and monetary policy. Another condition was the enactment of a new public procurement law and audits of a sample of government contracts.
With these completion point triggers now in place and pressure from US legislators to act, the World Bank and IMF boards this week granted Haiti debt relief. This is not before time. The island country has suffered from repeated storms in recent years, further devastating agriculture and infrastructure.
Last year, following four consecutive hurricanes, Camille Chalmers, secretary-general of the Plateforme Haïtienne de Plaidoyer pour un Développement Alternatif, commented: "It’s really incomprehensible that the Haitian authorities are unlocking only 35 million gourdes (US$875,000) for victims of the recent weather, while they are forced to pay between US$5 and 6 million for a single month (in debt service)".
Now Haiti is being affected by the economic crisis in the USA, another event for which it is not in any way responsible. PAPDA also points out that “approximately 40% of the debt was contracted during the Duvalier regimes. This is an illegitimate debt since a large part of it was misappropriated and the funds were not used for the public interest”.
Though it has come late, with tough conditions, and with no recognition of illegitimacy, this debt cancellation will be a further step on the way to economic justice for the long-suffering people of Haiti.
Jubilee Debt Campaign would like to thank all our supporters for your work on Haiti in recent years.
This article is based on a report by Eurodad.
- Debt cancellation: only mixed feelings - Haiti Support Group press release, 2 July 2009
