G7 supports debt cancellation for Haiti
9 February 2010Thanks to action taken by thousands of people in the UK and across the world, the G7 announced on 6 February that it would work to cancel all of Haiti’s debts. This is a welcome statement, but we need to keep up pressure to make sure debt relief is delivered. As the spotlight on Haiti fades, we fear the promise of debt cancellation might become less of a priority – or even turn into a bad deal for Haiti.
In particular we are concerned that debt cancellation could mean:
- Less aid for other poor countries;
- Haiti being forced to meet a set of economic conditions;
- The cancellation being taken from Haiti’s own aid allocation;
- The restructuring rather than total cancellation of Haiti’s debt
In addition, we need to make sure aid to Haiti is genuinely used to rebuild the Haitian economy – not to line the pockets of Western contractors.
A recent report from Eurodad finds that, as things currently stand, Haiti owes $677 million to the international financial institutions. Without cancellation, Haiti is expected to pay $350 million in debt repayments to its creditors over the next 9 years - $105 million to the International Monetary Fund.
We do not believe Haiti should be paying any debts to rich countries or multilateral banks. Debt cancellation should mean cancellation.