Venezuela cancels Haiti’s debt
Debt campaigners (1) in the UK renewed their call on the International Monetary Fund (IMF) to cancel all of Haiti’s outstanding debts, after President Hugo Chavez of Venezuela announced the cancellation of Haiti’s debts to his country in the wake of the earthquake. Campaigners fear that debt cancellation will not be discussed at today’s IMF meeting, which will instead content itself with sanctioning a new $100million loan (2) proposed for the country.
Haiti’s debt to Venezuela was run up under the Petrocaribe initiative which offers members the chance to purchase oil on preferential terms. President Chavez announced the move in a speech to Foreign Ministers of the ALBA group of Latin American countries on Monday (3). The cancellation would account for approximately $295 million, about one third of Haiti's outstanding international debt. Chavez said that "Haiti has no debt with Venezuela -- on the contrary, it is Venezuela that has a historic debt with Haiti”, referring to the support that Haiti gave to the Venezuelan independence movement.
Venezuela’s move now increases pressure on other creditors, most notably the IMF whose Executive Board meets today. Although IMF head Dominique Strauss-Kahn had given his support for efforts to “delete all the Haitian debt, including our new loan", Monday’s donor summit in Montreal only suggested a payment-freeze and an interest-free period of 5 years.
James Picardo of Jubilee Scotland said “We are concerned that though the IMF seemed to be supporting debt cancellation last week, it is now backsliding on total cancellation – possibly because of opposition from member governments. We need to make sure this is not kicked into the long grass until such a time as Haiti is no longer in the news.”
Nick Dearden of Jubilee Debt Campaign said “The actions of Venezuela – itself a developing country – have highlighted the inadequacy of the IMF's response. Haiti needs all of its debts cancelled immediately and unconditionally if it to have any chance of development.”
For more information contact:
England: Nick Dearden, Jubilee Debt Campaign 0207 324 4724, 07932 335 464
Scotland: James Picardo, Jubilee Scotland 0131 225 4321
(1) Jubilee Scotland campaigns in Scotland for the cancellation of all unpayable and unjust poor-country debt. For more information go to www.jubileescotland.org.uk
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) The IMF has proposed $100million loan to Haiti but giving new loans to disaster-stricken country has provoked opposition from campaigners, leading to Strauss-Kahn proposing to also ‘cancel’ the loan once it had been given – essentially turning it into a grant: www.imf.org/external/pubs/ft/survey/so/2010/NEW012010A.htm.
(3) ALBA is the Bolivarian Alliance for the Americas, a trading agreement, which consists of 8 members including Venezuela.