Call for debt cancellation for Haiti

haiti After the terrible earthquake in Haiti, which has left more than 70,000 people dead, Civil Society Globally are calling for an urgent cancellation of all of Haiti’s remaining debt. They have also criticised the International Monetary Fund (IMF) for extending new loans to the country at a time when significant grant-aid is required.

Haiti is of the world´s poorest nation with an enormous debt burden which goes back to the 1820s when France required the former slave colony to pay enormous sums for its freedom. Haiti has had a troublesome history with dictatorship and corruption.

During the last couple of years Haiti has had some hope regarding its economic performance. In June 2009, Haiti secured $1.2 billion in debt cancellation from its major creditors when it reached completion point in the Heavily Indebted Poor Countries (HIPC) Initiative. However, Haiti still remains with a debt of more than $800 million.

More than half of Haiti’s outstanding debt is owed to the International Monetary Fund (IMF) and the Inter American Development Bank (IDB). Haiti is projected to pay at least $100 million in debt payments to the IMF and IDB over the next five years unless these debts are cancelled. However, the largest creditors are Venezuela and Taiwan.

CSO has called for debt cancellation for Haiti before the earthquake took place. Yet the devastating situation at this moment highlights the urgency of the situation. All resources for Haiti are needed ant it is needed now. The international community needs to take responsibility and think in the long-term for the future of Haitis people.

The IMF announced last week that it intended to provide $100 million in assistance to the people of Haiti at this time of great need. However, it is far from ideal that the IMF intends to deliver the assistance as a loan, which already has problematic conditions. Disaster relief should always be in the form of grants and not loans.

Call for debt cancellation for Haiti

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