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Debt cancellation for HaitI
After many decades (indeed centuries) of the international community failing Haiti, the country finally received debt cancellation via HIPC last Summer. Around $1.2 billion was cancelled (an amount that had been incurring repayment and servicing charges of around £1million a week through the food crisis of 2008).
However, when the earthquake struck in January this year, we realised that this was not the end of Haiti’s debt problems – because HIPC only cancels debts contracted before a certain period (2004 in this case). Haiti had been forced to run-up more debt in the interim – a result, obviously, of insufficient grant-aid being given to the country (most loans had come from the multilaterals).
We were joined by many other organisations in calling for total cancellation of Haiti’s debts. G7 leaders received 450,000 signatures from across the world demanding full cancellation. As a result the G7 promised to work towards full cancellation in the multilaterals in early February.
This is unprecedented and clearly shows the weaknesses of the current debt relief schemes. As such, G7 countries do not want to do something which could set precedent for the future and are being careful about the modalities of cancellation. So we still need to keep an eye on things.
So far the Inter-American Development Bank have agreed to cancel $479 million in debts and to offer $2 billion in grants over the next 10 years. Venezuela has already promised to cancel its $295 million petrocaribe loan. Next steps are to ensure IMF cancellation – which amounts to $165.6 billion (including a new loan of $100million) and the World Bank at $38.8 million. The IMF are drawing up a
paper for discussion at the Spring Meetings of the Bank and Fund (April 24-25) but a decision is not expected until later. We need to watch carefully for any conditions effectively attached to this through a new programme.
As shown in a EuroDad report on the issue, Haiti owed (in January 2010):
(in millions of dollars)
Multilateral
Inter-American Development Bank 417.5
IMF 165.6
World Bank 38.8
Other 54.9
Bilateral
Venezuela 295.2
Taiwan 89.7
Other 122.1
Total 1,247
The IMF and British government were initially reluctant to examine Haiti's debt, saying that it would in effect pay nothing until 2012. While true, the EuroDad report revealed that the institution would expect Haiti to pay $105 million between 2010 and 2018.
More widely, we are concerned that the assistance pouring into Haiti benefits Haitians rather than over-charging mega-contractors. A recent conference in Miami, organised by the Orwellian-named International Peace Operations Association – an umbrella groups for private military companies – looked at corporate opportunities in reconstruction and development.
We will continue to monitor the situation on Haiti and appreciate any support with this
work. We will continue pressing the IMF for speedy cancellation, ensuring that necessary
funds come from developed countries and is not attached to additional conditions. |
Jubilee Debt Campaign, 30/03/2010 |
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