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29298: (news) Chamberlain: Haiti eligible for major debt relief (fwd)
From: Greg Chamberlain <GregChamberlain@compuserve.com>
By Gilbert Le Gras
SINGAPORE, Sept 19 (Reuters) - Haiti qualifies for a debt write-off
under a major multilateral relief effort, the International Monetary Fund
said on Tuesday, marking a new stage in donors' attempts to bolster the
poorest country in the Americas.
The IMF said in July that relief under the Highly Indebted Poor
Countries Initiative could be worth $14 million in the first year for the
impoverished, turbulent Caribbean country and could unlock potential
additional contributions worth $22 million.
"We hope that the discussion of decision point at both the IMF board
and Bank board takes place in early November. At that point they could
become eligible for interim debt relief," said World Bank Latin America and
Caribbean director Caroline Anstey.
"They receive the bulk of the debt relief at the completion point,
which follows some two or two-and-a-half years later," Anstey added. "We
believe it is very important that the savings from debt relief are spent on
key social areas: health, access to clean water, education."
A meeting of 26 donor countries and agencies in July topped up and
extended a two-year-old aid fund with $750 million for 13 more months after
the original $1.1 billion package expired.
Donors meet again in Spain in November to review Haiti's progress in
implementing its budget and social programmes.
In a statement, IMF deputy managing director Takatoshi Kato said Haiti
had a satisfactory track record but faces daunting challenges in security,
social conditions and income growth.
As a result, the country would need "continued financial support from
and engagement with the international community".
Last month the United Nations renewed the mandate of its 9,000-strong
peacekeeping force for six months, despite U.N. Secretary General Kofi
Annan's request for a year-long extension and a World Bank official's call
for a larger security force.
The IMF's Kato said further macroeconomic, structural and social
reforms, as well as close attention to improving security, would be
essential in enabling Haiti to reach the point where creditors agree to
reduce its debt burden.
Haiti's external debt is about $1.3 billion, of which about $550
million is owed to the Inter-American Development Bank, which is also
considering a debt write-off.
IADB President Luis Alberto Moreno, who is attending the Singapore
meetings, was not immediately available for comment.
"Immediate cancellation of Haiti's debt to the IMF, World Bank and
IADB would free much-needed resources needed to fight poverty,"
non-governmental organisations Jubilee Network USA and Institute for
Justice and Democracy in Haiti said in July.
To date, debt reduction packages have been approved under the HIPC
initiative for 29 countries, providing $35 billion in debt-service relief
The initiative was launched in 1996 with the aim of ensuring no
developing country faced a debt burden it could not manage.