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30537: Ricker (reply) 30528 letter to editor of NYTimes (fwd)
Tom Ricker, haitireborn@quixote.org
Concerning Haiti's debts - and the letter to the editor in the New York Times -
some clarification. Haiti's international debts have not been canceled - far
from it.
The World Bank and International Monetary Fund admitted Haiti to the Heavilly
Indebted Poor Country Initiative in April of 2006. This program ("HIPC") is
designed to grant a certain amount of debt relief but only after countries have
undergone three or more years of adjustment policies. The first stage of this
process was the writing of an interim proposal demonstrating how the government
of Haiti would use savings from debt cancellation to grapple with poverty.
This interim - Poverty Reduction Strategy Paper (PRSP) - was completed in the
fall of 2006, and approved by the Bank board in December of 2006. Haiti now has
to abide by the adjustment/policy measure, draft a permanent PRSP, and
implement that sucessfully for a full year before seeing a write off of its
debt to those two institutions (about 40% of Haiti international debt). In the
meantime Haiti still has to service its debts to these institutions, and
bi-lateral creditors like France, the U.S., China, others...and the
InterAmerican Development Bank (close to 40-45% of Haiti int. debt).
Earlier this year, the Inter-American Development Bank did announce that it
would also cancel Haiti's debts - at the same time it announced cancellation
for Bolivia, Honduras, Guyana, and Nicaragua. Unlike these four countries,
however, Haiti will not see this cancellation for three years or more because
the IDB has also mandated that Haiti complete HIPC before getting any debt
cancellation from the IDB.
When the IDB made this announcement in March of 2007 it was also announced that
there would be some interim relief for Haiti (approx $10 million coupled with
grants) - it was this interim relief that representatives of Haiti's government
said would go to security.
In the meantime, Haiti will be paying between $150-200 million in debt service
to the IDB, World Bank and IMF before it sees debt cancellation assuming that
happens by 2009 or 2010. Even at that point Haiti will still have debts to
these institutions - as they will accrue new loans in the interim -though more
lending is now in the form of grants - (if the debts were actually canceled
today Haiti's need to borrow would be reduced dramatically.)
So, Haiti has a long time to wait before it actually gets anything close to
meaningful debt cancellation. The editorial, and other efforts, are gaining
support for a resolution before the U.S. Congress to cancel Haiti's debts
immediately - H Res 241. This resolution needs more co-sponsors and I would
encourage people to work their members of Congress to support it. Debt relief
is no silver bullet - but it is long past due in Haiti's case, and can make a
big difference if it happens soon.