Break the Chains of Haiti's Debt
Over the last few weeks, we have seen an incredible international response to the tragic earthquake in Haiti. U.S. citizens are generously giving; the U.S. and World Bank have offered hundreds of millions of dollars as grants. One institution took a different approach: last week the International Monetary Fund approved a $102 million loan to the impoverished and already indebted country, effectively doubling the amount of debt Haiti owes to it.
Take Action on This Issue
Haiti's debt currently totals more than $1 billion, with most owed to the International Monetary Fund and the Inter-American Development Bank.
This news of the IMF's new loan should come as a surprise to some. After the earthquake the IMF's Managing Director announced he was working with donors to cancel Haiti's current debt and debt on the future loan, effectively turning it into a grant. Yet when the institution voted to approve the loan they did not even mention debt cancellation.
Now Haiti will again be saddled with a debt that it cannot -- and should not -- pay.
Haiti's debt dates back to its independence. Haiti won the war, but France forced the country to pay for France's losses, including slaves, valued at $21 billion in today's terms. Haiti's debt slavery continued through the U.S. occupation and the brutal Duvalier dictatorships.
In June, Haiti celebrated the completion of the Heavily Indebted Poor Countries Initiative which wiped $1.2 billion of Haiti's debt off the books. Unfortunately, the deal did not go far enough and now we must continue to push.
In a letter sent last week to Treasury Secretary Geithner, more than 80 religious denominations, human rights groups, and development and labor groups (including Jubilee USA Network and Sojourners) urged Haiti's immediate debt cancellation. Jim Wallis' new Evangelical Partnership for the Common Good has also taken up this call for justice.
This weekend the finance ministers of the world's wealthiest nations will meet and discuss relief for Haiti. The U.S. must take leadership and negotiate Haiti's debt cancellation with the international financial institutions. Though the IMF has already approved the loan, the international community can ensure that Haiti doesn't get further into debt.
Let us continue to work to make sure that our response to the crisis puts Haiti back on the side of justice and breaks the chains of debt once and for all.
Hayley Hathaway is operations & communications coordinator for the Jubilee USA Network.