WASHINGTON - September 20 - The International Monetary Fund (IMF) gave much needed debt relief for Haiti a green light on Monday, but the road ahead is still dangerous for Haiti’s poor, stated a coalition of US organizations today. The IMF’s Executive Board announced that Haiti qualifies for its Heavily Indebted Poor Countries Initiative (HIPC) program that also applies to World Bank debt. The groups characterize this as a step in the right direction, but Haiti faces at least two more years of delay before it reaches completion point and is eligible for 100% cancellation.
Several U.S.-based organizations working on poverty and human rights in Haiti are concerned that the IMF and World Bank debt relief program will require painful economic measures that will make Haitians, the poorest people in the Americas, even more vulnerable to death and disease. In the meantime, the Haitian government will be forced to make $60 million a year in debt payments, money that would be better spent tackling Haiti’s dire health and education problems.
Haiti’s per capita gross domestic product (GDP) has shrunk 40% since 1980. Most Haitians struggle to survive on less than $1 per day. Life expectancy is only 53 years and nearly a quarter of children under 5 years old are chronically malnourished. Less than half of primary school-aged children attend school. Most people do not have access to clean water.
“Children will die of preventable water-borne diseases today, tomorrow and every day for months and years to come because of past restrictions imposed by the IMF and other lending institutions. Children in desperate need cannot wait three years for the IMF’s process to be completed,” said Nicole Lee, Operations Director of TransAfrica Forum. “Immediate debt relief would save lives immediately.”
Before Haiti receives full debt cancellation under HIPC, the IMF mandates that it undertake “further macroeconomic, structural and social reforms.” Past IMF “reforms” imposed on Haiti – including curtailing support for agricultural production and cutting social spending – have worsened Haiti’s chronic poverty.
“We are worried that the IMF’s medicine may be worse than the disease,” said Neil Watkins, National Coordinator of the Jubilee USA Network. “The HIPC conditionalities will aggravate the very problems that debt cancellation is supposed to tackle. Haiti needs immediate debt cancellation now.”
Almost half of Haiti’s $1.3 billion external debt is for loans made to the corrupt and brutal dictatorships of Francois and Jean-Claude Duvalier. “The banks let the Duvaliers use loans for private armies and Manhattan shopping trips. Now Haiti’s hungry poor must tighten their belts to pay the bill.” said Brian Concannon Jr. Director of the Institute for Justice and Democracy in Haiti. “Haiti’s debt is onerous, but it is also odious.”
Over half of Haiti’s public external debt is owed to the Inter-American Development Bank (IDB), which participates in HIPC but has not yet followed the lead of the G-8, the IMF, and the World Bank to provide 100% debt stock cancellation. Monika Kalra Varma, Acting Director of the Robert F. Kennedy Memorial Center for Human Rights, notes that “the IDB has been considering a program that would fully cancel Haiti’s debt to it, but it needs to move from consideration into action, now.”
HR 888, a resolution introduced in the U.S. House of Representatives by Rep. Maxine Waters of California has 60 co-sponsors and would commit the U.S. Government to immediate and complete debt cancellation for Haiti.