US Lawmakers, NGOs Call for Debt Cancellation

WASHINGTON - Three weeks after
Haiti's devastating earthquake, nearly 100 U.S. lawmakers joined with
key civil society groups here Thursday to urge the Group of Seven (G7)
leading western nations to commit to canceling all of the Caribbean
country's multilateral debt.

On the eve of Friday's
meeting by G7 finance ministers in Iqaluit, Canada, 94 members of the
House of Representatives sent a letter to Treasury Secretary Timothy
Geithner that also called for "the provision of assistance to Haiti in
the form of grants so that the country does not accumulate additional
debts."

That
call was echoed by a several non-governmental organizations (NGOs),
including Oxfam, Jubilee USA, and Avaaz, which said they plan to
deliver hundreds of thousands of individual signatures on petitions
appealing for debt cancellation from across the world to this weekend's
ministerial meeting.

"(While) the international community has
acted rapidly and generously to provide for Haiti's immediate emergency
needs," said Emma Seery, Oxfam's campaign manager, "the G7 must now
also make sure that Haiti is not left saddled with crippling debts as
it recovers and rebuilds."

"They must agree to all new financial
support being in the form of grants, not loans, and commit to a clear
plan to cancel what remains of Haiti's debt," she said.

The push
on the G7, which, in addition to the U.S., includes Canada, France,
Britain, Germany, Italy, Japan, and the European Union (EU), comes as
Haiti struggles to clean up and begin recovering from the cataclysmic
Jan. 12 earthquake that is estimated to have killed at least 150,000
people, and possibly tens of thousands more.

In addition to
damaging much of the country's infrastructure, the quake, the most
lethal in the Americas' recorded history, also rendered nearly one
million of its nearly 10 million people homeless, creating
unprecedented challenges for the government of President Rene Preval,
humanitarian NGOs and foreign aid groups, and more than 10,000 U.S.
troops and U.N. peacekeepers.

With the vast majority of the
population living on less than two U.S. dollars a day before the
earthquake, Haiti has long been the western hemisphere's poorest
country. The quake was the latest in a series of natural disasters,
including devastating hurricanes in 2008 and again in 2009.

Last
June, 1.2 billion dollars in Haiti's external debt, including that owed
to the Washington-based International Monetary Fund (IMF), World Bank,
and Inter-American Development Bank (IDB), was canceled after the
Preval government completed a three-year Heavily Indebted Poor
Countries (HIPC) program.

Over half of that debt had been
incurred by Haiti's dictatorships, notably the Duvalier dynasty that
ruled the country from 1957 to 1986.

But the cancellation
covered debt incurred by Haiti only through 2004. In the last five
years, the country has received new loans - some of them to help it
recover from the floods and other hurricane damage - totaling another
1.05 billion dollars.

Some two-thirds of that total is owed to
multilateral agencies, including some 447 million dollars to the IDB,
39 million dollars to the World Bank, and some 165 million dollars to
the IMF.

The remainder is bilateral debt, most of it owed to
Taiwan (92 million dollars) and Venezuela (167 million dollars). Haiti
also owes the Rome-based International Fund for Agricultural
Development (IFAD) another 58 million dollars.

While the terms
of the multilateral loans are concessional - most of them carry only
nominal interest rates and can be repaid over as much as 50 years -
servicing of the IMF and IDB loans by themselves alone would normally
require Haiti to pay more than 100 million dollars over the next
decade, a sum that it can ill afford in the wake of last month's
earthquake, according to the NGOs.

Oxfam and the Jubilee USA
Network, veterans in the campaign to gain debt relief for the world's
poorest countries, began calling for comprehensive debt cancellation
immediately after the earthquake.

In the days following the
earthquake, officials at the IMF, the World Bank, and the IDB - whose
governing boards are dominated by the G7 countries - said they were
sympathetic to that appeal.

On Jan. 21, the World Bank
announced a waiver of Haiti's pending debt payment for five years and
said it would explore ways that the remaining debt could be canceled.
The IDB has said it is engaged in a similar effort and will present
alternatives for reducing or canceling the debt to its board of
governors.

On Jan. 27, the IMF, which lacks the authority to
provide outright grants, announced that it would give Haiti a 102
million-dollar loan at zero-percent interest and that would not be
subject to any of the Fund's usual performance conditions.

Last
week, all three countries reported to an emergency donors' conference
in Montreal on debt relief for Haiti, but no further announcements were
forthcoming.

In their letter, the lawmakers, who were led by
California Democratic Congresswoman Maxine Waters and Florida
Republican Ileana Ros-Lehtinen, called on Geithner to push hard on his
colleagues.

"We welcome recent statements from officials at the
multilateral financial institutions of their intentions to consider
cancellation of Haiti's remaining debts," the letter stated.

"We
urge you to use the voice and vote of the United States on the
Executive Boards of these institutions to secure cancellation of all of
Haiti's remaining multilateral debts. While arrangements are worked out
for cancellation, we urge you to support a moratorium on debt service
payments from Haiti to these institutions, without the accrual of
interest."

Melinda St. Louis, Jubilee's deputy director, said action was urgent.

"This
weekend the G7 finance ministers must respond to the mounting global
consensus to drop Haiti's debt," she said. "It's time our leaders
announced their commitment to cancel Haiti's debts once and for all,
including the new IMF loan. Debt cancellation is a critical step in the
long road to Haiti's recovery."