For Immediate Release
New Report Shows Need for Rapid Debt Cancellation for Haiti in Wake of Recent Disasters and Global Economic Downturn
WASHINGTON - Following
the election of Senator Barack Obama, who has supported debt
cancellation for poor countries, and a recent trip by World Bank
president Robert Zoellick to Haiti, the Center for Economic and Policy Research released a new report
today underlining why Haiti urgently needs debt cancellation in order
to address humanitarian needs and help the country withstand the
effects of the global economic downturn, which is likely to inflict
further pain upon the most impoverished country in the Western
The report, "Update - Debt Cancellation for Haiti: No Reason for Further Delays,"
describes several key economic challenges confronting Haiti, while
Haiti is required to make millions of dollars in debt service payments
to foreign creditors such as the Inter-American Development Bank and
the World Bank. The paper also describes the technical criteria that
have prevented Haiti from receiving full debt cancellation under the
IMF and World Bank's Heavily Indebted Poor Country Initiative (HIPC).
"The whole world knows that Haiti needs all the funds it can get - now
- to deal with disaster relief and also to deal with the global
economic downturn," said Mark Weisbrot,
Co-Director of the Center for Economic and Policy Research and lead
author of the report. "There are millions of Haitians who simply cannot
wait for their government to jump through the arbitrary hoops set by
the IMF and World Bank before the debt is canceled."
Haiti's total foreign debt currently stands at $1.7 billion (USD). Once
Haiti reaches "Completion Point" under HIPC, it stands to gain $1.2
billion total in canceled debt. Haiti had been expected to reach
Completion Point in September 2008, but recent disasters, economic
shocks, and political developments - along with various IMF demands on
technical criteria - now mean that Haiti will not reach Completion
Point until mid-2009 at the earliest.
This year's devastating hurricane season and rising food prices have
underscored the urgency of Haiti's need to free up funds currently
spent on debt service payments. In August and September, Haiti was
hammered by a series of hurricanes - Gustav, Hanna, and Ike - that
killed some 800 people and left as many as 1 million people homeless in
a country with a population of 9 million. Entire communities were
flooded, and aid has been slow in coming. United Nations
Under-Secretary-General for Humanitarian Affairs John Holmes said that
only 40 per cent of a $107 million flash appeal aimed at assisting the
emergency relief effort had been pledged as of October 27, 2008.
Haiti would also benefit from immediate debt cancellation since it is
likely to face further economic challenges due to reliance on trade
with the U.S. Haiti's exports to the U.S. were equivalent to 8.6
percent of its GDP in 2007, and the recent downturn in the U.S.
economy, led by the collapse of a massive housing bubble, has led to a
shrinking of the U.S. import market. U.S. imports are likely to decline
further, and unless counteracted by policy changes, these changes will
likely have a negative impact on Haiti's economic growth.
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