Debt Movement calls for a total cancellation of Haiti's debt
Campaigners dismayed at the International Monetary Fund’s new lending
After Tuesday’s earthquake, which has left up to 50,000 people dead, Eurodad and Jubilee Debt Campaign1 are calling for an urgent cancellation of all of Haiti’s remaining debt. They have also criticised the International Monetary Fund (IMF) for extending new loans2 to the country at a time when significant grant-aid is required.
Eurodad and JDC welcomed the cancellation of two thirds (US$ 1.2 billion) of Haiti's debt in 2009, but regret that the country still has US$ 890 million in debt on its books and in 2010 is projected to pay around US$ 10 million to International Financial Institutions.
The groups called the International Monetary Fund’s proposed offer of US$ 100 million in new lending to Haiti “completely inappropriate”. Even though lent at very concessional rates of interest, the civil society groups say the proposal contradicts the IMF’s own policy recommendations3 that Haiti should not borrow more money because, even after debt cancellation, it’s potential for debt distress remains high.
Nick Dearden, Director of Jubilee Debt Campaign said:
“Haiti’s dire poverty has been built on centuries of injustice perpetrated against the country by the rich world. It is time for our part of the world to pay its debt to Haiti. That means full cancellation of all of Haiti’s debts and large grant funding.”
Nuria Molina, Director of Eurodad said:
"It is completely inappropriate for international institutions like the IMF, which bare a good degree of responsibility for the poor state of Haiti’s economy today, to be making new loans with more damaging conditions.”
Eurodad and JDC point out that not only is lending the wrong solution for Haiti, but the IMF’s loans come with conditions. Current conditions include: raising prices for electricity, refusing pay raises for any public sector employees except those making the minimum wage and keeping inflation as low as possible. The group argues that Haiti is still suffering as a result of conditions applied to its economy in the past.
In 1995 the IMF forced Haiti to slash its rice tariff from 35% to 3%. This resulted is an increase in imports of more than 150% between 1994 and 2003, 95% of them coming from the US4. This devastated Haitian farmers. Traditional rice-farming areas of Haiti now have some of the highest concentrations of malnutrition and a country that was self-sufficient in rice is now dependent on foreign imports. This led to rioting and the fall of the Haitian government last Spring when food prices rocketed.
For more information contact:
Nick Dearden, Director, Jubilee Debt Campaign, +44 (0) 7932 335464 [email protected]
Nuria Molina, Director, Eurodad, +32 473 410 834 [email protected]
Press Release No. 10/06 January 14, 2010 www.imf.org/external/np/sec/pr/2010/pr1006.htm
3 IMF Executive Board Completes Fifth Review Under PRGF Arrangement for Haiti and Approves US$24.5 Million Disbursement and Extension of Arrangement. Press Release No. 09/244, July 2, 2009 imf.org/external/np/sec/pr/2009/pr09244.htm