Campaigners demand complete debt cancellation for Haiti

After Tuesday’s earthquake, which has left up to 50,000 people dead, WDM has joined the Jubilee Debt Campaign in calling for an urgent cancellation of all of Haiti's remaining debt.

"The poverty that already exists in Haiti will be even more devastating as a result of this emergency and it clearly requires high levels of aid to combat it. This should also come with wholesale debt cancellation and the need to need to ensure that aid is given in the form of genuine grants as opposed to traditional IMF-backed loans, which would undoubtedly worsen an already dire situation", said Julian Oram, Head of Policy at WDM.

We welcome the cancellation of two thirds ($1.2 billion) of Haiti’s debt in 2009, but condemn the fact that the country still has $641 million in debt on its books and in 2010 is projected to pay around $10million to International Financial Institutions.

We also think that the International Monetary Fund’s proposed offer of $100 million in new lending to Haiti is completely inappropriate. Even though lent at very concessional rates of interest, the proposal contradicts the IMF’s own policy recommendations that Haiti should not borrow more money because, even after debt cancellation, its potential for debt distress remains high.

The IMF’s loans 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.

We are writing to Finance Ministers to urge them to cancel Haiti's unjust debt repayment and to register deep concern over the IMF's new proposed loan in the wake of the disaster.

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. It is completely inappropriate for international institutions like the IMF, which bear a good degree of responsibility for the poor state of Haiti’s economy today, to be making new loans with more damaging conditions.”