Three international organisations cancelled US$1.2 billion of Haiti's
debt Tuesday, freeing up millions of dollars each year for the deeply
impoverished Caribbean nation that is beset by humanitarian
crises.
The World Bank and the International Monetary Fund
said their boards decided this week to forgive Haiti's obligations to the two
organisations, a move that triggered previously announced debt relief from the
Inter-American Development Bank.
The actions erased nearly
two-thirds of Haiti's outstanding debt. As of April, Haiti owned more than
US$1.9 billion, according to the Washington-based Center for Economic and Policy
Research.
"This is a pretty big victory, definitely. This
is what we've been wanting," said Dan Beeton, an analyst with the centre, said
by phone from Washington. "It's a shame it had to take so
long."
Until now, the desperately poor country, where more
than 80 percent of its approximately 9 million people live on less than US$2 a
day, has been paying about US$1.6 million each month to the World Bank,
according to debt relief advocates at the Jubilee USA
Network.
A significant portion of the debt forgiven
Tuesday dates back to loans that lined the pockets of Haiti's dictators,
especially Francois "Papa Doc" and Jean-Claude "Baby Doc" Duvalier, whose
father-son dynasty ended in a 1986 popular
rebellion.
Haiti was added to the World Bank and IMF's
debt cancellation program for heavily indebted poor countries in 2006. The
Inter-American Development Bank previously approved debt relief for Haiti,
pending its completion of that program.
But it took
several years for Haiti to implement reforms that included auditing government
accounts, adopting a law on public procurement and strengthening tax and customs
administration, as well as debt reporting. Other steps included approving an
AIDS prevention and treatment plan, financing school tuition for children and
improving immunisation rates.
That was accomplished in
spite of years of turmoil, including last year's food riots that toppled the
prime minister and four tropical storms that killed some 800 people and caused
more than US$1 billion in damage.
Finance Minister Daniel
Dorsainvil praised the announcement in a statement issued through the World
Bank, saying the millions freed up from debt payments "will help us invest in
growth and poverty reduction programs."
Others were
sceptical about the benefits of the move. Haitian economist Kesner Pharel said
debt forgiveness will make it far more difficult for Haiti to get new loans,
impeding the government's ability to finance much-needed improvements in
infrastructure and other areas.
"I don't see the
government for the next five to 10 years having a lot of money. It's a bad idea.
It's a cost, not a benefit," Pharel said.
Haiti is the
26th country to have its debt forgiven under the initiative, a list that
includes Rwanda, Sierra Leone, Honduras and
Bolivia.
AP