WASHINGTON D.C., December 13, 2007 - An international think thank has warned that delays in debt cancellation for Haiti could have tragic consequences on the already poverty-stricken nation.
In its report, 'Debt Cancellation For Haiti: No Reason for Further Delays', the Washington-based Center for Economic and Policy Research (CEPR) said Haiti could not afford to wait too long for assistance.
Haiti could receive $464.4 million in debt cancellation from the World Bank and as much as $525 million from the Inter-American Development Bank under the Heavily Indebted Poor Country (HIPC) Initiative, but it must first meet a series of conditions which have taken other countries and average of three years to complete.
The report indicated that if Haiti's debt cancellation is similarly delayed, it may end up owing over $44.5 million in debt service payments - an amount equal to 26 percent of the Haitian government's public health budget.
Researchers added that the track record of IMF conditions placed on countries under debt cancellation agreements has not been positive. It's for this reason, the report noted, that Haiti's debt should be immediately cancelled rather than subject the country to extended conditionality.
"Because of the endemic dire poverty, the recent hurricanes and other natural disasters, and because of their own role in damaging Haiti's economy through a previous aid embargo, multilateral institutions should cancel Haiti's debt as quickly as possible," said CEPR co-director and co-author of the report, Mark Weisbrot.
Haiti was previously excluded from the HIPC process due to a technicality, and was not allowed the debt cancellation received this year by the other HIPC countries in the Americas.
The Center for Economic and Policy Research is an independent, nonpartisan think tank established to promote democratic debate on economic and social issues.
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