WASHINGTON, United States, December 30, 2008 – The Centre for Economic and Policy Research (CEPR) has urged that there be no more delay in cancelling Haiti’s debt to international agencies.
Haiti’s total foreign debt currently stands at US$1.7 billion and CEPR says the country urgently needs debt cancellation in order to address humanitarian needs and help it withstand the effects of the global economic downturn, which is likely to inflict further pain upon the most impoverished country in the Western Hemisphere.
In its new report, CEPR said that Haiti is confronted with several economic challenges, while it 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 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 CEPR 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 cancelled.”
The CEPR points out that Haiti is currently struggling to meet the requirements for cancellation of most of its total US$1.7 billion foreign public debt. It still has to reach the “completion point” under the World Bank’s Heavily Indebted Poor Countries (HIPC) initiative in order to receive debt cancellation, which is now not expected until mid-2009 at the earliest.
Since completion point was not reached by September 2008, Haiti now has to pay an additional US$44.5 million in debt service payments to multilateral institutions. This is equivalent to about 26 per cent of Haiti’s spending on public health, where there are many vital unmet needs. Furthermore, this total does not include bilateral debt service of US$11.4 million, some cancellation of which can also be expected, the report added.
It added that his 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 one million people homeless in a country with a population of nine million.