Still more Haiti debt cancelled

The Paris Club, which was formed in 1956, provides financial services such as debt restructuring, debt relief, and debt cancellation to indebted countries and their creditors. Debtors are often recommended by the IMF after alternative solutions have faile

PARIS, France, July 9, 2009 – Debt forgiveness for the Caribbean’s poorest nation, Haiti, continues to roll in with the Paris Club of creditor nations agreeing to cancel US$62.73 million of monies owed and members individually committing to clearing more than twice that amount.

The move means that Haiti’s slate would be clean as far as its debt to the Paris Club – an informal group of financial officials from 19 of the world's richest countries – and individual members is concerned.

The group said yesterday that bilateral agreements have been reached between those countries and Haiti to cancel the remaining US$152 million outstanding.

In recent days, the World Bank, the International Monetary Fund (IMF) and the Inter-American Development Bank announced that they would forgive US$1.2 billion of Haiti’s debt, which is about two-thirds of what the country owes overall. At the end of September last year, Haiti’s public external debt was estimated to be US$1.88 billion.

The Paris Club said it welcomed Haiti's “determination to implement a comprehensive poverty reduction strategy and an ambitious economic programme providing the basis for sustainable economic growth in the context of a difficult global economic environment.”

“The Republic of Haiti committed to allocate the resources freed by the present debt cancellation to priority areas identified in the country's poverty reduction strategy,” it said in its statement. 

The Paris Club, which was formed in 1956, provides financial services such as debt restructuring, debt relief, and debt cancellation to indebted countries and their creditors. Debtors are often recommended by the IMF after alternative solutions have failed.

The group meets with debtor countries on a monthly basis in Paris in order to agree with them on restructuring their debts.