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IMF cancels Haiti’s debt

The International Monetary Fund announced today that it is cancelling Haiti’s $268 million debt. Concern Worldwide welcomes this news but with some reservations.

The 12 January earthquake killed more than 222,750 people, destroyed the capital Port-au-Prince and left 1.2 million people homeless.

Call for debt relief

We had called for debt relief for the earthquake-stricken country in 29 January. CEO Tom Arnold today stated:

People worldwide have shown extraordinary solidarity with the Haitian people, and it is inconceivable that there would be any expectation that Haiti could manage to pay its total €800 million in international debt, so today’s announcement is very significant in that respect.

Loan announcement

The International Monetary Fund also announced a loan of $60 million to Haiti which will be interest free until 2011. This is part of a scheme agreed in July 2009 to help poor countries.

Reservations

However, we believe that financial assistance should be given in the form of grants and not loans to support the country’s reconstruction. To explain why, Tom said:

While any financial assistance for reconstruction in Haiti is immensely helpful, we believe that it should be given in form of grants not loans, so we have reservations about this aspect of the announcement. The level of devastation is such that it will take years to rebuild the infrastructure and economy. We believe that Haiti should not be encumbered with further debt for the foreseeable future.

Echoing the sentiments of Bill Clinton, co-chair of the Interim Haiti Reconstruction Commission, Tom added:

The pace of international donors honouring their initial pledges to Haiti must be accelerated to help the rebuilding process.