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Reply #38: not exactly. in "stages". & after delaying the process since 1996. [View All]

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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-18-10 06:00 AM
Response to Reply #14
38. not exactly. in "stages". & after delaying the process since 1996.
From a 2007 analysis: Debt Cancellation for Haiti: No Reason for Further Delays

Executive Summary

Haiti is the most impoverished country in the Western Hemisphere, with 76 percent of its population below the poverty line and a life expectancy of 53 years. Yet it was originally excluded from the International Monetary Fund (IMF) and World Banks Heavily IndebtedPoor Countries (HIPC) initiative for debt cancellation in 1996, because of a technicality relating to its debt service burden.

Although it was subsequently included (in 2006), because of this delay Haiti is currently struggling to meet the requirements for cancellation of most of its total $1.54 billion foreign public debt. Thus, while the other HIPC countries in the Western Hemisphere (Bolivia,Guyana, Honduras, and Nicaragua) have already received debt cancellation under the HIPC and Multilateral Debt Relief Initiative (MDRI) Haiti still has to reach the "completion point" under the HIPC initiative in order to receive debt cancellation.

If this completion point is not reached by September 2008, as now appears likely, Haiti would have to pay an additional $44.5 million in debt service payments to multilateral institutions (mostly the World Bank and the Inter-American Development Bank). This is equivalent to about 26 percent of Haiti's spending on public health, where there are many vital unmet needs. Furthermore, this total does not include bilateral debt service of $11.4million, some cancellation of which can also be expected.

There are other reasons to avoid delay. There is little reason to believe that the conditions set by the IMF and World Bank for further debt cancellation are likely to benefit Haiti.Although the experience of HIPC debt cancellation is positive with regard to the funds freed up from debt cancellation being used for poverty-reducing expenditures,1 the conditions attached to such debt cancellation do not have a positive track record.

For example, in Aprilof this year the IMF's Independent Evaluation Office released a report that examined the experience of 29 Sub-Saharan African countries that underwent Poverty Reduction and Growth Facility (PRGF) programs, and were therefore subject to IMF conditions, from 1999-2005.

The report was highly critical of the IMF's role, and among other findings noted that nearly three-quarters of the aid money reaching these countries was not spent. Rather, at the IMF's urging, this money was used to pay off debt and to add to reserves.2

Another reason that these institutions should grant immediate debt cancellation is that they contributed to enormous economic damage in Haiti by cutting off all disbursements from 2001 2004. There is considerable evidence that this cutoff of aid was part of a deliberate effort by the U.S. government to destabilize and ultimately topple the elected government of Haiti.3

...For a country as poor as Haiti, the aid embargo was enormously destructive to the economy,and the violence during and after the coup inflicted further damage and cost thousands oflives. Because of the multilateral creditors' participation in this destruction, and for the other reasons noted in this paper, Haiti's debt should be cancelled without further delay.

But it wasn't.

So spare me the "IMF/World Bank are really pretty nice" fairy tale.

Haiti has been a cash cow for Europe and the US for 200 years.
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