Why We Must Cancel Haiti's Debt
A brief history of Haiti's onerous, 'odious' and crippling debt load written by KAIROS' Economic Justice Program Coordinator John Dillon.
| 22.01.10
As the Haitian people struggle to recover from the earthquake’s devastation it is imperative that all of its external debts be cancelled immediately.
Despite US$1.2 billion of debt relief accorded to Haiti in 2009 as part of the Heavily Indebted Poor Countries Initiative (HIPC), at the time of the earthquake Haiti still owed just over US$1 billion.
Most of this debt was owed to International Financial Institutions, principally the Inter-American Development Bank (IDB) and the International Monetary Fund (IMF).
Debt owed to the IMF is particularly onerous since it comes with strings attached. For example, Haiti used to be self-sufficient in growing rice, its staple food. But in the mid-1990s the IMF forced Haiti to slash tariffs on rice imports, allowing tonnes of subsidized rice into the country. The result was that thousands of rice farmers lost their livelihoods and had to move into the overcrowded slums of Port-au-Prince.
The good news is that the IDB is prepared to consider writing off the US$511 million that Haiti still owes if it gets approval from its board of governors where Canada has a seat. Similarly, the managing director of the IMF has hinted that the Fund might convert a new US$100 million loan it announced last week into a grant if he receives the approval of the board of directors where Canada also has a seat.
Haiti’s Legacy of Unjust Debt
Haiti’s foreign debt has deep historical roots. After the slave rebellion of 1825 that led to Haiti’s independence, France insisted on a payment of 150 million franc debt - the equivalent of US$21 billion dollars today. The French colonialists demanded compensation after losing the services of their former slaves. This enormous debt hobbled the country’s independence from its very beginning.
When the US marines invaded Haiti in 1915 and occupied the country until 1934, one of their prime missions was to ensure the collection of debts owed to Citibank.
The Duvalier dictatorships increased Haiti’s debts by seventeen and a half times over the period 1957 to 1986. Both Papa Doc and Baby Doc looted the country leaving it with debts that could only be termed as “odious”, that is, credits that enriched the dictators without benefit to the people. A recent inquiry revealed that the Duvalier family’s assets are estimated to be worth US$900 million. A trial is currently underway in Switzerland concerning whether some of the Duvaliers’ stolen treasure held in frozen accounts by the Swiss bank UBS will be returned to the Haitian people.
After the Duvalier dictatorship was overthrown Haiti took on new debts and paid a heavy price. Not only did the country pay foreign creditors US$321 million in loan service over the years 1995 to 2001, but it also had to submit to harsh Structural Adjustment Programs imposed by the IMF in order to qualify for the HIPC initiative. The devastation caused by IMF conditionality, especially in the agricultural sector, led to food riots in 2008.
We must not repeat this history. KAIROS insists that all of Haiti’s debts must be cancelled unconditionally. Far from being an act of charity, debt cancellation and new assistance in the form of grants must be seen as reparations for the enormous historical debt owed to the people of Haiti for centuries of exploitation.
To sign a petition to demand the cancellation of Haiti’s debts click on the following link:
http://one.org/international/actnow/haiti/signed.html?id=-4501123-Mu.TfUx
