Haiti's debt should be cancelled now - Oireachtas Committee supports call

As the dreadful reality of what is happening in Haiti receives extensive coverage in the media an even more shocking reality is not being reported for the most part: as aid flows in to Haiti's desperate communities, money is flowing out to pay off the country's crushing debt - close to $1 billion in unfair debt racked up years ago by unscrupulous lenders and governments. The Oireachtas (Parliamentary) Committee on Foreign Affairs has supported this call and Social Justice Ireland welcomes their initiative.

The call for full cancelation of Haiti's debt is being promoted across the world, and has won over some leaders; but other rich lender countries are rumoured to be resisting. G7 finance ministers hold their summit in Canada next week and are likely to discuss this issue.  

Even before the recent earthquake, Haiti was one of the world's poorest countries. After Haitian slaves rose up and won their independence in 1804, France demanded billions in reparations - launching a spiral of poverty and unjust debt that has lasted two centuries.

In recent years, the tremendous worldwide campaign for debt relief has awoken the world's conscience. And in the last few days, under mounting public pressure, lenders have begun to look at the possibility of doing the right thing i.e. erasing Haiti's still-devastating debt burden.

But the detail is important and lessons should be learned from recent experience. After the 2004 tsunami, the IMF announced relief from debt payments for stricken countries - but the underlying debt went right on growing. Once public attention had faded, the debt payments were bigger than ever.

It's time to cancel Haiti's debt fully and without conditions, and ensure that earthquake aid is made with grants, not loans. This approach would ensure change in people’s lives in Haiti even after the world's attention has moved on.
 
Having made this call for Haiti's debt to be cancelled Social Justice Ireland welcomes the action of the Oireachtas (Parliamentary) Committee on Foreign Affairs in calling for the same outcome.  The newsrelease from the Committee is reproduced in full below.
 
This issue should now be pursued by the  Ministerfor Foreign Affairs and the Minister for Finance in the relevant international arenas.
 

HOUSES OF THE OIREACHTAS
MEDIA RELEASE

Haiti’s $800 Million International Debt Must be Written Off-Oireachtas Foreign Affairs Committee

27th Jan 2010

All outstanding loans owed by Haiti must be cancelled and any money lent to the country to aid its reconstruction must be in the form of grants rather than loans the Oireachtas Committee on Foreign Affairs has insisted today.

The Committee met today with representatives from some of the Irish aid agencies currently operating in Haiti and were given the up to date picture of the situation on the ground in the country. One of the key aspects to emerge at the meeting was the need to sustain support for Haiti in the long term and assist with its future redevelopment and not only with immediate humanitarian needs.

One significant contribution to this would be to cancel its outstanding debt.

Committee Chairman, Dr Michael Woods TD said;
“The Committee unanimously endorses the call for all Haiti’s international debt to be written off immediately and ensure that any disaster relief assistance is provided in the form of grants rather than loans.

In June 2009, Haiti secured $1.2 billion debt cancellation from its major creditors when it reached completion point in the Heavily Indebted Poor Countries Initiative. This was a critical step forward. But even after this cancellation, Haiti remains burdened with a debt of over $800 million.

More than half of this debt is owed to the International Monetary Fund (IMF) and the Inter American Development Bank (IDB). Haiti is projected to pay at leastd $100 million in debt payments over the next five years unless this debt is cancelled. If Haiti is compelled to pay this money it would seriously hinder its prospects of recovery from the devastating effects of the earthquake, so we feel the debt must be wiped out.

The Committee also commended the Irish people for their overwhelming generosity in contributing to the disaster relief fund.”

ENDS
Daniel English
Oireachtas Communications Unit
01 618 4484
   087 6949926

Membership of Committee
Michael Woods TD, Fianna Fáil (Chairman)
Rory O'Hanlon TD, Fianna Fáil (Vice Chairman)
Darragh O'Brien TD, Fianna Fáil
John Deasy TD, Fine Gael
Michael D Higgins TD, Labour Party
M.J. Nolan TD, Fianna Fáil
Michael Noonan TD, Fine Gael
Frank Fahey TD, Fianna Fáil
Noel O'Flynn TD, Fianna Fáil
Alan Shatter TD, Fine Gael
Billy Timmins TD,Fine Gael
Sean Ardagh TD, Fianna Fáil
Senator Ivor Callely, Fianna Fáil
Senator Maurice Cummins, Fine Gael
Senator Mark Daly, Fianna Fáil
Senator Dominic Hannigan, Labour Party
Senator David Norris, Independent