Tuesday, January 19, 2010

A new call to forgive Haiti's debt

Just as soon as Haiti became independent the nation was burdened with debt. As we linked to yesterday, the slaves in Haiti who gained independence then had to pay reparations to their former slave holders. That action began a history of indebtedness for the country, and is a big reason why Haiti has been unable to achieve a stable economy.

Calls for all wealthy nations to forgive Haiti's debts grew stronger yesterday as the "Paris Club" of four industrialized nations issued a statement asking all countries to forgive Haiti's debts. From the New York Times, Alan Cowell reports on the Paris Club's appeal.

Broadening the relief effort, the Paris Club of international creditors issued an appeal Tuesday for nations owed money by Haiti to cancel the debts to help reconstruction after the devastating earthquake a week ago.

A statement from the informal grouping, which meets each month in Paris and is composed of major industrialized countries, came as international agencies pressed for the provision of greater security to protect the distribution of aid in Haiti and the supply route leading from the neighboring Dominican Republic.

The Paris Club said that last July its members canceled all their claims on Haiti, at that time totaling $214 million.

“Considering the financing needs that Haiti will face in reconstructing the country, Paris Club creditors call upon other bilateral creditors also to urgently provide full debt cancellation to Haiti,” the statement said.

The response from creditors was not clear. The Paris Club said that Haiti’s public external debt, before factoring in relief offered to very poor countries, totaled $1.885 billion at the end of September 2008. The appeal came as relief efforts in Haiti were still stymied by bottlenecks and security fears.

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