$1.2 billion in debts canceled to help Haiti
By JONATHAN M. KATZ – 10 hours ago

PORT-AU-PRINCE, Haiti (AP) — Three international organizations
canceled $1.2 billion of Haiti's debt Tuesday, freeing up millions of
dollars each year for the deeply impoverished Caribbean nation that
is beset by humanitarian crises.
The World Bank and the International Monetary Fund said their boards
decided this week to forgive Haiti's obligations to the two
organizations, a move that triggered previously announced debt relief
from the Inter-American Development Bank.
The actions erased nearly two-thirds of Haiti's outstanding debt. As
of April, Haiti owned more than $1.9 billion, according to the
Washington-based Center for Economic and Policy Research.
"This is a pretty big victory, definitely. This is what we've been
wanting," said Dan Beeton, an analyst with the center, said by phone
from Washington. "It's a shame it had to take so long."
Until now, the desperately poor country, where more than 80 percent
of its approximately 9 million people live on less than $2 a day, has
been paying about $1.6 million each month to the World Bank,
according to debt relief advocates at the Jubilee USA Network.
A significant portion of the debt forgiven Tuesday dates back to
loans that lined the pockets of Haiti's dictators, especially
Francois "Papa Doc" and Jean-Claude "Baby Doc" Duvalier, whose father-
son dynasty ended in a 1986 popular rebellion.
Haiti was added to the World Bank and IMF's debt cancellation program
for heavily indebted poor countries in 2006. The Inter-American
Development Bank previously approved debt relief for Haiti, pending
its completion of that program.
But it took several years for Haiti to implement reforms that
included auditing government accounts, adopting a law on public
procurement and strengthening tax and customs administration, as well
as debt reporting. Other steps included approving an AIDS prevention
and treatment plan, financing school tuition for children and
improving immunization rates.
That was accomplished in spite of years of turmoil, including last
year's food riots that toppled the prime minister and four tropical
storms that killed some 800 people and caused more than $1 billion in
damage.
Finance Minister Daniel Dorsainvil praised the announcement in a
statement issued through the World Bank, saying the millions freed up
from debt payments "will help us invest in growth and poverty
reduction programs."
Others were skeptical about the benefits of the move. Haitian
economist Kesner Pharel said debt forgiveness will make it far more
difficult for Haiti to get new loans, impeding the government's
ability to finance much-needed improvements in infrastructure and
other areas.
"I don't see the government for the next five to 10 years having a
lot of money. It's a bad idea. It's a cost, not a benefit," Pharel said.
Haiti is the 26th country to have its debt forgiven under the
initiative, a list that includes Rwanda, Sierra Leone, Honduras and
Bolivia.
Associated Press writer Jennifer Kay in Miami contributed to this
report.
Copyright © 2009 The Associated Press. All rights reserved.