March 01, 2010
The “Haiti Recovery Act” passed through the Senate Foreign Relations Committee last week. The bill, introduced by Senators Chris Dodd (D-CT) and Richard Lugar (R-IN) would eliminate Haiti’s outstanding debt to International Financial Institutions (IFI) and any debt incurred during relief efforts. Also, the bill would encourage IFIs to make available grants rather than loans “in order to end the debt-relief cycle.” Other aspects include the creation of an international infrastructure fund and the extension of trade benefits.
Similar legislation in the House is also moving forward. Maxine Waters introduced the “Debt Relief for Earthquake Recovery in Haiti Act of 2010“, which is set to be discussed in the House Financial Services Committee on Thursday. The bill would:
“To direct the Secretary of the Treasury to instruct the United States Executive Directors at the International Monetary Fund, the World Bank, the Inter-American Development Bank, and other multilateral development institutions to use the voice, vote, and influence of the United States to cancel immediately and completely Haiti’s debts to such institutions, and for other purposes.”
According to the IMF, Haiti had $677 million in multilateral debt in 2009. This does not include the recent addition of a $102 million loan from the IMF after the earthquake. Interest rates on outstanding loans from the IMF are zero until 2012, but without debt relief Haiti will spend 2.8 percent of government revenue on IMF obligations by 2014, according to the IMF.
For more information on Haiti’s debt, see Jubilee.
