April 29, 2010
President Obama signed into law legislation crafted by Rep. Maxine Waters (D-CA) that should provide further debt cancellation for Haiti. The law “directs the Secretary of the Treasury to instruct the U.S. Executive Directors at the World Bank, the International Monetary Fund (IMF)” to
1. cancel immediately and completely all debt owed by Haiti to these institutions;
2. suspend Haiti’s debt service payments to the institutions until the debt is canceled completely; and
3. provide additional assistance to Haiti in the form of grants so that Haiti does not accumulate additional debt.
…and also push for “the cancellation of all remaining bilateral, multilateral, and private creditor debt owed by Haiti” and to secure grants, instead of loans, from multilateral lenders for Haiti through January 2015.
The bill should expedite debt cancellation by – among others – the IMF, which has yet to cancel Haiti’s debt, despite various statements by IMF Managing Director, Dominique Strauss-Kahn, regarding a “Marshall Plan for Haiti.”
The IMF offered Haiti a $114 million loan following January’s devastating earthquake. After this received much criticism in the media, the IMF announced that Haiti would not have to pay any interest on the loan, and would not have to start paying back the principle for 5.5 years.
Most recently, Strauss-Kahn told the UN donors’ conference that the Fund will present a proposal for total cancellation of Haiti’s debt to the IMF Executive Board. Considering that the U.S. Treasury continues to wield an effective veto over the IMF, Strauss-Kahn’s proposal should pass easily now that Congress is pressing Geithner to publicly push for it.
Meanwhile, members of Congress say they are closer to passing another Haiti-focused bill, one that would be aimed at boosting U.S. imports of apparel from Haiti. A bipartisan deal will probably bring the bill, which would extend existing trade preferences for garments made in Haiti through September 2020, to a vote in the near future. A Real News Network interview today with Haitian labor organizer Didier Dominique, of Batay Ouvriye, examines working conditions in garment factories in Haiti’s Export Processing Zones, where Didier says workers make $3.00/day and often “cannot leave” their jobs because they become indebted to their employers.