$1.2 Billion in Debts Canceled to Help Haiti

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.


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