Development & Aid, Economy & Trade, Headlines, Latin America & the Caribbean, North America

HAITI: U.S. Acts Quickly on Debt Relief Ahead of Preval Visit

Jim Lobe*

WASHINGTON, Mar 8 2010 (IPS) - With U.S. President Barack Obama preparing to host Haitian President Rene Preval at the White House Wednesday, Congress is moving quickly to show support for far-reaching debt relief and additional aid for the earthquake-stricken Caribbean nation.

The Senate Friday approved a resolution urging the U.S. representative at major international lending institutions to push for the cancellation of all of Haiti’s outstanding multilateral debt – about 700 million dollars – or about two-thirds of the country’s total outstanding debt of some 1.2 billion dollars.

The resolution also calls for Washington and other donors to provide significant assistance to help the country recover and rebuild from the earthquake, in which more than 200,000 people are estimated to have died.

In early projections based on other recent natural catastrophes released last month, the Inter-American Development Bank (IDB) estimated that reconstruction costs in Haiti are likely to range from eight billion dollars to 14 billion dollars. The same study predicted that the earthquake “is likely to be the most destructive natural disaster in modern times, when viewed in relations to the size of Haiti’s population and its economy.”

“While Haitians need our immediate help, they must also be empowered to build their own future down the road – a sustainable physical, social, and economic foundation for a stronger and more stable society,” said the chair of the Senate Foreign Relations Committee, John Kerry.

Meanwhile, the House of Representatives is planning to vote on a similar resolution during Preval’s visit here Wednesday morning, according to Congressional staff members.

The House’s subcommittee on International Monetary Policy and Trade approved the pending measure by voice vote last Thursday, and the House leadership has put it on a fast track for a floor vote, which is expected to be bipartisan.

“I have long been a proponent of debt relief for low-income countries to enable them to focus on providing health care, education, and other vital services to their citizens,” said Congresswoman Maxine Waters, who sponsored the House resolution and had just returned from a trip to Haiti on the weekend.

“In Haiti’s case, every available dollar is urgently needed for short-term recovery and long-term rebuilding and development. Extending complete debt cancellation to Haiti – as well as assistance in the form of grants – will give Haiti a strong chance to put the country on a sustained path to success. I commend my colleagues in the Senate for passing a debt cancellation bill, and look forward to the House acting this week,” she told IPS.

Preval’s visit, his first here since the devastating Jan. 12 earthquake, comes as U.S. troops have accelerated their withdrawal from the country where they helped deliver humanitarian assistance and maintain security, along with some 10,000 U.N. peacekeepers who were already stationed in Haiti and will remain there.

At their peak in early February, more than 16,000 U.S. soldiers and sailors were deployed in and around Haiti. “Our mission is largely accomplished,” said Gen. Douglas Fraser in a press call Monday. He said less than 8,000 troops will remain in the area – most of them off-shore – by the end of this week.

Wednesday’s White House meeting is designed in major part to demonstrate continued U.S. interest in the recovery of what was already, before the quake, Latin America’s poorest country.

“The President looks forward to welcoming President Preval to the White House to underscore his pledge to the Haitian people that they have a friend and partner in the United States of America,” read a statement released by Obama’s press office late Friday.

“They will discuss relief, recovery, and reconstruction efforts in Haiti, including the important contributions made by the United States and the international community,” it noted.

The United States – both through the Pentagon and the U.S. Agency for International Development – has so far spent more than 700 million dollars in humanitarian aid and its delivery, according to the latest government figures released last week.

The administration is currently drafting a supplemental 2010 foreign aid bill that is likely to include hundreds of millions of dollars more for reconstruction assistance, but officials here said it was unlikely the precise request – which must still be submitted to Congress for approval – will be announced at or before Wednesday’s meeting.

Such an announcement will likely be made in the coming two weeks and, in any case, before the United States will join Haiti’s other major donors at a pledging conference for Haiti at the United Nations in New York City scheduled for Mar. 31, according to administration officials.

In addition to the 700-plus million dollars Washington estimates that it has spent so far on earthquake relief and recovery, private U.S. citizens and companies have donated more than one billion dollars to charities active in humanitarian relief in Haiti, according to the latest tally by the Centre on Philanthropy at Indiana University.

Most of those funds were donated in the weeks after the earthquake as its aftermath dominated the three major national network television news programmes, which draw an average of about 23 million viewers every evening.

The networks devoted about one-third of their total nightly news coverage after the quake to news from Haiti through the remainder of the month, according to the authoritative Tyndall Report.

Network coverage dropped off sharply in February, according to the Report, which found that the arrest of U.S. Baptist missionaries on suspicion of trafficking Haitian children for adoption in the United States actually received more attention from the major evening programmes than recovery efforts.

The Congressional resolutions on debt relief were welcomed by non-governmental organisations (NGOs) which have been lobbying for the cancellation of all of Haiti’s multilateral debt since even before the earthquake struck.

“It’s a very important signal because the U.S. is such an important stakeholder,” said Elizabeth Stuart of Oxfam International. “The fact that the U.S. is promoting debt relief is something that all of the other stakeholders will take note of and hopefully act on in the coming weeks.”

The Group of Seven (G7) finance ministers, whose collective membership dominates the governing boards of the key financial multilateral agencies, agreed in principle to sweeping debt relief at an emergency meeting in Montreal at the end of January.

Among the major agencies, the Inter-American Development Bank (IDB) holds the most debt, at nearly 420 million dollars. It is followed by the International Monetary Fund (165 million dollars), and the World Bank (39 million dollars). Other multilateral agencies, including members of the U.N. system, are owed a total of about 55 million dollars, according to the latest Fund statistics.

Venezuela, which holds nearly 300 million dollars in bilateral debt, announced after the quake it intended to cancel it, while Taiwan, the other major bilateral creditor, has said it would consider forgiving the 95 million dollars it is owed.

Haiti received 1.2 billion dollars in multilateral debt relief last June after the Preval government completed a three-year IMF programme, but over half of that debt had been incurred by Haiti’s dictatorships, notably the 1957-86 Duvalier dynasty.

The debt incurred by Haiti since 2004 – much of it to help it recover from devastating floods caused by hurricanes in 2008 – was not covered by that relief.

*Jim Lobe’s blog on U.S. foreign policy can be read at http://www.ips.org/blog/jimlobe/.