Haiti's external debt
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[edit] Early History
Haiti’s legacy of debt began shortly after gaining independence from France in 1804. In 1825, France, with warships at the ready, demanded Haiti “compensate” France for its loss of a slave colony. In exchange for French recognition of Haiti as a sovereign republic, France demanded payment of 150 million francs (modern equivalent of $21 billion). [1]
[edit] Duvalier Debt
From 1957 to 1986, Haiti was controlled by the father/son dictatorship of Francois “Papa Doc” Duvalier and Jean-Claude “Baby Doc” Duvalier. For nearly thirty years they diverted foreign assistance towards their own personal interests. While exactly how much money the Duvaliers stole is unknown, after Jean-Claude Duvalier was forced to step down an audit established that at least $500 million had been diverted in just his last six years. Once stolen, the money was used for a variety of purposes. A certain amount went directly to the Duvalier family. For example, Michele Duvalier famously spent $20,000 on a shopping trip to New York in the early 1980s. The money was also used to strengthen the Duvaliers’ control over Haiti, with payoffs to the Tonton Macoutes (Francois Duvalier's personal militia), Haitian soldiers, and local officials. [2]
[edit] Current external debt
Haiti has a total external debt of 1.4 billion dollars. 45% of this debt was accumulated under the Duvalier dictatorship. [3] In April, Haiti was added to the World Bank and IMF's highly indebted poor country initiative (HIPC) following the election of new president Rene Preval. However, the country will not qualify for debt cancellation from the IMF and World Bank until 2009 at the earliest.
Haiti's largest creditor, the Inter-American Development Bank (IDB), is not part of the debt relief initiative. Haiti's debt to the IDB amounts to approximately half a billion dollars with debt service payments projected by the IMF to increase in the following years.[4]
[edit] Initiatives to Cancel Haiti's Debt
Jubilee USA has called for the immediate cancellation of Haiti's debt to multilateral institutions, including the World Bank, IMF, and the previously excluded lender, the Inter-American Development Bank, based on the argument that this debt is unjust (under a legal term called odious debt) and that Haiti could better use the funds going towards debt service for education, health care, and basic infrastructure. [5]
