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House Votes to Cancel Haiti's Debt

March 10, 2010 - by Donny Shaw

On voice vote, the House of Representatives this afternoon passed a bill that would put pressure on the big international financial institutions to completely cancel all of Haiti’s debt so that the country can use what resources it has for rebuilding from the earthquake they suffered in January, 2009.

The bill is H.R. 4573, sponsored by Rep. Maxine Waters [D, CA-35] and co-sponsored by 69 other lawmakers, mostly Democrats. According to the official title, it would “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.”

Haiti is the poorest country in the Western Hemisphere. Their entire GDP is around $8.5 billion, and according to the text of the bill, they “owe a total of $709 million in debts to multilateral financial institutions, including $447 million to the Inter-American Development Bank, $165 million to the IMF, $39 million to the World Bank, and $58 million to the International Fund for Agricultural Development.” That’s a total of $1.4 billion.

Besides canceling that debt, the bill passed today calls on international financial institutions to “provide additional assistance … to Haiti in the form of grants so that Haiti does not accumulate additional debts.” And it calls on the U.S. Treasury Department to work on influencing other creditors to cancel any debt Haiti holds with them, like $167 million they owe to Venezuela and the $92 million they owe to Taiwan that the IMF reported in 2008.

The Senate passed a similar bill (S. 2961) on March 5th by unanimous consent. The two bills will have to be reconcilied, or one of the chambers will have to sign off on the other chamber’s version, before it can be signed into law by President Obama.

Image used under a Creative Commons license from AIDG.

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