G7 Pledges to Cancel Haiti Debt

A makeshift bed for an injured person in Haiti. The aftermath of the quake has left millions displaced and thousands possibly dead in the capital and other areas of the Caribbean nation. The disaster is at the epicenter of world events.
Originally uploaded by Pan-African News Wire File Photos

G7 pledges to cancel Haiti debt

The world's leading industrialised nations have pledged to write off the debts that Haiti owes them, following a devastating earthquake last month.

Canada's finance minister announced at a summit in Iqaluit, northern Canada, that Group of Seven countries planned to cancel Haiti's bilateral debts.

Jim Flaherty said he would encourage international lenders to do the same.

Bi- and multilateral lenders including international bodies cancelled some $1.2bn (£800m) of Haiti's debt in 2009.

"We are committed in the G7 to the forgiveness of debt, in fact all bilateral debt has been forgiven by G7 countries vis-a-vis Haiti," Mr Flaherty said at the end of the two day gathering of finance ministers in the Arctic town.

"The debt to multilateral institutions should be forgiven, and we will work with these institutions and other partners to make this happen as soon as possible," he added.

At least one million people are in need of aid in Haiti after the magnitude 7.0 earthquake which struck in mid-January, killing more than 200,000 people.

The G7 group - which includes Canada, the US, UK, France, Germany, Italy and Japan - has been under pressure to help Haiti recover since the 12 January quake by cancelling the money owed by Haiti.

Haiti was rated as the poorest nation in the western hemisphere even before the earthquake struck.

Though exact figures are difficult to obtain, the exact amount owed bilaterally to G7 countries is believed to be quite small. Venezuela and Taiwan are Haiti's other biggest bilateral creditors.

Brown's pledge

In Iqaluit, British Prime Minister Gordon Brown hailed the pledge, saying: "It must be right that a nation buried in rubble must not also be buried in debt".

"The UK has already cancelled all debts owed to it by Haiti and I strongly welcome today's G7 commitment to forgive Haiti's remaining multilateral debt," he added.

"We will work with others to make sure this is delivered."

On Friday, the US voiced support for the plan to extend international debt relief for Haiti.

"The earthquake in Haiti was a catastrophic setback to the Haitian people who are now facing tremendous emergency humanitarian and reconstruction needs, and meeting Haiti's financing needs will require a massive multilateral effort," said Treasury Secretary Timothy Geithner.

He said the US would seek to reach an agreement for the funds owed to the multilateral donors, which include the Inter-American Development Bank, the International Fund for Agricultural Development and the International Development Association.

Mr Geithner also echoed the call by the head of the International Monetary Fund (IMF), Dominique Strauss-Kahn, to provide full relief of the country's outstanding debt to the body, including a $102m emergency loan approved in January.

Last June, the international community agreed to cancel some $1.2bn (£800m) of the country's total debt of $1.9bn owed to bi- and multilateral lenders including the IMF, World Bank and the US government, as part of a programme for heavily indebted poor countries.

UK-based charity Oxfam has urged the writing off of about an additional $900m (£557m) that Haiti still owes to donor countries and institutions.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/americas/8502567.stm
Published: 2010/02/07 00:15:15 GMT