WCC calls on IMF to follow G7 in writing off Haiti's debts

By agency reporter
8 Feb 2010

The World Council of Churches has welcomed the initiative by the seven most industrialised nations (G7), which pledged this past weekend to write off Haiti's debts with them. In a letter from the WCC General Secretary, the Rev Dr Olav Fykse Tveit, the WCC also asked for the International Monetary Fund (IMF) and other international financial institutions to follow the G7's example and make sure that financial support to Haiti is "grant-based and not debt-creating".

Tveit welcomed and expressed appreciation for the G7 initiative in an 8 February 2010 letter to the finance minister of Canada, James M. Flaherty, who recently hosted the G7 meeting in Canada. Letters of appreciation were also sent to the finance ministers of France, Germany, Italy, Japan, United Kingdom and the United States. Tveit expressed hope that the G7 move will "encourage other countries and multilateral institutions to commit to the unconditional cancellation of Haiti's debts".

On 12 January, Haiti's capital city, Port-Au-Prince was hit by an earthquake that reportedly killed an estimated 200,000 people, injured some 250,000, and made 1.5 million homeless.

With regard to the IMF, Tveit shared his concern that "more loans" from the institution will add "to Haiti’s burden". He regretted that the IMF has not shown "clear willingness" nor made "definitive moves yet to cancel the country's current debt".

On 20 January, the IMF chief, Dominique Strauss-Kahn said the institution was "working with all donors to try to delete all the Haitian debt", including the IMF's latest interest-free loan of $100 million. "If we succeed – and I'm sure we will succeed – even this loan will turn out to be finally a grant, because all the debt will have been deleted", Strauss-Kahn said.

Since then, IMF officials have shown far less enthusiasm than their boss. On 27 January, the IMF mission chief for Haiti, Corinne Deléchat, made debt relief dependent on a disaster needs assessment to be done in February and said debt relief can achieve "little in comparison of the needs".

On 4 February, IMF external relations director Caroline Atkinson said debt relief "is not a today issue" on the grounds that "Haiti owes the IMF no debt service now and will not for at least two years".

In his letter to the G7 ministers, Tveit reiterated the WCC call "for the immediate and full cancellation of Haiti's foreign debt as the quake-stricken country needs a broader plan to support recovery, poverty eradication and sustainable development".

He also called on international financial institutions to "take urgent measures to cancel Haiti’s debts" and to make sure that "all financial support to Haiti be grant-based and non-debt creating".

Tveit reiterated the commitment of the ecumenical family to Haiti's long-term needs. Churches and church-related organizations around the world have participated in relief efforts since the disaster, particularly through the ACT Alliance, a global ecumenical grouping of churches and related agencies working on emergency relief and development and a partner organisation of the WCC.

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