Naomi Klein

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IMF Backtracks on Debt Relief for Haiti

Just days after Naomi praised the International Monetary Fund for its historic advocacy of turning a $100 million emergency loan to Haiti into a grant, the institution seized up and began back-pedaling on debt relief. IMF Managing Director Dominique Strauss-Kahn clearly proposed converting the loan to a grant on January 20:

"The most important thing is that the IMF is now working with all donors to try to delete all the Haitian debt, including our new loan. 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. And that's the very important thing for Haiti now."

Yet when he wrote of the loan just two days later in the Huffington Post, he dropped all the language of giving this emergency aid in grant form:

"For now, and for at least the next couple of years, Haiti has no payments to make on its existing debts to the Fund, while the emergency loan we are providing is interest-free, with no repayments due for five years. Looking beyond the emergency phase, and as part of an international plan to rebuild the country, there will be a need to reassess Haiti's debt situation in light of the catastrophic damage to its economy. At that stage, the international community needs to be ready to provide comprehensive debt relief."

Unfortunately a pattern of weak rhetoric is continuing to emerge from the IMF. Today the fund issued an official press release announcing the emergency loan but said nothing of an immediate grant or even long-term debt cancellation.

The IMF's decision to give this aid without its usual prescriptive conditions is laudable and is a direct result of the pressure the fund has faced. We must continue pressing the IMF and other governments to drop Haiti's debt and ensure that Haiti does not accumulate new debt in the wake of the disaster.

Sign Jubilee USA's petition and urge U.S. Treasury Secretary Geithner to work for Haiti's debt relief. We must demand that all new aid be given in the form of grants, not loans.

to Naomi Klein's Newsletter.

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