IDB OK's massive debt relief package for five nations, Haiti

Post Reply
User avatar
admin
Site Admin
Posts: 2152
Joined: Thu Nov 13, 2014 7:03 pm

IDB OK's massive debt relief package for five nations, Haiti

Post by admin » Mon Nov 20, 2006 8:17 am

http://www.miami.com/mld/miamiherald/bu ... tstory.jsp
Posted on Sat, Nov. 18, 2006

[quote]LATIN AMERICA
IDB OK's massive debt relief package for five nations
Inter-American Development Bank has agreed to a massive debt relief for poor nations.
BY PABLO BACHELET
pbachelet@MiamiHerald.com

WASHINGTON - The Inter-American Development Bank on Friday accepted a U.S.-promoted proposal to pardon between $2.1 and $3.5 billion for five poor Latin American nations including Bolivia, a nation that opposes U.S. policies.

The Bush administration has been pushing for the relief since March, when it proposed the operation despite resistance from several Latin American countries because of concerns that the write-off would weaken the IDB's ability to provide subsidized loans in the future, officials said.

The Latin American nations wanted the United States and other wealthy countries to help pay for the operation, but Washington argued that the IDB was strong enough to take the hit.

The delay meant that the IDB did not join the World Bank, the International Monetary Fund and the African Development Bank in announcing last year a similar debt relief operation for poor countries from other regions. The IDB is the biggest official lender in Latin America.

''This is great news for the more than 30 million people in these five countries,'' said IDB President Luis Alberto Moreno.

U.S. officials were clearly pleased at the result of the meeting Friday, as it will help soften the Bush administration's image in Latin America as a hard-edged promoter of open-market policies and free trade.

Bolivian President Evo Morales has sharply criticized U.S. policies as ''imperialistic,'' and Nicaragua is set to be governed by old-time Sandinista foe Daniel Ortega, also a left-wing critic of Washington.

''The United States has been a leading voice for such an initiative,'' said the Treasury Department's assistant secretary for international affairs, Clay Lowery, ``and today's agreement on a way forward is a critical step in that effort.''

The deal left some significant details to be worked out later, U.S. and bank officials say.

The IDB board of governors did not decide on the critical matter of when the debt relief will kick in -- something that could add or subtract hundreds of millions of dollars from the package. The Bush administration wants a more generous Dec. 31, 2004, cut-off, which would work out to the $3.5 billion relief.

This would mean Bolivia will obtain $768 million in debt relief, Guyana $365 million, Haiti $468 million, Honduras $1.1 billion and Nicaragua $808 million.

IDB's managers and other countries have suggested earlier dates, potentially reducing the package to $2.1 billion, according to numbers provided by Jubilee USA Network, a nonpartisan group that advocates for poor-country relief.

Top IDB officials will meet again in January in Amsterdam to finalize the agreement. A signing ceremony is expected in March.

Nations must first obtain the IMF's seal of approval for their economic program, something Haiti still lacks. But U.S. officials expect this to happen soon.

Once Haiti gets the agreement, the country would receive as of yet unspecified benefits beyond what the other four countries will obtain, given its position as the hemisphere's poorest nation, the Treasury Department said.
[/quote]

User avatar
admin
Site Admin
Posts: 2152
Joined: Thu Nov 13, 2014 7:03 pm

Post by admin » Mon Nov 20, 2006 8:35 am

The question is: Is George W. Bush finally doing something right by Haiti?

Since in my opinion he has never done anything helpful to Haiti and those Latin American countries before, I have to wonder why he would start now. Is he just concerned about his tarred legacy or is there some other hidden agenda?

In any case, this is the first step towards reparations for Haiti and I must thank you for taking the lead on this, Mr. Bush.

You are not off the hook however and justice still awaits.

IDB OK's massive debt relief package for five nations, Haiti

Post by » Wed Nov 22, 2006 2:41 pm

"The question is: Is George W. Bush finally doing something right by Haiti?"

I think the debt relief announcement can be a step in the right direction, or it can be a step towards chaining the Haitian economy with more conditions that make the poor poorer and the rich (Haiti's rich and the International Community's rich) richer.

With good friends of Haiti in powerful places on Capitol Hill, we have an historic opportunity to push for full debt cancellation. But only if voters let their representatives know they care about this issue. The Jubilee USA Network and several other organizations are making debt cancellation for Haiti a priority for the next six months

A good initial analysis by Tom Ricker of Haiti Reborn is below.
______________________________

IN THE NEWS: The IDB Cancels Haiti's Debt……Sort of

The Inter-American Development Bank (IDB) announced on Friday, November 17 that Haiti's debt would be cancelled, along with those of Nicaragua, Honduras, Bolivia, and Guyana. The IDB accounts for nearly half of Haiti's debt.

An article from Heartbeat News claims: “The principles of the framework stipulate that 100 percent debt relief be granted, with effect from January 1, 2007, to the five countries, which will continue to have access to concessional loans and technical cooperation grants from the IDB.”


However, the details are proving sticky. In conversations with IDB staff today, I was told that the IDB Board of Governors agreed to a framework for canceling debts, but had not agreed to a timeline, or even to the amount to be cancelled. And the details of the framework are not available yet either.

It also appears to be the case that Haiti would have to undergo several years of policy reform before being granted the “relief.” All of the other countries that are a part of this agreement have already gone through the Highly Indebted Poorer Country (HIPC) Initiative. HIPC was established by the International Monetary Fund and the World Bank as the framework for their debt relief program. It requires countries to undergo three to six years of adjustment programs to qualify for a write off of their debts.

Haiti is currently negotiating entry into the HIPC initiative, but has not yet been accepted into the program. So, if it turns out that Haiti must complete HIPC first – debt relief is still two-three years away.

Complicating things a bit more, are debates over the cut off date for debts to be eligible for cancellation. The more recent the date that is agreed to, the more debt that could be written off. For example, if the cut-off date is December 31, 2004, a total of $3.5 billion (for all five countries) would be eligible for cancellation. If the date is moved back in accordance to an IDB staff analysis, the reduction could be cut in half.

The good news is that the IDB has finally agreed to join the IMF and World Bank in the granting debt cancellation. The bad news is that like the IMF and World Bank the IDB appears to be doing it on terms that may well undermine the benefits.

Haiti Reborn is members of the Jubilee USA Network, and as such will continue to demand immediate cancellation without the hoops and policy mandates. Read their response to the IDB announcement .

We will be working with Jubilee USA and other partners to ensure that Haiti gets the best deal possible.

Have a safe and joyful holiday this week.

Peace,
Tom

User avatar
admin
Site Admin
Posts: 2152
Joined: Thu Nov 13, 2014 7:03 pm

Post by admin » Thu Nov 23, 2006 9:56 am

[quote]It also appears to be the case that Haiti would have to undergo several years of policy reform before being granted the “relief.”[/quote]
That's what I was afraid of! There is always much more than meets the eye.

Thank you, Brian, for this additional information.

It sounds like a radioactive present.

Guy

Post Reply