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Relieving Haiti's Debt

Relieving Haiti's Debt
Relieving Haiti's Debt

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The United States will erase $12.6 million, the last of Haiti's remaining bilateral debt, pursuant to a new agreement signed this month by U.S. Ambassador Kenneth Merten and Haitian Minister of the Economy and Finance Daniel Dorsainvil.

The debt was forgiven under the terms of the Paris Club, which acted following Haiti's completion of the Heavily-Indebted Poor Country Initiative, or HIPC. The International Monetary Fund and the World Bank launched HIPC in 1996, and Haiti successfully completed the requirements for debt relief in July 2009 by carrying out needed economic reforms.

"I wish to congratulate Minister Dorsainvil and the entire Haitian government for their efforts in favor of fiscal responsibility," said Ambassador Merten. Haiti's successful implementation of economic and financial reforms was a critically important factor leading to these international commitments to provide debt relief for Haiti.

This summer, Haiti met the requirements to complete the Heavily Indebted Poor Countries Initiative, qualifying Haiti for over $1 billion of debt relief from multilateral and bilateral creditors.

The agreement implements the U.S. portion of a multilateral accord that the Paris Club group of official creditors negotiated with Haiti on July 8, 2009, to cancel approximately $62.7 million in official debt.

Haiti's Paris Club creditors, including the United States intend to provide $152 million in additional debt cancellation beyond the requirements of the HIPC Initiative. As a result, Haiti's entire debt to Paris Club members – estimated at $214 million – will be fully canceled.

This debt forgiveness, combined with other multilateral debt forgiveness measures, will help Haiti bring its external public debt down and invest more in the social needs of the country.

The successful completion of the April 14th Donors Conference in Washington, D.C. resulted in $353 million dollars in new pledges for Haiti, according to the Inter-American Development Bank. At that conference, the United States announced its intention to provide $302 million in assistance to Haiti in 2009; $287 million in non-emergency assistance and $15 million in emergency food aid.

"Let me again stress the need for the government of Haiti and its partners to continue their good efforts to advance economic growth and development in the country, including by supporting the country's Plan for Reconstruction and Economic Recovery," said U.S. Permanent Representative to the United Nations, Susan Rice.

The U.S., said Ambassador Rice, will work with Haiti and its international partners to provide a better life for the people of Haiti.