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Haiti

Debt statistics 2016

Overall international debt burden (% of GDP)9
Government payments on foreign debt (% of revenue)6.5
Government foreign debt (% of GDP)25
Private foreign debt (% of GDP)17
IMF and World Bank debt cancellation ($ billions)1
Country case studiesYes

Country case study

The slave rebellion in 1804 gained Haitians independence from France, but France forced the new country to pay millions of gold francs over the following decade as reparations. During the Cold War the corrupt and oppressive Duvalier regime were propped-up by the western world, including through the giving of loans. This debt was inherited by subsequent governments hindering development. In 2004, soon after elected President Aristide demanded reparations from fast for the money extorted after independence, he was overthrown in a military coup supported by the United States. After being kept out of the debt relief process, in 2006 Haiti was allowed in. In 2009, after following IMF and World Bank prescribed policies, the country qualified to have some debt cancelled. More was cancelled after the 2010 earthquake following a campaign by Haitian NGOs.

The western part of the Caribbean island known by colonisers as Hispaniola became the second republic in the Americas when slaves rebelled from France, winning independence in 1804. The French government demanded compensation for the loss of their property and slaves. In fear of invasion, Haiti agreed to pay back a sum of 90 million gold francs over the following 122 years. In 2004, the President at the time Jean-Bertrand Aristide suggested that France should repay $21 billion in reparations for this money extorted after independence. Soon after making this suggestion, the democratically elected president Aristide was overthrown by a military coup supported the USA.

At birth, Haiti was isolated by its slave owning neighbours. It therefore struggled to develop and has experienced political violence throughout its history. Between 1964 and 1986 Haiti was ruled by the corrupt and oppressive Duvalier family. The western world strongly supported the Duvalier’s because they were anti-communist, and on the US’s side during the Cold War. For years the money used to prop up this corrupt regime was repaid at the expense of those who have already suffered at its hands.

The Duvalier regime was overthrown in 1986, after which popular civil society organisations began to emerge. Long-postponed grievances were raised by these movements, including the unjust debt burden.

For many years these calls for debt justice fell on deaf ears. Despite being the poorest country in the Americas Haiti was not even considered for debt relief when the Heavily Indebted Poor Countries (HIPC) initiative was first launched in 1996. At the same time loans continued to be given. A 2002 evaluation by the World Bank of its lending to Haiti from 1986 to 2001 concluded, “the development impact of [World Bank] lending had been negligible”.

In 2006 the World Bank finally accepted Haiti was poor enough and indebted enough and allowed it to enter HIPC. Haiti finished the HIPC and MDRI programmes in 2009 and subsequently had $1.2 billion of debt cancelled.

However, campaigners argue that whilst HIPC is better than nothing it is not good enough, for Haiti or any other country. Firstly, to enter and complete the scheme a country must accept harmful economic policy conditions imposed by the IMF. Secondly, many debts are not included in HIPC. After getting debt relief Haiti still ‘owed’ $900 million. Nowhere in the debt relief process did rich countries accept their role in creating Haiti’s unjust debt, instead regarding debt relief as charity.

In January 2010 a devastating Earthquake struck Haiti killing up to 300,000 people. In the aftermath it seemed the state could collapse, survivors were left vulnerable to disease and without homes or livelihoods. Soon after the disaster twenty six Haitian NGOs together called for debt cancellation. This message was taken up around the globe, hundreds of thousands of people signed petitions.

Haiti’s debt had already increased to $1.15 billion following debt relief the previous year, and rose to $1.3 billion as new loans were given in the wake of the disaster. The public outcry led governments and the international financial institutions to drop Haiti’s outstanding debt.

Even as Haiti’s debt was cancelled new reconstruction funds were being offered in the form of loans rather than grants, storing up problems for the future. Meanwhile Haitian NGOs have condemned their exclusion from donor conferences following the earthquake. The twenty six NGOs behind the campaign for debt cancellation have endorsed a call for the population to mobilise a Haitian People’s Assembly, which will address these challenges and define strategies for the alternative reconstruction of Haiti.

According to the Centre for Economic and Policy Research the United States interfered 2010’s elections, effectively banning one party, preventing Aristide’s return and influencing the vote counting process. Haiti has been freed from some foreign debt but has not been spared foreign domination.

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