IMF refuse to cancel Haiti debt as hurricane not ‘catastrophic’

The damage caused by Hurricane Matthew in October has led the IMF and World Bank to assess Haiti as being at high risk of not being able to pay its debt, up from their previous moderate risk assessment. However, the two institutions have refused to cancel any debt owed to them in response to the devastation caused by the hurricane.

Hurricane Matthew destroyed an estimated 90% of homes in Haiti's Grande Anse department. (Flickr / European Commission)
Hurricane Matthew destroyed an estimated 90% of homes in Haiti’s Grande Anse department. (Flickr / European Commission)

The IMF have estimated that Hurricane Matthew caused $1.9 billion of economic damage – 23% of GDP – and say:

“Reconstruction following the hurricane is expected to require large increases in public spending, with budget revenues remaining broadly flat.”

Haiti’s government external debt payments are now expected to be 9.2% of government revenue in 2017 ($106 million) and 9.6% ($118 million) in 2018. This is up from averaging 0.9% between 2011 and 2015.

Following global campaigning, significant amounts of Haiti’s debt were cancelled through the Heavily Indebted Poor Countries initiative in 2009, and then following the 2010 earthquake. However, the IMF have refused to cancel any debt after Hurricane Matthew because they do not regard economic damage of 23% of GDP as ‘catastrophic’. In the UK, 23% of GDP would be the equivalent of $530 billion, or over $8,000 per person.

If that’s not catastrophic, I don’t know what is.

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