A couple of weeks ago, news broke that Canada has again “stepped up to the plate” to help Haiti’s earthquake recovery efforts, this time pledging $400 million in financial support and debt relief over the next two years. The commitment was made at the United Nations, and means that Canada will have a seat on the Interim Haitian Recovery Commission, which will co-ordinate recovery and development projects, and oversee the rebuilding of the earthquake and poverty-ravaged nation. Two dozen countries and agencies will participate in the Commission, headed by former US President Bill Clinton and Haitian Prime Minister Jean-Max Bellerive.
The EFC applauds this pledge, which follows on the heels of the Canadian government’s initial generous and swift response to the crisis in Haiti. Canadians can be proud of our government’s leadership in this time of crisis; I certainly commend the government’s desire and willingness to be part of a comprehensive, multilateral recovery plan for the poorest nation in the western hemisphere.
What is most encouraging to me about this particular effort is the strong focus on debt relief. This emphasis recognizes that while disaster relief and development aid are vital, forgiveness and relief of crushing foreign debt are essential if the country is to move forward with strength and sustainability. One lesson taught by history, exampled in the efforts of numerous developing nations to move forward while repaying foreign loans, is that these debts make it nearly impossible for them to do so.
Prior to the earthquake, Haiti was in debt to the International Monetary Fund for $165 million USD. Another $40 billion was owed to the World Bank. And then there are other foreign banks and nations – with Haitian indebtedness surpassing $1 billion at its peak. This is a massive debt for any nation, let alone one in which – following the most recent disaster – somewhere around 70% of the population is living in conditions of extreme poverty. More than 200,000 people lost their lives in the earthquake, and over 800 remain unaccounted for. About 300,000 were injured and 1.5 million people – in a country with a population of only 10 million – are now homeless. The total financial toll is estimated at more than $7.8 billion USD, equivalent to more than 120% of Haiti’s GDP in 2009.
Haiti’s history of debt is nearly as old as its’ nationhood. The nation of Haiti achieved independence in 1804, following the only successful slave revolt in history, which saw Haiti liberated from slavery and French rule. But by 1825, the country was living under a different kind of bondage – foreign debt. Haiti was required to pay reparations to French slave owners for their independence following the revolt. The initial sum demanded? 150 million francs. Freed slaves were forced to compensate their former masters for “loss of income”. It took 122 years to repay this debt.
Historians say that the massive toll that France exacted on Haiti played a significant role in the country’s subsequent descent into poverty, further debt and under-development. Years of foreign loans from the IMF, World Bank and other foreign institutions, together with years of corrupt political leadership crippled the country’s capacity to lay a foundation for strong, sustainable development. It is estimated that 40% of the current debt was incurred by former dictator Jean-Claude “Baby Doc” Duvalier and his family, who ruled between 1964 and 1986.
Additionally, as is often the case with impoverished nations, Haiti’s poverty is inextricably tied to the exploitation of its natural resources, which began long ago with the depletion of vast Mahogany forests to repay France. What should have served as a source of sustainable economic growth and natural treasure has been depleted solely for the repayment of foreign debt. And the resulting deforestation and soil erosion have in turn only exacerbated the frequent natural disasters to which the country is subject, and therefore, its poverty.
Immediately following the earthquake, Canadians responded with great generosity, contributing $220 million following an appeal to the Canadian public. As promised, the Canadian government is matching those donations, and will draw on half of that amount – $110 million – to fund part of the commitment made last week. International Cooperation Minister Bev Oda has indicated that none of the money raised in the public appeal will go toward Wednesday’s announcement; that money remains earmarked for Canadian and international aid agencies. Wednesday’s commitment also includes $8 million in debt relief to Haiti, part of a broader cancellation of the impoverished country’s overall $40 million World Bank debt.
The work of the Commission is vital. Debt relief is of the utmost importance for Haiti to plan for a better future than its past. There will be a need for strong, long term focus on environmental rehabilitation and sustainability, infrastructure, health care, education, economic and social development. It will be important to keep note of who will profit from these efforts and that they don’t lead to new indebtedness to foreign nations or institutions. Clinton has assured the world that there will be a ‘high level of accountability and transparency’ in the work of the Commission. Let’s hope that can be sustained once the eyes of the world turn to whatever crises may intervene during the development of a revitalized Haiti.
Canadians can be proud that we will be at the table, hopefully even participating in freeing a nation that has been impoverished by a history of debt.