Haiti and the Inter-American Development Bank

Why? The Inter-American Development Bank has conditioned its debt relief for Haiti on the country’s successful completion of the Heavily Indebted Poor Country Initiative (HIPC). Haiti has been in HIPC for 10 months, but just reached the first marker (or “decision point”) in November. Completion of HIPC is a minimum of three years away. The other four countries involved have completed the HIPC process, and should see debt cancellation immediately. It is important to note that the HIPC process was established by the International Monetary Fund and the World Bank; the IDB is under no obligation to tie its debt cancellation to HIPC.

In theory HIPC is supposed to commit governments to reform measures ensuring that debt savings are targeted to poverty reduction, transparency and good governance. Yet, the lending practices of these institutions have not historically aligned with these goals and are actually biased against Haiti’s popularly elected governments. Of the roughly $600 million that Haiti supposedly owes the IDB, only 43% was actually disbursed to an elected government.

Read the entire piece by Tom Ricker: