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Haiti, debt, the IMF, and what we should be doing instead of texting

January 21, 2010

So here’s the deal.  Texting HAITI or QUAKE or YELE to the right number is, well, it’s something.  And if you can look me in the eye and tell me that that’s all you can do, then you should text the word of your choice to the number of your choice, preferably the matching one.

But our real chance to support Haiti over the long haul–and yes, this is going to be one very long haul–is elsewhere.

Haiti has spent the last 150 years under an extreme debt load.  That means that they’ve paid a HUGE percentage of their export earnings in debt service.  That’s money that could have been used to build roads, enforce building codes, train the police force, pay teachers, and develop a healthcare infrastructure.  Instead it got used to pay interest on a loan.

If we’re serious about earthquake recovery that does more than just get Haiti back to the survival side of starvation, we should be spending as much energy looking at deleting the nation’s debt as we are scrambling to get crisis assistance to the survivors.  And chin up, there is reason to be encouraged.

The IMF announced a $100 million loan a few days ago.  Under pressure from international debt relief activists, they clarified the terms of the loan yesterday, announcing that it’s an interest free emergency loan (and doesn’t carry the same conditions as the original loan).  Even better is this statement from the IMF’s Managing Director:

The most important thing is that the IMF is now working with all donors to try to delete all the Haitian debt, including our new loan. If we succeed—and I’m sure we will succeed—even this loan will turn out to be finally a grant, because all the debt will have been deleted.

I don’t trust the IMF.  I really don’t.  But this isn’t vague, dancing-around, PR language.  It’s concrete and, well, very unlike the IMF I know.  And that gives me hope.

Also, if you want to get a handle on this whole debt thing, I can’t recommend this article enough.

Jonas

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