Haiti's debt approaches $2 billion dollars as it recovers from Hurricane Matthew and remembers the devastating earthquake that shattered the country seven years ago. After the 2010 earthquake, most of Haiti's debt was wiped out following a campaign led by Jubilee USA. $300 million in Haiti's debts were cancelled through a specially created International Monetary Fund (IMF) trust to aid low-income countries struck by natural disasters.
While Haiti received a $41.6 million interest-free loan from the IMF's "Rapid Credit Facility" to help with Hurricane Matthew recovery, Haiti does not meet the IMF's criteria to qualify for debt relief.
"Debt relief that Haiti received over the last ten years was essential to help one of the poorest countries in the world," noted Eric LeCompte, Executive Director of religious development organization Jubilee USA. "Haiti's debt is rising again, it lacks enough revenue to cope with Hurricane Matthew and meet the needs of its people."
After Haiti's 2010 earthquake, Jubilee USA moved the IMF to create the Post Catastrophe Debt Relief fund. In the height of the Ebola crisis, Jubilee USA worked with the IMF to expand the trust fund to help other afflicted countries. The Ebola affected countries received $100 million in debt relief and additional zero interest lending.
"We've seen some important innovations at the IMF to aid poor countries in times of crisis," said LeCompte who works with UN agencies on global debt policies. "Unfortunately, poor countries only receive debt relief if they meet IMF criteria that the disaster impacted most of a country."
Across the Caribbean, small developing islands experience high rates of indebtedness, are vulnerable to hurricanes and don't qualify for existing debt relief instruments. The Bahamas, also recovering from Hurricane Matthew, saw debt rise by 30% in the past four years.
"Our financial system still doesn't have enough tools or the right kind of tools to provide debt relief and rapid debt restructuring in the face of crisis," stated LeCompte.
Read more about Haiti's debt relief