External debt of Haiti

The external debt of Haiti is one of the main factors that has caused the country's persistent poverty. After the Haitians declared themselves free and the country independent in 1804, France demanded that the newly formed country pay the French government and French slaveholders the modern equivalent of US$21 billion for the "theft" of the slaves' own lives and the land that they had turned into profitable sugar and coffee-producing plantations. This independence debt was financed by French banks and the American Citibank, and finally paid off in 1947.

Sticker in Port-au-Prince demanding repayment from the French government

Later, the corrupt Duvalier dynasty added to the country's debts, and is believed to have used the money to expand their power and for their personal benefits. In the early 21st century, and especially after the devastating earthquake in 2010, the World Bank and some other governments forgave the remaining parts of Haiti's debts. France forgave a more recent loan with a balance of US$77 million, but has refused to consider repaying the independence debt.

Saint-Domingue

Haiti was formerly one of the richest New World colonies. Between the years of 1697 and 1804, under French rule, 800,000 West African Slaves were brought to what was then known as Saint-Domingue to work on the vast plantations that produced sixty percent of the coffee consumed by France and Britain and three quarters of the world's sugar.[1] Not only did Saint-Domingue account for one third of the entire African slave trade, but the conditions under which they lived and were treated were known to be some of the most cruel. The Saint-Domingue population reached 520,000 in 1790, and of those 425,000 were slaves.[1]

Independence debt

Haiti’s legacy of debt began shortly after gaining independence from France in 1804. In 1825, France, with warships at the ready, demanded Haiti compensate France for its loss of slaves and its slave colony. In exchange for French recognition of Haiti as a sovereign republic, France demanded payment of 150 million francs. In addition to the payment, France required that Haiti discount its exported goods to them by 50%.[2] In 1838, France agreed to reduce the debt to 90 million francs to be paid over a period of 30 years to compensate former plantation owners who had lost their property.[3] The modern equivalent of $21 billion was paid from Haiti to France.[4]

The transfer of wealth from Haiti to the French government and from Haiti to the various banks that financed the Independence Debt is well established. Detailed claims, submitted by former slave owners for compensation, including the monetary value of the "lost" slaves, and which formed the basis for the French government's demands have been documented.

Likewise, the terms of the 1825 Ordinance and accounts of its negotiation have survived.

The French government finally acknowledged the payment of 90,000,000F in 1893. It took until 1947 for Haiti to finally pay off all the associated interest of the debt.[5] The story of the first payment – 24,000,000 gold francs – being transported across Paris, from the vaults of Ternaux Gandolphe et Cie to the coffers of the French Treasury was recorded in detail. Historians have traced loan documents from the time of the 1825 Ordinance, through the various refinancing efforts, to the final remittance to National City Bank in 1947.[3]

Duvalier debt

From 1971 to 1986 Haiti was ruled by the corrupt and oppressive Duvalier family. Loans incurred during this period alone were estimated to account for approximately 40% of Haiti's debt in 2000, before debt relief was granted. These funds were used to strengthen the Duvaliers' control over Haiti and for various fraudulent schemes. Large amounts were simply stolen by the Duvaliers.

Initiatives to cancel Haiti's debt

Jubilee USA, Jubilee Debt Campaign (UK)[6] and others, called for the immediate cancellation of Haiti's debt to multilateral institutions, including the World Bank, International Monetary Fund (IMF), and the Inter-American Development Bank, based on the argument that this debt is unjust (under a legal term called odious debt) and that Haiti could better use the funds going towards debt service for education, health care, and basic infrastructure.[7]

The Haiti Debt Cancellation Resolution[8] had 66 co-sponsors in the U.S. House of Representatives as of February 2008.

Several organizations in the U.S. issued action alerts around the Haiti Debt Cancellation Resolution, and a Congressional letter to the U.S. Treasury,[9] including Jubilee USA, the Institute for Justice & Democracy in Haiti and Pax Christi USA.

Debt cancellation

Haiti had a total external debt of $1.8 billion at its peak.[10][11] Between 2006 and 2009, Haiti was added to the World Bank and IMF's highly indebted poor country initiative (HIPC).[12] In September 2009, following a program of economic and social reforms, Haiti met the requirements for completion of the HIPC program, qualifying it for cancellation of its external debt obligations. This cut the face value of the debt by $757 million[13] and future debt service (including interest) by $1.2 billion.[14]

Haiti's largest creditor, the Inter-American Development Bank (IDB), was part of the debt relief initiative, but the initiative only canceled loans made before 2005, and the IDB has lent more since. Haiti's debt to the IDB amounts to approximately half a billion dollars with debt service payments projected by the IMF to increase in the following years. The U.S. government has been paying this debt service on Haiti's behalf since before the quake.[15]

With the devastating effects of the early 2010 earthquake in Haiti there came renewed calls for a further debt cancellation from civil society groups. In light of the tragedy and new borrowing that lifted Haiti's debts back to $1.25 billion, groups such as the Jubilee Debt Campaign called for this debt to be dropped. Furthermore, during the aftermath emergency money was offered to the Haitian government from the IMF in the form of loans. Civil society groups protested the offer of loans and not grants for such an already heavily indebted country trying to cope with such destruction. Some have argued, however, that because Haiti's annual debt service payments are so low ($9 million a year, net of the debt service paid on Haiti's behalf by the U.S. government), canceling the debt would do little to help the country recover from the earthquake, and should not be a priority for activism.[13]

Agence France Press reported on 26 January 2010 that President Hugo Chavez of Venezuela said that Petrocaribe, Venezuela's cut-rate regional energy alliance, will forgive Haiti's debt. Haiti's debt with Venezuela is $295 million, about one-quarter of its foreign debt of $1.25 billion, according to International Monetary Fund figures.[14]

On 28 May 2010, the World Bank announced it had waived Haiti's remaining debts to the bank.[16] The value of the waiver was $36 million.[17]

In 2015, France forgave about US$77 million in modern-day debt, unrelated to independence.[18] In 2004, the Haitian government demanded that France repay Haiti for the millions of dollars paid between 1825 and 1947 as compensation for the property lost of French slaveholders and landowners as a result of the slaves' freedom. In 2015, the French government rejected this demand.

gollark: Well, you seem to have a different system in mind to them.
gollark: Some questions, then:- what form are they taking tax in- how big are the communities- where are things produced- how is production of things coordinated if it can't be done entirely by one community
gollark: Okay.
gollark: (And might make things worse, since you can't trade between communities as easily)
gollark: That doesn't address anything else I said.

See also

References
  1. https://canada-haiti.ca
  2. https://www.thenation.com/
  3. "Archived copy". Archived from the original on 2010-11-12. Retrieved 2011-03-08.CS1 maint: archived copy as title (link)
  4. Sommers, Jeffrey. Race, Reality, and Realpolitik: U.S.-Haiti Relations in the Lead Up to the 1915 Occupation. 2015. ISBN 1498509142. Page 124.
  5. Marquand, Robert (2010-08-17). "France dismisses petition for it to pay $17 billion in Haiti reparations". Christian Science Monitor. ISSN 0882-7729. Retrieved 2019-08-31.
  6. "Jubilee Debt Campaign UK". Jubilee Debt Campaign UK.
  7. "Archived copy". Archived from the original on 2007-02-08. Retrieved 2018-09-17.CS1 maint: archived copy as title (link)
  8. "109hr888ih" (PDF). Ijdh.org. Retrieved 3 October 2017.
  9. "Advocacy Our Work". Ijdh.org. Retrieved 3 October 2017.
  10. "Jubilee Debt Campaign UK : Country information : Haiti". Jubileedebtcampaign.org.uk. Archived from the original on 2010-01-20. Retrieved 3 October 2017.
  11. "Haiti the land where children eat mud". The Times. London. 17 May 2009. Archived from the original on 20 May 2009.
  12. https://www.imf.org/en/Publications/CR/Issues/2016/12/31/Haiti-Enhanced-Initiative-for-Heavily-Indebted-Poor-Countries-Completion-Point-Document-23281
  13. "For Haitians' Sake, Drop the "Drop the Debt"". Blogs.cgdev.org. Retrieved 3 October 2017.
  14. "Haiti: Debt Statistics and IMF support - Background Note". Imf.org. Retrieved 3 October 2017.
  15. "IDB - Haiti and the IDB". Iadb.org. Retrieved 3 October 2017.
  16. "World Bank cancels Haiti's debt". AFP. 29 May 2010. Retrieved 30 May 2010.
  17. Wroughton, Lesley (28 May 2010). "World Bank cancels remaining Haiti debt". Reuters. Retrieved 30 May 2010.
  18. "Hollande pledges Haiti investment". BBC News. 2015-05-13. Retrieved 2018-07-15.
This article is issued from Wikipedia. The text is licensed under Creative Commons - Attribution - Sharealike. Additional terms may apply for the media files.