Mechanism That Cancelled Haitian Debt Post-Earthquake Could Help Ebola-Affected West Africa

Washington DC – January 12 marks the five-year anniversary of Haiti’s 2010 earthquake. The 7.0 quake killed an estimated 230,000 people, injured 300,000 more and displaced 1.5 million Haitians. The earthquake also took an enormous toll on Haiti’s economy. The year before the disaster, Haiti’s economy grew 3.5 percent – the year after the quake, its growth was negative 5 percent. Even before the earthquake, Haiti was the poorest country in the Western Hemisphere.

“Too many people died during the earthquake because they lived in unsafe conditions,” said Eric LeCompte, Executive Director of the religious development organization Jubilee USA. “This anniversary reminds us that poverty makes natural disasters even more deadly.”

In the quake’s aftermath, Jubilee USA called on the international community to cancel Haiti’s debt. At the time, Haiti owed nearly $1 billion in external debt. In April 2010, President Obama signed into law the Debt Relief for Earthquake Recovery in Haiti Act, calling on international financial institutions to cancel Haiti’s debt and provide grants rather than loans to fund recovery. The International Monetary Fund (IMF) cancelled nearly $300 million in Haitian debt in July 2010. The debt relief money came from a new fund the IMF established following Haiti’s earthquake called the Post Catastrophe Debt Relief Trust (PCDR).

“The IMF’s debt relief fund was the catalyst that led to debt relief for one of the poorest countries in the world,” noted LeCompte who serves on United Nations expert groups on debt issues. “Now, as we look to Ebola-stricken West Africa we see the same fund can tackle debt in some of the world’s poorest countries again.”

In November, the White House called for $100 million in debt relief for Ebola-impacted West African countries. The Administration proposed that the money come from the PCDR and took its debt relief plan to the G20. The IMF is currently considering a financing package that could include debt relief from the same special fund. In the year before the Ebola outbreak began, Guinea – where the epidemic started – spent more money on debt than on public health. In 2013, Guinea, Sierra Leone and Liberia spent $80 million servicing debt.

“West Africa needs debt cancellation now,” said LeCompte. “We pray this anniversary helps move the international community to act.”