Haiti Earthquake | January 23, 2010 | 14 comments

IMF Loan to Haiti

source: http://www.thenation.com/blogs/notion/519364/imf_clarifies_terms_of_haiti_s_loan

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peterzylstramoore
I have been posting extensively as have others on the way conditional loans and imperial policies have forced Haiti towards destructive economic policies that have left Haiti as susceptible as they were to the earthquake. I have also written on how we should ensure that Haitis desperation was not used to force it into further economic compliance. I have really positive news which says some great things about the IMF and the US given their degree of control over the IMF. The article starts here:

Last Friday I wrote about the IMF's new $100 million loan to Haiti. I cited debt relief activists who told me that the new loan would be an extension of the IMF's existing loan of $165 million. This information was confirmed by the IMF's press release, which stated that "emergency financing would be provided as an augmentation to the existing IMF-supported arrangement with Haiti under the Extended Credit Facility [ECF]." The IMF's announcement provided no further information about conditions that may or may not be attached to the loan and made no mention of future debt relief for Haiti.

My post was based largely on an analysis by Soren Ambrose, the development finance coordinator of ActionAid International, who concluded that augmenting the existing ECF loan to Haiti would impose the same conditions as the original loan. Those conditions include raising prices for electricity, refusing pay raises for any public sector employees except those making minimum wage and keeping inflation as low as possible. Ambrose says that he doesn't know of any established procedure that would exempt an augmentation of an existing program from the program's conditions. (His analysis also noted that Haiti's existing program with the IMF was due to expire at the end of this month and that negotiations on the loan's terms were likely underway already.)

As the IMF announced its $100 million loan under vague and presumably onerous terms, debt relief activists like the folks at Jubilee USA were already calling for a different kind of global response. They were demanding that aid to Haiti come in the form of grants, not loans. But given the magnitude of the crisis and the fact that the IMF does not issue grants, they welcomed the IMF loan in the hopes that its terms could be altered in the future and that Haiti's entire debt could be canceled. At the same time, Naomi Klein and others warned about the possibility that the earthquake would be used as a pretext to amp up Haiti's exposure to the shock doctrine. Activists started a Facebook group, No Shock Doctrine for Haiti, and in less than a week, it has attracted almost 18,000 members. Appeals for debt relief and for the recognition of Haiti's economic sovereignty were written to the Obama administration, the IMF, the World Bank and anyone else who might play a role in Haiti's reconstruction.

Today, the IMF put out an announcement clarifying the terms of its new loan to Haiti--it's "an interest-free loan of $100 million in emergency funds." A spokesman for the IMF emailed me to confirm that "the US$100 million loan does not carry any conditionality. It is an emergency loan aimed at getting the Haitian economy back to function again..." The IMF's managing director Dominique Strauss-Kahn said in a statement that the IMF would immediately work to cancel the entirety of Haiti's debt ($265 million) to the fund:

"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."

In other words, as the IMF is processing a loan, it is also making a public promise to try to cancel it.

http://www.thenation.com/blogs/notion/519364/imf_clarifies_terms_of_haiti_s_loan

(image here: http://www.iadb.org/news/images/medium/carrefour375.jpg)
  1. groups:
    Community,   Haiti Earthquake,   IMF Watch
  2. tags:
    World News,  Finance,  Business,  International Monetary Fund,  3 more
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14 comments // IMF Loan to Haiti

  • corndog67
    • 0
      corndog67  

    • Peter, I read the article. My post reflected my opinion that any money that comes into Haiti, a great deal will end up in one of those 6 families hands. If you can't see that, well, I guess that is your opinion, and you are entitled to it. Of all the foreign aid that has come into Haiti, whether loans, grants, donations or whatever, you have 6 families that have nearly all the money in that country, along with DIPLOMATIC STATUS, bought with that money. It is all just money down the toilet. Haiti can not take care of it's own people. It is not our job, nor the rest of the world, to take care of Haiti's people. Send them a little aid, maybe even some volunteers to help them rebuild, but it is not our business to try to bring them into the current times, they MUST do something about these 6 families just taking everything there is there, or else history will just repeat itself again.

      And white colonialists? That was over 200 years ago. Even Haiti must change, somewhat, in 200 years. It is not up to us, the US, or the IMF, to take over Haiti's government, or install a government of our choosing, to run their shit.

      You're blaming the Popa Doc/Baby Doc deal, he was elected in '57, until '86, which was 24 years ago, on what is going on now. Things change, things MUST change. But that change has got to come from within their own souls/borders, not ours.

    • 2 years ago
  • RaceBannon
    • 0
      RaceBannon  
    • corndog67:

      I have an idea make those families powerless by empowering the people. Modernize them, educate, feed them so when its all done the new enlightened, politically dangerous haitians will look to those families you speak of and say "this is wrong, inhumane, and an utter injustice" when they can do this then the elite will have problems.

    • 2 years ago
  • RaceBannon
    • 0
      RaceBannon  

    • ditto elli, I'd take it further Haiti needs to be brought into the modern world altruistically. We should be sending engineers and supply. Haiti doesn't need money it needs infrastructure, this can be done without pretending to hand them a grant.

    • 2 years ago
  • Elligirl
    • 0
      Elligirl  

    • I remain very skeptical. The IMF makes promises with one hand behind its back. It knows how short the American attention span is. If Haiti is later struggling under its debt load, who will say it's due to IMF loans instead of due to the terrible natural disaster it faced?

    • 2 years ago
  • JonRaymond
  • peterzylstramoore
    • 0
      peterzylstramoore  

    • Corn Dog,
      did you even read the article? The article is not bashing the IMF, it's recognizing that they did something right this time... I think it's fantastic when people write to criticize without even taking the time to read.
      I realize that a few rich men run Haiti run the country but I don't know what your point is. So descendents of white colonialists still run the country. And this proves that indegenous Haitians deserve poverty? I also recognize that these rich men have been supported through international institutions and other countries.
      You obviously haven't read any of the articles that you are quick to criticize about the US role in supporting the Baby Doc Dictatorship, and about how he robbed the treasury on the way out, for which Haiti had to take a lone to repay. This lone from the IMF forced them to adopt policies that destroyed their economy. The US was involved in two coups against Aristide the popularly elected leader, manipulating him by allowing him back into the country after he again gave up economic policy to the US whiich further devastated the country, before cutting off aid, and propping up dissidents, and then supporting another coup that shipped him out of the country.

      Corn Dog, if we are to have a discussion it takes reading what the person you are having a discussion with is posting. If you don't want a discussion but to merely post assinine comments that reflect no self-criticism and make clear that you haven't even read the posts that you are criticizing I suggest you remain quite, because you're simply making people from your perspective look ignorant and uninformed, when some of them are not.

    • 2 years ago
  • corndog67
  • JonRaymond
    • 0
      JonRaymond  

    • http://www.facebook.com/group.php?v=wall&gid=292737727221
      Join the Facebook group No Shock Doctrine for Haiti.

      The loan is one aspect of a shock doctrine, but the U.S. occupation is the other aspect here. if the U.S. occupies Haiti, do they effectively get to control where the loan money goes? Is Haliburton waiting in the wings. There are reports that oil reserves exist under Haiti.

      We cannot let this IMF news lull us into complacency while the U.S. continues with it's Haiti occupation.

    • 2 years ago
  • JonRaymond
  • atomiclegion
  • JanforGore
    • 0
      JanforGore  

    • Oh, and just let me add that I do understand that planting anything will not happen anytime soon as their ecology has been totally destroyed by past IMF actions as well. It will take some years to actually rebuild their soil first, which is very sad. However, a major reforestation effort taking place in Haiti would go a long way to not only revitalizing their soil, but their biodiversity as well as working to protect them from the severity of hurricanes. Deforestation was one of the main reasons why the ferocious hurricanes that hit them the past few years did so much damage. Reforesting Haiti should be an environmental priority once they come out of the rubble of this disaster. It would do much to also rebuild their shattered souls.

    • 2 years ago
  • JanforGore
    • 0
      JanforGore  

    • Wonderful development. Let's hope they really mean it this time. But it has to go beyond this. It has to go to allowing Haitians the opportunity to plant their own food and have self determination, and be able to thrive without organizations like the IMF, WTO, and World Bank continuing their stranglehold in other ways. And that then leads to the companies in Haiti like Coca Cola, Disney etc, that have been accused of human rights abuses. Will that continue as well? Hopefully our voices will be loud enough to also end these practices as well.

    • 2 years ago
  • peterzylstramoore
  • peterzylstramoore
    • 0
      peterzylstramoore  

    • Klein says that this is "unprecedented in my experience and shows that public pressure in moments of disaster can seriously subvert shock doctrine tactics." Neil Watkins, Executive Director of Jubilee USA, likewise hails the IMF's response. "Since the IMF's announcement last week of its intention to provide Haiti with a $100 million loan, Jubilee USA and our partners have been calling for grants and debt cancellation--not new loans--for Haiti. We are pleased that Managing Director Strauss-Kahn has responded to that call."

      Watkins and others will continue to follow the issue, holding the IMF to its commitment to debt relief and non-conditionality. They're also pressing the case on Haiti's other outstanding debt. The largest multilateral holders of Haiti's debt are the Inter-American Development Bank ($447 million), the IMF ($165 million, plus $100 million in new lending), the World Bank's International Development Association ($39 million) and the International Fund for Agricultural Development ($13 million). The largest bilateral loans are held by Venezuela ($295 million) and Taiwan ($92 million).

      The lesson: global activism can work, especially in a moment of such acutely visible human need. Keep up the mobilization, on Facebook and in real life.

      Richard Kim

    • 2 years ago
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