PORT-AU-PRINCE, Haiti: Three months after being devastated by an earthquake on January 12, the nation’s debt burden is about to be reduced by US$50.7 million.
The International Fund for Agricultural Development (IFAD) – an international financial institution and a specialized United Nations agency dedicated to eradicating poverty and hunger in rural areas of developing countries – has approved a debt relief program that covers the money which the earthquake-ravaged country owes it.
The package was approved at the IFAD Executive Board meeting in Rome last week.
“The agreement provides the basis for permanent debt forgiveness of Haiti’s debt burden to our organization,” said IFAD President Kanayo Nwanze.
“Without this type of relief, Haiti would have been hard pressed to repay its outstanding loans to the organization, to the detriment of the critical reconstruction and development activities. With the generous contributions from our members – plus a significant investment on our part – we are breaking that cycle.”
Under the agreement to clear Haiti’s slate, IFAD said it will contribute up to 30 per cent of the debt relief requirement, with member states needing to contribute the remaining 70 per cent.
“A small portion of Haiti’s debt was already forgiven by organizations like IFAD under the Highly Indebted Poor Countries Debt Initiative, but the bulk remained,” said Josefina Stubbs, Director of IFAD’s Latin America and the Caribbean Division. “By relieving the country of this burden, we are freeing up funds for redevelopment and reconstruction.”
The process of reconstruction and development in Haiti has already begun.
IFAD said it had responded rapidly to the earthquake with a US$2.5 million grant for irrigation and watershed rehabilitation in a project that is expected to benefit some 12,000 households in rural areas directly affected by the earthquake.
The World Bank said the Haiti Reconstruction Fund is also now up and running, and has pledged another $189 million to the fund.
The Bank’s Director for the Caribbean, Yvonne Tsikata, said the Fund would benefit from at least 14 donor countries, from Brazil to Canada, Estonia, Saudi Arabia and the United States.