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Bill To Cancel Haiti's Debt Clears House Hurdle

First Posted: 05/04/10 06:12 AM ET Updated: 05/25/11 04:45 PM ET

Haiti

A House subcommittee approved a measure on Thursday to press major international financial institutions to completely cancel all debts owed by Haiti, where a major earthquake devastated what little capacity Haiti had to pay the debts back.

The International Monetary Policy and Trade Subcommittee approved the Debt Relief for Earthquake Recovery in Haiti Act, introduced by Rep. Maxine Waters (D-Calif.), which also aims to encourage direct assistance in the form of grants from those institutions, rather than loans.

The bill would require the Secretary of the Treasury to instruct the U.S. Executive Directors at the International Monetary Fund (IMF), the World Bank, the Inter-American Development Bank (IDB), and other institutions to use the voice, vote, and influence of the U.S. to accomplish the debt forgiveness. Waters has been a longtime champion of debt-relief for Haiti.

"The moral case for canceling Haiti's debt is clear," said Barney Frank (D-Mass.), Chairman of the House Committee on Financial Services, "and the Committee stands prepared to continue to work with the Administration to authorize a swift and substantial U.S. commitment to comprehensive multilateral debt cancellation for Haiti."

Haiti, the poorest country in the Western Hemisphere, owes $828 million to multilateral development institutions, according to the Department of the Treasury, including $447 million to the IDB, $284 million to the IMF, $39 million to the World Bank and $58 million to the International Fund for Agricultural Development.

The idea that Haiti owes anybody for anything is a striking one considering the nation's history.

"Haiti faces enormous challenges now, and the burden of paying off foreign debt would prevent the nation from taking necessary steps to help its people at this perilous time," said Waters. "I introduced H.R. 4573 so that Haiti can use its limited resources to make both immediate and long-term investments in essential humanitarian relief, reconstruction and development efforts."

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