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Earthquakes, storms and colonial debt: The need for debt relief in Haiti
by Tess Woolfenden
1 September 2021

The Caribbean country of Haiti was hit by a devastating earthquake earlier this month, destroying tens of thousands of homes and taking the lives of nearly 2,000 people while a further 10,000 are missing or injured. It came only a few weeks after the assassination of the country’s President, Jovenel Moïse.

Haiti, one of the world’s poorest countries, is also vulnerable to the harsh realities of the climate crisis. Only a few days after the earthquake, the country experienced heavy rain as tropical Storm Grace approached, causing flooding and significant challenges for the humanitarian response.

Haiti is also still recovering from an earthquake that struck in 2010 in which 250,000 lives were lost and 1.5 million were displaced.

Just like many other countries in the Caribbean and around the world, Haiti’s crushing debts are hampering its ability to respond to crises. The origins of Haiti’s build-up of unjust debt are linked to colonialism.

After the successful slave rebellion of 1804 that secured the country independence from French rule, the French demanded 90 million gold francs (about $17 billion in today’s terms) from Haiti in compensation for the loss of income, property and slaves. This was 10 times the nation’s annual revenue at the time and was still being paid up until 1947.

This rebellion that secured Haiti freedom from colonial rule started on 21st August 1791, almost exactly 230 years ago today.

Payment of this colonial debt to France was only possible by taking out loans from American, French and German banks at high interest rates, crippling the economy for decades and trapping Haiti in spiraling debt. In 2004, President Aristide demanded that Haiti receive reparations for the payments they made to France. Soon after, he was overthrown by a US-backed military coup.

In the years after 1947, Haiti continued to receive loans from bilateral, multilateral and commercial creditors, continuing the unsustainable debt situation and undermining the country’s ability to fund healthcare, education and other vital public services. Many of these loans were taken out by oppressive and corrupt regimes such the Duvalier family (François “Papa Doc” and later his son Jean-Claude “Baby Doc”) who ruled Haiti for 22 years backed by the West because they were anti-communist and supported the US during the Cold War. Loans taken out by the Duvalier’s amounted to 45% of Haiti’s total debt in 2009.

After the Duvalier regime was overthrown in 1986, many Haitian civil society organisations emerged and began drawing attention to major issues facing the country, including unjust debt.

Following these efforts and the international support that followed, some of Haiti’s debt was cancelled. For example, in 2009, Haiti has $1.2 billion cancelled through the Heavily Indebted Poor Countries (HIPC) scheme.

In order to complete the scheme Haiti had to implement harsh austerity measures imposed by the IMF, and due to the limitations of the scheme, the country still had $900 million of debt by the time it had completed the HIPC process. Furthermore, after completing HIPC, lending to Haiti continued, leading to an unsustainable debt situation once again.

In 2019, the Haitian government were spending 54% of government revenue on paying its debt.

Haiti owes $2.2 billion to its creditors as of 2018, placing significant strain on the country’s ability to address the needs of the population, especially in the case of a devastating event like the earthquake that has just taken place.

A significant amount of this debt is owed to the government of Venezuela, but large sums are also due to be repaid to the IMF in coming years.

Since the onset of the pandemic, the IMF has cancelled $17 million of the Haiti’s debt through the Catastrophe Containment and Relief Trust (CCRT). However, payments will be expected to resume later this year.

Large scale debt relief would be a quick and simple way to free up resources for Haiti to address the aftermath of the earthquake and tropical storm. It is also a vital part of creating fiscal space for the country to address the climate crisis, sustainable development and other national needs in the mid and long run.

And yet, there is no internationally agreed way to suspend and cancel debt for countries in the immediate aftermath of shocks like earthquakes or hurricanes, and other existing debt relief initiatives like the G20’s Common Framework are not strong or robust enough to secure the debt relief levels required.

Without such measures, countries like Haiti will be left with paying debt to creditors rather than securing the immediate safety of their citizens in the event of an earthquake, hurricane or global economic recession, let alone upholding human rights in the long run.

With the G20 and COP26 approaching, global South governments, civil society organisations and communities will be making strong demands on global leaders to do better on debt relief. It is time global leaders listened to these calls and worked in partnership with governments and people most affected by unjust debt to put in place tangible and appropriate solutions.


Tess Woolfenden