January 25, 2010

Gillibrand Urges Feds To Provide Haiti Debt Moratorium

Haiti Faces $429 Million Of External Debt To The InterAmerican Development Bank In Addition To Other Debt Obligations

Washington, DC – U.S. Senator Kirsten Gillibrand urged Treasury Secretary Timothy Geithner to press the InterAmerican Development Bank (IDB) for a debt moratorium for Haiti. Currently, Haiti faces approximately $429 million of external debt to the IDB, as well as other debt obligations to the International Monetary Fund (IMF) and bilateral debt to Venezuela and Taiwan totaling almost $900 million. While the U.S. has established a trust fund to help service Haiti’s debt, this only addressed a fraction of the country’s total outstanding external debt. Since outstanding debt owed to the IDB is by far the largest amount, Senator Gillibrand believes that the proposed IDB moratorium would go a long way to lessen the financial burden on Haiti during this time of extreme suffering.

In her letter, Senator Gillibrand wrote, “In my view, Haiti's limited resources should be directed at recovery, not repayment for the foreseeable future.  As an influential member of the IDB board, the United States should take leadership and propose an immediate moratorium on Haiti’s debt service payments to the IDB.  During the moratorium, it is also critical that interest not accrue.”

Debt moratoriums have previously been instated during times of crisis. In 1998, the Paris Club agreed to a moratorium on debt service payments from Nicaragua and Honduras in the wake of Hurricane Mitch, and then again in 2005 for Sri Lanka, Indonesia, and the Seychelles because of the devastating effects of the tsunami.