Owen Bowcott and Charlotte Denny
The Guardian (UK)
June 17, 2000

Impoverished island forced to keep up its loan payments

Haiti hopes that six months from now it will have recovered millions of dollars embezzled by the former dictator Jean-Claude “Baby Doc” Duvalier and secreted in Swiss banks. It may also launch a prosecution against him in France, where he lives in exile.

But it is not the plundered funds that most preoccupy the leader of the poorest country in the Americas. President René Préval – a dapper agronomist with a ready smile – is more alarmed by the sums his impoverished country must disgorge to repay loans from foreign banks.

The fact that 40% of Haiti’s debt was incurred under Duvalier family misrule, when loans were regularly skimmed by regime cronies, reinforces the country’s resentment.

Last week in a state reception room, where the sound of traffic grinding through the sweltering slums of Port-au-Prince almost drowned conversation, he signed a petition calling on international creditors to annul the country’s swelling $1.2bn (£800m) debt.

For a Caribbean nation whose independence was achieved through the only successful slave revolt in history, the current campaign by the London-based organisation Jubilee 2000 to break the shackles of developing world indebtness has a strong political resonance.

Haiti has already signalled its difficulty in meeting interest payments to the World Bank. It is not among the countries to receive debt cancellation under the Heavily Indebted Poor Countries (HIPC) initiative.

“They say our debt is not high enough for relief,” says President Préval. “But it’s one of the reasons for the problems of this country. We need cancellation.” Outside the bleached, white splendour of the palace, chickens amble across the presidential lawn. Haiti is a country of desperate incongruities.

In teeming shantytowns, the most basic services do not exist. In the district of Christ-Roi, the body of a middle-aged man lay on a rutted track, face up with a broad gash to the head. People walked past.

Amid such poverty, the need for aid and investment is undisputed, but in its absence millions of Haitians want simply to escape. “We want to do things for the community,” said James Joussaint, director of a development association. “But people want to go abroad for economic reasons, for better health, better education, more security, so their children don’t have to work . . .” His voice trailed off, implying an endless list.

At home, education is seen as one escape route; private primary schools have sprung up all over. Hubert Milhomme, headmaster of Ecole El-Shaddai in Arcachon, looks on as his 18-month-old son, Hubens, plays on the floor and jokes that one day the boy will be a doctor.

But even this pillar of the community is dispirited: “The government pays nothing toward the school. Not even for a piece of chalk. There’s rarely any electricity. It gets diverted to the wealthy people in Petionville. Down here we suffer from tuberculosis and malaria.” He, too, talks wistfully of a life in the US.

The traditional way out has been over the border to cut sugar cane in the Dominican Republic, which at one stage last year was sending back 600 migrants a day.

The traffic in boat people heading for Miami is reviving – a clear indication of declining living standards.

Four hundred Haitians were found on a Bahamas beach in January after their ship ran aground. More than 1,000 Haitians have been sent back already this year, according to the US coastguard. Thousands more may have made it to Florida – or drowned.

Last month 10 Haitian policemen disguised as missionaries hijacked a local ferry. The catamaran, and its 121 pasengers, was found adrift in American waters after the fuel ran out. “We didn’t steal the boat,” explained one policeman, “we stole the destination”.

Colette Lespinasse runs a group for returned refugees. “Sometime the fishing boats are too full, there’s not enough to drink and they have to throw overboard those who become ill,” she says.

“One woman tried the journey four times. She had a young baby who died. She was so full of despair, she committed suicide by jumping into the sea.”

Attempts by the outside world to relieve the hunger and suffering have been undermined by previous, corrupt regimes, leaving today’s inheritance of mounting debt.

Camille Charlmers – who was an adviser to President Préval’s predecessor, Jean-Bertrand Aristide, and now runs a development organisation – deplores the country’s annual repayments of $45m. Jean-Claude Duvalier, he maintains “took $900m with him when he left [in 1986] – that’s almost the whole debt”.

Trade liberalisation has also done little so far for Haiti. Instability and poor government have discouraged western investment, and cheap US rice imports have been accused of undercutting small farms in the Artibonite valley – the country’s traditional rice bowl.

There are historical precedents for granting relief for what is known as “odious debt”. In 1970 Indonesia was rewarded with significant cancellations after General Suharto overthrew Sukarno. Debt repayments strike such a chord in Haiti because, after the slave uprising of 1791, France demanded “compensation” in return for granting independence. It took 100 years to pay off 550m gold Francs.

“Haiti was a financial colony for a century after independence,” says President Préval, sitting beneath portraits of Toussaint Louverture and Jean-Jaques Dessalines, the leaders of the slave insurrection.

“That is why Haiti is poor and has borrowed so much money. Within six months we are hoping to liberate some of Duvalier’s funds,” he adds. “We are also looking at taking legal action in France against him” for human rights offences.

A year of broken promises

• A year ago today in Cologne, the world’s seven richest countries, the G7, promised to write off $100bn of the $260bn owed to the west by the most indebted states.

• The G7 promised that 25 of the 40 countries identified by the World Bank and International Monetary Fund as the worst affected would receive help by the end of this year – provided lenders were satisfied that the borrowers had policies to ensure use of the funds to reduce poverty. Britain’s chancellor, Gordon Brown, promised that 11 would get through the programme’s hurdles by Easter.

• By mid-June, five countries have received reductions in debt payments and only one, Uganda, is anywhere near having its debts cancelled. The World Bank still hopes to get up to 20 countries through by the end of the year, but debt campaigners think it will struggle to push 15 through.

• So far, the west has cancelled $11.9bn worth of debt – most of it under agreements predating Cologne. The only extra debt relief since the west promised “deeper, speedier” debt relief last year has been an extra $629m for Uganda.

• Though Britain and most of its G7 partners have promised to cancel 100% of the debt owed to them individually (most of the money is owed to the World Bank and the IMF), Britain is the only one to do so. The other G7 countries are waiting until countries fulfil all the onerous requirements of the overall debt relief programme before getting out their chequebooks.