Legislation that in effect cancels more than $800 million in debt owed by Haiti to world financial institutions has cleared both houses of Congress and is on its way to White House.
The Debt Relief for Earthquake Recovery in Haiti Act, H.R. 4573, does not officially cancel Haiti’s debt. That will be the decision of international financial institutions such as the World Bank, International Monetary Fund, the Inter-American Development Bank and the International Fund for Agricultural Development.
What the bill does is direct Treasury Secretary Timothy F. Geithner to instruct the U.S. executive directors of the aforementioned institutions to “use the voice, vote and influence of the United States” to encourage them to cancel Haiti’s debt.
It also calls for the suspension of debt service payments and for the financial institutions to provide grants for the next five years before making additional loans to Haiti. The grants would help the poverty-stricken country recover from the Jan. 12 earthquake and boost economic development.
Historically, what the U.S. wants in those institutions, the U.S. gets. So once President Barack Obama signs the bill, it will be only a matter of time before the $828 million Haiti owes is forgiven.
The bill was supported by the U.S. Conference of Catholic Bishops.
Rep. Maxine Waters, D-Calif., ushered the bill through the House and made sure the Senate did not slow it down. From introduction to final passage April 14, the legislative process took less than 10 weeks.
Filed under: CNS