The World Bank announced today that they have cancelled the remaining $36 million in debt owed by Haiti. The Bank said that the cancellation was "made possible by contributions from Belgium, Canada, Finland, France, Germany, Ireland, Italy, Japan, The Netherlands, Norway, Spain, Sweden, and Switzerland." The decision comes nearly one month after the United States passed a law directing the "Secretary of the Treasury to instruct the U.S. Executive Directors at the World Bank, the International Monetary Fund (IMF)" to completely cancel Haiti's debt.
The International Monetary Fund, however, has yet to cancel Haiti's debt. According to IMF figures, Haiti's debt to the Fund stands at $282 million. Although interest rates on outstanding loans are zero until 2012, the IMF projects that obligation will reach nearly 3 percent of government revenue by 2014. This includes the $114 million loan the Fund approved for Haiti after the earthquake. In contrast, the World Bank has made $479 million available to Haiti in the form of grants.
Given that the US congress is pushing the treasury secretary to cancel Haiti's debt, and that the US treasury continues to hold an effective veto over the IMF, one may wonder why it is taking the IMF so long to grant debt relief to Haiti.