Key Haitian debt repeal touted

Move could put onus on World Bank

If the $447 million to the organisation were cancelled, the act would dwarf the World Bank's announcement today of a US$65 million grant to assist Haiti with rebuilding its infrastructure.

A statement from the World Bank said the $65m would help restore key Haitian government economic and financial functions, "including data recovery, revenue and expenditure management, accountability and transparency functions in the ministry of economy and finance and other key institutions."

But the $65m in funds are already part of a US$100m grant the World Bank announced for Haiti one day after the January 12 quake.

Donors summit proposes $4bn

A separate announcement on Wednesday from the prepatory committee for the March 31 Haiti donors summit proposed giving the Caribbean nation more than US$4bn in reconstruction funds.

But even by the World Bank's own account, Haiti will need US$11.5 billion dollars over three years to rebuild.

Debt remains sticking point

Despite announcements of financial aid, debt is the crucial developmental sticking point for Haiti.

The G7 - Canada, France, Germany, Italy, Japan, the UK and the US vowed in February to cancel their remaining bilateral debt with Haiti, but foreign debt remains of around $US890 million - a staggering amount even before the country's weak economy was devastated by the earthquake.

And while the Paris Club have agreed to cancel debt to its members of over US$200m, 27 per cent of the country's foreign debt of US$890m is owed to the World Bank; at the same time that the Bank announces aid packages, the debt remains.

But with 41 per cent of that US$890m owed to the InterAmerican Develop-ment Bank, any cancellation on the IDB's part would go some way to assisting Haiti.

Although the bank is based in Washington,  the US maintains just over 30 per cent of the voting powe rin the internationally-structured organisation. which lends to Latin American and Carribean nations.