France asks Haiti’s creditors to cancel debt quickly, soothing woes that began with Napoleon

France asks Haiti’s creditors: cancel debt quickly

PARIS — France on Friday urged Haiti’s creditors to speed efforts to cancel the impoverished Caribbean nation’s debt, a stranglehold that began two centuries ago when Napoleon demanded reparations for the island’s independence.

In 1825, France demanded 150 million francs in gold as reparations for lands lost by former slave owners. Haiti took massive loans from American, German and French banks at exorbitant rates of interest to pay back France.

The repayments to Haiti’s former colonial master trapped the Caribbean nation in a downward economic spiral that has helped make it the Western Hemisphere’s most impoverished nation, according to Alex von Tunzelmann, a British historian who is writing a book about Haiti and its Caribbean neighbors.

The repayments “deformed the country’s economy,” she said. “For all of the 19th century and most of the 20th century, Haiti was unable to develop normally.”

Even though the debt eventually was reduced to 60 million francs plus interest, it was not until 1947 that Haiti paid it off.

In 1900, the Haitian government was spending 80 percent of its budget on repayments. A succession of leaders who looted the country made the problem worse, she said.

Though the Paris Club of 19 creditor nations, including the United States, agreed in July to clear Haiti’s remaining $215 million debt to club members, the process can still take years to finalize.

French Finance Minister Christine Lagarde said she asked members of the informal club to speed up the process.

Club members agreed to cancel $62.7 million under the International Monetary Fund and World Bank’s initiative for heavily indebted poor countries and another $152 million through bilateral deals.

For its part, France wants to quickly cancel Haiti’s remaining €54 million debt to Paris, after already having canceled €4 million before the quake, Lagarde said.

“France should probably be paying absolutely enormous reparations to Haiti” given the history, said Nick Dearden, director of the Jubilee Campaign for the debt of poor countries to be dropped.

Lagarde said Friday she also is asking nonmembers Venezuela and Taiwan, who are owed significant amounts by Haiti, to help in debt reduction.

This follows the cancellation of $1.2 billion in debt last month by the World Bank, IMF and Inter-American Development Bank, representing 60 percent of Haiti’s debt.

Dearden said Haiti still owes $641 million in total debt, and Haiti is paying $10 million a year on multilateral debt repayments.

He said Jubilee is “extremely worried” about the IMF’s announcement Thursday that it will loan $100 million to Haiti to help it with the difficult task of rebuilding.

“Haiti does not need its debt stock added to,” he said. “We are calling for absolutely all of Haiti’s debt to be canceled now.”

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AP Business writer Greg Keller in Paris contributed to this story.

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