October 30, 2008 — vol. 44, no 12
World Bank: Storm-struck Haiti at ‘tipping point’
PORT-AU-PRINCE, Haiti — World Bank President Robert Zoellick warned last week that Haiti is at a “tipping point” after a spate of destructive tropical storms, but offered no immediate debt relief for the chronically impoverished country.Zoellick, ending a three-day visit last Wednesday, pledged long-term help to keep the desperately poor Caribbean nation from falling deeper into crisis but said the bank will not forgive its share of Haiti’s $1.7 billion in foreign debt for at least seven months.
Nearly 800 people were confirmed dead after four devastating storms hit Haiti in August and September. Roads and bridges washed out and more than half the upcoming harvest was destroyed, worsening a hunger crisis that had already helped fuel riots several months before.
Critics say forcing Haiti to keep making debt payments of more than $1 million a week will hurt recovery efforts and further deplete meager resources in the Western Hemisphere’s poorest country.
“It’s a humanitarian disaster down there. It’s kind of ridiculous that Haiti has to go through bureaucratic hoops,” said Dan Beeton of the Washington-based Center for Economic and Policy Research. “There’s no reason these institutions can’t just say, ‘OK, cancel it now.’”
Zoellick said last Wednesday that Haiti is on track to have its World Bank debt canceled by mid-2009 once it has met qualifications such as addressing corruption and increasing public investment, but that debt cancellation is up to the bank’s shareholders.
“Frankly, the issue is not just debt,” he said. “In this case, given the interest payments it’s a very small sum of money, and would be forgiven anyway over time. The key is to try and get the resources.”
Zoellick’s first visit to Haiti included a closed meeting with President René Préval and a helicopter tour of the flood-ravaged city of Gonaïves, where he said the devastation “makes your eyes pop.”
“I sense that Haiti is at a tipping point. It could go either way,” Zoellick said. “We have to deal with the immediate needs, to deal with the social instability, but there’s also a chance to build.”
He stressed the need for infrastructure and watershed-management projects to prevent similar damage from future storms in Haiti, where rampant deforestation has denuded its hills and left it susceptible to deadly floods.
The World Bank has pledged $25 million for emergency storm-relief grants that are to be approved next month. Millions more have been invested in private companies, and a $10 million grant was approved earlier for relief from the food crisis.
But Haiti owes far more in debt to multilateral organizations, including $540 million to the World Bank. It is slated to pay $54 million in debt servicing in the next fiscal year, even after some debt relief and rescheduling, the World Bank said.
(Associated Press)
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