$1.2 billion in debt relief approved for Haiti

MIAMI — Roughly two-thirds of Haiti’s total debt was cancelled Tuesday when three organizations that provide financial assistance to poor countries announced they’re forgiving $1.2 billion of what the Caribbean country owes.

The World Bank and the International Monetary Fund said their boards decided this week to end Haiti’s separate obligations to the two organizations. The move also triggered previously announced debt relief from the Inter-American Development Bank.

As of April, Haiti’s debt was more than $1.9 billion, according to the Washington-based Center for Economic and Policy Research.

“The debt relief will help us invest in growth and poverty reduction programs,” Haitian Finance Minister Daniel Dorsainvil said in a statement. “Haiti has demonstrated over the past four to five years that it can commit itself to a menu of reforms and respect this commitment.”

The World Bank and the International Monetary Fund added Haiti in 2006 to a program that allows poor countries to reduce what they owe by demonstrating progress in financial stewardship.

Haiti met that program’s targets by strengthening tax and customs administration, improving the management of public funds, improving spending on poverty reduction and auditing government accounts, World Bank officials said.

The Inter-American Development Bank had said in March 2007 that it would forgive $511 million of Haiti’s debt if it completed that program.

Haiti also approved an HIV and AIDS prevention and treatment plan, improved immunization rates, started programs to train teachers and send 50,000 more children to school and improved its spending on education, officials said.

Officials with the organizations congratulated the Haitian government for meeting its debt cancellation targets in a global economic downturn, even after the country struggled with skyrocketing food and fuel prices and the lashing from four tropical storms that killed some 800 people and caused $1 billion in damage.