Institute for Justice and Democracy in Haiti

Taiwan approves debt reduction proposal for Haiti

By Shih Hsiu-chuan, Taipei Times

The Executive Yuan has approved a debt reduction proposal for Haiti, which will see the government repay the interest payments on the Caribbean ally’s debt to Taiwan for five years, Minister of Foreign Affairs Timothy Yang  said late on Monday night.

The move comes after other major donor nations and some international lending institutions forgave about 80 percent of Haiti’s external debt — estimated at US$1 billion — to help with reconstruction after the country was struck by a devastating magnitude 7 earthquake on Jan. 12.

Yang confirmed that Haiti owed Taiwan US$88 million during a question-and-answer with lawmakers at the legislature’s Foreign and National Defense Committee last month.

Under the approved debt-­reduction proposal, the government will appropriate public funds to help Haiti pay interest on the loan over five years and will allow Port-au-Prince to settle the debt with a repayment plan it agrees to after the period. Yang declined to reveal the amount needed to cover the interest payments, saying that the ministry would discuss the proposal with Haiti before it is finalized.

The debt-reduction plan partially answers international appeals for help from countries including Canada, the US, the UK, France, Germany, Italy, Japan and Venezuela, as well as the Inter-American Development Bank and the World Bank.

Taiwan, however, did not meet calls from the US Congress, which passed bills last month urging the US Treasury secretary to use the “voice, vote and influence of the US” to urge all of the Caribbean island’s creditors to cancel “immediately and completely” Haiti’s debts.

The ministry previously said that it offered a debt reduction plan rather than completely canceling the debt because the money was taken from the country’s foreign reserves via lending contracts with two commercial banks and did not come directly from the treasury.

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