The executive board of the International Monetary Fund has approved the cancellation of the country’s $268 million debt to the fund, reports CNN.
The board also approved a request to support reconstruction in Haiti for three years. The arrangement will provide about $60 million over three years to boost Haiti’s international reserves and help the central bank manage potential swings in the value of the local currency.
The cancellation of existing debt was advocated by IMF Managing Director Dominique Strauss-Kahn in the days following the quake as part of an international effort to launch a plan for the reconstruction of the country. The debt relief is financed by the Post-Catastrophe Debt Relief (PCDR) Trust Fund, recently established by the IMF to help very poor countries hit by catastrophic natural disasters.
“The new program provides a strong and forward-looking framework to support economic stability and reconstruction in the country, and will also help catalyze donors’ contributions,” the IMF said in a posting on its website.
It’s been six months since the quake and more than 1.5 million people remain in temporary camps like the one pictured above. More than 220,000 people died and 60 percent of the government infrastructure was destroyed. More than 180,000 homes were left unlivable.
“Improving the business environment and fostering private credit and investment will be essential to support growth,” said Charles Castel, governor of the Bank of the Republic of Haiti, report “The fund’s technical assistance will help rebuild economic institutions and build capacity.”
Recovery has been slow, with agricultural production, construction and textile manufacturing providing some economic activity. Still, GDP is projected to grow by 9 percent in fiscal year 2011-12, due mostly to reconstruction activity, and by 6 percent by 2015.
In March, the international community pledged $9.9 billion to Haiti’s reconstruction, of which $5.3 billion is to be disbursed over the coming 18 months. Most of the money hasn’t been paid out yet, but the donors have until the middle of next year to get the funds to the Haiti recovery commission.
Photo by Edyta.Materka via Flickr.