Gordon Brown. The decision by G7 countries to eradicate the debt of the ravaged country has been welcomed by charities and humanitarian groups.
…a nation buried in rubble must not also be buried in debt…
But is debt forgiveness the answer? David Roodman argues against it, saying the amount Haiti has to pay out on its total outstanding foreign debt only amounts to $25million over the next 3 years. And he goes on: I fear that calls to cancel Haiti’s debt are the old shoes of political activism. They make superficial sense. They feel good. But they will hardly help Haiti recover from the quake.
So is it misguided to cancel debts of poor nations on a small scale? Maybe it’s better to rework aid in the form on grants on a larger scale?
So what’s the best thing for Haiti? If David Roodman is right and the debt only amounts to a few million dollars, is the G7 misguided in it’s approach? And with news that the IMF has loaned Haiti over a $100 million, does that make the G7’s debt ‘forgiveness’ redundant?