“Haiti now has no further amounts payable to the World Bank,” World Bank Group President Robert B Zoellick announced in a statement last Friday. The Washington-based financial institution is cancelling the USD 36 million debt owed by Haiti to International Development Association (IDA) is part of their effort to help the country in its recovery and reconstruction efforts. IDA is the bank’s fund for some of the poorest countries across the globe. The IDA debt cancellation was made possible by contributions from 13 member countries including Belgium, Canada, Finland, France, Germany, Ireland, Italy, Norway, Spain, Sweden, Japan, The Netherlands and Switzerland. World Bank is also a trustee of the multi-donor Haiti Reconstruction Fund working to support the disaster-stricken country’s development. Brazil became the first country to contribute money to the fund earlier this month.

Four months had passed after a 7.0 magnitude earthquake devastated the poorest country in the western hemisphere, killing an estimated 300,000 people and left more than a million of its people homeless. Since the January 12 earthquake, the World Bank has already made available US$479 million in grants to support the impoverished country’s recovery and development, a commitment they will see through until the projected completion by June 2011. On top of that, a number of international donors pledged nearly $10 billion in long-term assistance to Haiti’s earthquake recovery efforts during a conference last March held at the United Nations headquarters.

Everyone’s Doing their Share

It could be recalled that In Haiti won USD1.2 billion in debt relief from the World Bank, the International Monetary Fund (IMF) and other creditors in July of last year. On April 26, US President Obama signed into law a bill calling for the United States to take the lead in forgiving debt owed to international lenders by earthquake-ravaged Haiti. The bill calls for Haiti to receive aid in the form of grants until Feb. 1, 2015.

Since then, the Inter-American Development Bank announced it would cancel the $447 million Haiti owed it, and convert remaining undistributed loans into grants. The International Monetary Fund have also begun to make moves to relieve Haitian debt. Some of its major lenders — comprising Venezuela and the G7 (which includes Canada, the UK, France, Germany, Italy and Japan apart from U.S.) — agreed to cancel all of its debts.

Haiti also owe Taiwan, among Haiti’s major lenders, some USD 88 million. But Taiwan could not fully cancel Haiti’s debts given the nature of the loans, offering instead to take over its interest payments for five years. Minister of Foreign Affairs Timothy Yang announced Taiwan’s debt reduction plan for Haiti, where the Taiwanese government pledge to shoulder the interest payments to local banks for five years, of which would start this year, as Haiti struggles to recover from the devastation that recently struck their country. Amid calls from the international community for Taiwan to cancel Haiti’s debts, Yan said the debt repayment plan was the “maximum amount” that Taiwan could “afford.” The Haitian government was made aware of Taiwan’s proposal and expressed its appreciation, saying the plan could substantially help it rebuild their country.

Since its independence in 1804, Haiti has been trying to survive by servicing its enormous debt while its people live on cents a day. The debt relief law, along with all efforts from around the world would begin eradicating their over $800 million debt. For Haiti, this has tremendous ramifications. True, there are debates going on in some countries like U.S. on their government’s spending spree with the money for Haitian earthquake relief, $5 billion in disaster aid for FEMA, $950 million for an Agricultural Credit Insurance Fund, $6 billion for extra State Department operations and even $219.8 million to cancel some debts owed by Haiti to the United States adding to the $13 trillion national debt, which breaks down to $42,000 for the average American. Any devastation to one part of the globe affects everyone in entirety – - – and most of the time, if not all, financially, but this one is for a good cause.