Credit: Timothy Fadek/Polaris

Last month marked the fourth anniversary of Haiti’s catastrophic earthquake, an event CBS News labeled the “worst natural disaster in the history of the Western hemisphere.” The extent of the devastation is well chronicled at this point, as is the fact that Haiti was hardly a prosperous nation before the ground shook in 2010. After the quake, aid money and help of all kinds flowed in to the country from caring people and institutions around the world.

But even as money flowed in, other money flowed out. At the time of the earthquake, Haiti owed roughly one billion dollars to international creditors despite having just received roughly an equivalent amount in debt relief prior to the quake. This meant that in the aftermath of the earthquake, Haiti was sending money in debt payments each month that could have been spent rebuilding the country, providing clean water, and mitigating the cholera epidemic that followed soon after. Today, a sadly similar situation has presented itself in the Philippines, which has now sent almost $2 billion in debt payments to creditors in the aftermath of Typhoon Haiyan. Much of the Philippines’ debt is derived from the Ferdinand and Imelda Marcos regime, which spent borrowed funds on repressive instruments of the state, a nuclear power plant built on an earthquake fault at the foot of a volcano that did not produce a single unit of energy for the country, and, of course, on a spectacular collection of shoes.

Thanks to the work of anti-debt organizations and their supporters, Haiti’s debts, also largely the product of past dictatorial corruption, were virtually wiped away. Debt relief came from the World Bank, the IMF, the United States, Britain, and Venezuela among others. The concept of wealthy institutions and governments asking Haiti for any amount of money in the wake of such a tragic disaster was a compelling narrative that moved people to action. It was a great victory for Haiti, one rooted in notions of both justice and compassion. It was also short lived.

Just days after the earthquake, new loans were extended to the Haitian government, some of which may or may not have included the type of harmful conditions that are the hallmark of the history of debt in the developing world. It is, of course, hard to tell sometimes. Loan contraction is so often done in secret, with the details of the agreements often kept hidden even from a country’s legislature. The lack of transparency has contributed greatly to the explosion of debt in the developing world, much of it illegitimate in nature. Regardless, the end result was that Haiti’s debt relief was temporary. World Bank and IMF figures for 2012/2013 show Haiti’s debt to once again have topped $1 billion, reaching 17% of GDP.

In some sense, this is not surprising. After all, an impoverished country in the midst of an expensive nationwide reconstruction effort is clearly going to be in need of additional funds. The slate was not wiped clean. But Haiti’s story also demonstrates that debt relief, while critical, is merely addressing a symptom of a greater problem. If countries like Haiti are to get out from under their debts and thrive, the entire international system of lending and borrowing must be reformed.

The good news is that many of the needed reforms are the type of common sense measures that have the ability to garner support from a broad range of actors of various political persuasions. International rules promoting responsible lending and borrowing would include a series of decidedly non-radical guidelines such as “don’t lend money to a government without a clear idea of how that government would pay it back; “if you lend money to a country to build a bridge, make sure there is a process in place to ensure that a bridge is built;” “don’t lend money that is going to be used to suppress human rights or destroy the environment;” etc. A framework of these rules would encourage responsible lending and deter irresponsible behavior on the part of international creditors, while simultaneously offering citizens in the developing world the opportunity to challenge debts based on future loans that violated those rules. This would be a major step forward not just for confronting the debt crisis, but for promoting human and environmental rights around the globe.

The lesson from Haiti is that while disasters can sometimes serve as catalysts for change, that change is often only as long-lasting as the glare of a television camera. The phrase “responsible lending and borrowing” may not have the emotional pull that so many of us feel from issues like war and peace, abortion and gay marriage, justice and human rights. It should, however, be on the radar screen of anybody concerned with the plight of the world’s poorest people, from Port-au-Prince to Manila and beyond.


Andrew Hanauer is the Outreach Director at Jubilee USA, a non-profit advocacy organization that works to build a global economy that serves the world’s poorest people. He lives in the San Francisco Bay Area with his wife and three children. (The views expressed here do not necessarily represent the views of his employer).

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