Tuesday, September 19, 2006

SINGAPORE, (Reuters): Haiti qualifies for a debt write-off under the Highly Indebted Poor Countries (HIPC) Initiative, the International Monetary Fund said.

The fund said in July that HIPC relief could be worth $14 million in the first year to the impoverished, turbulent Caribbean country with potential additional contributions worth $22 million.

The donor community pledged $1.3 billion in 2004 to help Haiti rebuild after an armed rebellion toppled the government of President Jean-Bertrand Aristide.

In its statement, the IMF's deputy managing director, Takatoshi Kato, said Haiti had established a satisfactory track record since then.

But he said Haiti still faced daunting challenges, particularly in the areas of security, social conditions and sustained income growth.

As a result, the country would need "continued financial support from and engagement with the international community".

Further macroeconomic, structural and social reforms, as well as close attention to improving security, would be essential in enabling Haiti to reach the point where creditors agree to actually reduce its debt burden, Kato said.

To date, debt reduction packages have been approved under the HIPC initiative for 29 countries, providing $35 billion in debt-service relief over time.

The initiative was launched in 1996 with the aim of ensuring no developing country faces a debt burden it cannot manage.

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