External debt of Haiti

Haiti’s legacy of debt began shortly after gaining independence from France in 1804. In 1825, France, with warships at the ready, demanded Haiti compensate France for its loss of slaves and its slave colony. In exchange for French recognition of Haiti as a sovereign republic, France demanded payment of 150 million francs. In 1838, France agreed to reduce the debt to 90 million francs to be paid over a period of 30 years to compensate former plantation owners who had lost their property. The modern equivalent of $21 billion was paid from Haiti to France.

The transfer of wealth from Haiti to the French government and from Haiti to the various banks that financed the Independence Debt is well established. Detailed claims, submitted by former slave owners for compensation, including the monetary value of the “lost” slaves, and which formed the basis for the French government’s demands have been documented.

Likewise, the terms of the 1825 Ordinance and accounts of its negotiation have survived.

The French government finally acknowledged the payment of 90,000,000F in 1893. It took until 1947 for Haiti to finally pay off all the associated interest of the debt. The story of the first payment - 24,000,000 gold francs – being transported across Paris, from the vaults of Ternaux Gandolphe et Cie to the coffers of the French Treasury was recorded in detail. Historians have traced loan documents from the time of the 1825 Ordinance, through the various refinancing efforts, to the final remittance to National City Bank in 1947.

From 1957 to 1986 Haiti was ruled by the corrupt and oppressive Duvalier family. Loans incurred during this period alone were estimated to account for approximately 40% of Haiti's debt in 2000, before debt relief was granted. These funds were used to strengthen the Duvaliers' control over Haiti and for various fraudulent schemes. Large amounts were simply stolen by the Duvaliers.

Jubilee USA, Jubilee Debt Campaign (UK) and others, called for the immediate cancellation of Haiti's debt to multilateral institutions, including the World Bank, International Monetary Fund (IMF), and the Inter-American Development Bank, based on the argument that this debt is unjust (under a legal term called odious debt) and that Haiti could better use the funds going towards debt service for education, health care, and basic infrastructure.

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