Multilateral development bank pledges to maintain credit lines despite the ongoing political crisis
By Mick Bowen
The Inter-American Development Bank (IDB) will still provide credit lines to Haiti, despite a deepening political crisis in the country.
“Haiti is an important country for us as well as the Caribbean, so we are not going to drop support,” said a loans source at the IDB.
The source did not say if the IDB and other lenders could charge higher interest rates for loans to Haiti in the coming months.
In January, the IDB approved a $125m grant for a water and sanitation project in northern Haiti, providing funds for the national water agency Dinepa to improve services to 205,000 homes in Gonaïves, Cap-Haïtien and other cities.
The development bank remains one of the largest sources of funding for Haiti, but the money could begin to dry up as protesters take to the streets and call for President Jovenel Moïses to resign.
Demonstrators have demanded an investigation into what the Moïses administration has done with billions of dollars in funding from Venezuela. They have also called for an end to austerity measures and price increases.
A drop in tourism revenues, compounded by the cancellation of Carnival celebrations this year, could undo any expected economic growth this year, said the US Embassy in Haiti.
David Jessop, a consultant at the Caribbean Council, said the outlook looks grim for for financing and foreign direct investment (FDI) in Haiti, moving the country further away from becoming investment grade.
“They will have to show two to three years of stability and statistics that indicate reliable economic growth, but the problem is it’s very difficult to know what’s really going on in Haiti,” Jessop said.
“It would be very dubious for anyone to want to take on a Haitian bond,” he said.
© 2019 Latin American Financial Publications, Inc.