Three of the largest multilateral lenders cancelled US$1.2 billion of Haiti's debt, freeing up millions of much-needed cash for the Western Hemisphere's poorest nation.
"We are cautiously optimistic," Corinne Delechat, IMF mission chief for Haiti, told reporters. "It is a turning point for Haiti, and it is up to the government to use the opportunity well."
According to debt relief advocates at the Jubilee USA Network, Haiti – where 80 percent of the population live in poverty – was scheduled to send more than $20 million to the World Bank in 2009.
A significant portion of the debt forgiven was lent to the brutal Duvalier dictatorships.
"Today's action to free Haiti of its unjust and unpayable external debt is a welcome and long overdue step," said Jubilee USA Network Executive Director Neil Watkins. "Debt cancellation will provide desperately needed relief for the people of Haiti."
Haiti was selected for the World Bank and IMF's debt cancellation program for heavily indebted poor countries in 2006. IDB approved debt relief for the Caribbean nation, pending its completion of that program.
Freeing Haiti of much of its debts will allow the government to increase spending on anti-poverty programs, rebuild from last year's devastating hurricanes and counter the effects of the global economic downturn.