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Funds to Rebuild Haiti – EU, US, and ALBA

April 1, 2010

al-Jazeera English reports:

 International donors have pledged $9.9bn to rebuild earthquake-devastated Haiti, going “far beyond expectations”, the UN secretary general said.

Bank Ki-moon said at the end of a day-long donor conference at UN headquarters in New York City on Wednesday, that the international community had come together “dramatically and in solidarity with the Haitian people” to help them recover from the January 12 earthquake.

The EU, promising $1.6bn, and the US with $1.15bn, led 50 countries in pledging $5.3bn for the first two years of reconstruction.

That was substantially more than the $3.8bn the Haitian government had sought for that period.

But the remaining $4.6bn pledged for beyond the two-year mark – bringing the total amount to $9.9bn – fell short of the $11.5bn total package that Haiti’s government had wanted to rebuild what was destroyed by the quake but also to decentralise the economy to create jobs and wealth outside Port-au-Prince.

What the al-Jazeera article failed to mention, and what one would be hard pressed to find in other western media, is the $2.42 billion pledge made by the Venezuelan led ALBA trade-bloc.

James Suggett reports:

The Venezuela-led trade bloc, ALBA, pledged $2.42 billion in reconstruction aid to earthquake-torn Haiti between the years 2010-2016 during a United Nations conference on Wednesday. Also, Venezuela called for Haiti’s foreign debt to be forgiven and advocated direct aid and services, not loans, for the Caribbean country.

“We are at the United Nations to re-affirm the commitment of the government of President Hugo Chavez Frias with coordinated and impactful action in Haiti,” said Venezuelan Vice Minister of Foreign Relations Francisco Arias Cardenas, representing the eight-member ALBA bloc.

ALBA stands for Bolivarian Alliance for the Americas and was formed as a solidarity-based alternative to profit-driven free trade pacts. Its members include Venezuela, Ecuador, Nicaragua, Bolivia, Cuba, Dominica, St. Vincent and the Grenadines, and Antigua and Barbuda.

The vice minister said half the money would be given as direct aid to Haiti, while the other half would be rendered in services to Haiti’s devastated housing, infrastructure, waste management, energy, education, health care, and agricultural systems. The majority of the money will come from Venezuela, he said, along with smaller contributions from the other seven members.

Much of Venezuela’s contribution will be financed through the Petrocaribe trade group, in which Venezuela exchanges discounted oil for goods and services from Caribbean and Central American countries. Venezuela will reinvest the proceeds from the oil it sells to Haiti into reconstruction projects in Haiti.

Cuba will manage the ALBA’s contributions to Haiti’s health care system, which include the construction of more than 100 public health clinics that will provide primary care, emergency room, midwifery, vaccinations, physical therapy and rehabilitation, public health education, and other services, according to announcements on Wednesday by Cuban Foreign Minister Bruno Rodriguez.

Venezuela has already sent hundreds of thousands of tons of food, 225,000 barrels of fuel, thousands of tents, water purification systems, and heavy equipment to remove rubble in Haiti. It has also donated $37.2 million in aid to Haiti as part of a pledge by the twelve-member Union of South American Nations. Since 2007, Cuba, Venezuela, and Haiti have built houses, free health clinics, and electricity generators in Haiti through a tripartite commission.

During the U.N. conference, Arias Cardenas also advocated full debt relief for Haiti. He pointed out that Venezuela already forgave Haiti’s $295 million in debt following the earthquake, urged richer nations to “consider the quality and the proportion of the donation in relation to the size of the economy of the donating country.”

Furthermore, the ALBA bloc denounced the influence of the World Bank, the Inter-American Development Bank, and International Monetary Fund (IMF) over the U.N.’s Haiti reconstruction fund, arguing that the policies of these entities contributed to Haiti’s economic devastation in the 1990s.

“We do not think that in these moments we should give priority to recuperating the profits of private companies, nor that those who come to speak and direct things should be the World Bank and the IMF,” said Arias Cardenas. These entities “should come and say, ‘We forgive all of Haiti’s debt’, but instead, they come to say that there will be more funds so that [Haiti] may become more in debt.”

 Considering the that the EU and US have economies and finacial capabilites many times greater than the relatively small and poor ALBA nations, the combined $2.75 billion pledged by the former and the $2.42 billion by the latter says a lot about their differences and priorities. 

The approach favored by the US has involved the sending of over 11,000 US troops to the small island nation, involving costly logistics and coordination that could have easlily been better spent on aid and rebuilding.  Venezuela in contrast sent 90 military personal along with 500 or so reflief workers, medics, and rescue workers.

The US has also favored a private reconstuction contracts in the rebuilding effort, while Venezuela has been urging complete debt relief and ensuring the funds are given to Haiti instead of new loans which would only restart the cycle of indebtedness.  To facilitate this, Venezuela it “to funnel its aid efforts directly through the Haitian government, rather than through the U.N.’s “cluster” system” .

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