IDB Group President Ilan Goldfajn said the development bank is ready to help the most vulnerable countries in the region as they grapple with the fallout from rising oil prices—and Haiti is first in line.
The Inter-American Development Bank, the IDB Group’s public-sector lending arm, approved a two-year concessional program for $283 million last November to aid the crisis-riven country, the hemisphere’s poorest, and there may be more to come.
“Haiti clearly is under our concessional window. [We are] actually giving them non-reimbursable [funds],” Goldfajn told reporters Thursday at a news conference. “We have been doing it with hospitals there, feeding programs in school to keep the kids and the youth away from the gangs.”
The Washington, DC-based bank is also considering investing $65 million to build an airport in the south of the Caribbean country. And the group’s IDB Lab and IDB Invest arms have earmarked $40 million in loans to the private sector.
“The IDB is already scaling up its support to Haiti in response to the country’s urgent needs,” the lender said in a statement to LatinFinance. “Our focus is to keep working closely with the authorities and other MDBs to adapt and strengthen that support in line with priorities on the ground and the medium-term recovery plan.”
ARMED VIOLENCE
Haiti is mired in a crisis unlike any other in the hemisphere. Armed gangs control large swathes of its territory and elections haven’t been held for a decade. Spreading gang violence is disrupting livelihoods, the distribution of humanitarian aid, and the government’s response to hurricanes, floods and droughts, the United Nations said in January.
The US terminated most of its aid to Haiti following cuts ordered by the Trump administration.
Sky-rocketing oil prices are especially “bad news” for Haiti as the government had been expecting to benefit from some tax-related revenues after oil subsidies were removed in 2022, said Kesner Pharel a Port-au-Prince based management consultant.
“This is like a bombshell,” he said. “The oil shock may deal a double blow to the economy: a trade/fiscal deficit and lead to stagflation, including an eighth consecutive year of recession.”
ECONOMIC ‘TRANSFORMATIONS’
Bolivia, which was facing a major economic collapse before the newly elected government of Rodrigo Paz began implementing reforms last year, is another example of a vulnerable country benefiting from IDB funding, said Goldfajn.
“One of the priorities is to provide support to countries that are willing to have economic transformations,” he said.
IDB signed a $4.5 billion financing package with the Andean country in January, including a $500 million for social protection purposes.
“We’re very aligned and we give them quite a lot of support,” Goldfajn said.