IMF chief: Haiti needs 'Marshall Plan'

Speaking in Hong Kong on Wednesday Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), said that a plan similar to the one the U.S. implemented to rebuild post-World War II Europe is needed for the reconstruction of Haiti.

Named after then U.S. Secretary of State George C. Marshall, the Marshall Plan was introduced in the late 1940s by the administration of President Harry S Truman, lasted four years, and saw $13 billion utilized in the rebuilding of a continent suffering the effects of six years of war. And now Mr Strauss-Kahn has stated his belief that the same type of plan will be required to rebuild Haiti in the wake of the devastating earthquake on January 12. The IMF's own website quotes him as saying:

My belief is that Haiti— which has been incredibly hit by different things—the food and fuel prices crisis, then the hurricane, then the earthquake—needs something that is big. Not only a piecemeal approach, but something which is much bigger to deal with the reconstruction of the country: some kind of a Marshall Plan that we need now to implement for Haiti

Mr Strauss-Kahn also went on to explain that the interest-free loan of $100 million Haiti will receive from the IMF, to help it cope in the immediate aftermath of the earthquake, could not take the form of a grant. He said that there is no mechanism in place to make a grant in such a short period of time, adding:

And so, the question was: were we going to do nothing—or give a loan? We decided to give a loan—but a zero-interest loan, with a long grace period

However the IMF's Managing Director did stress that if an agreement could be reached within the international community to cancel all of Haiti's debts the IMF loan would be included in any such agreement, effectively making it a grant. Along with other, unnamed, financial organizations the IMF provided $1.2 billion in debt relief to Haiti last June and according to AFP that is the amount the United Nations calculates has to date been pledged to Haiti in aid funding. According to the Earth Times the United Nations has estimated too that $550 million will be necessary to cover the costs of meeting the short-term needs of the people of Haiti. One problem highlighted by another official at the IMF, Nicolas Eyzaguirre, Director of the Western Hemisphere Department, is that most of Haiti's productive capacity was in and around its capital Port-au-Prince and was therefore destroyed by the 7.0 magnitude earthquake. Mr Eyzaguirre observed:

We need to urgently help Haiti to get its economy functioning again. All state and government institutions were badly damaged. Banks were destroyed and the payments system shut down. The Fund, in close coordination with other donors, is assisting the authorities in getting cash to circulate in the economy so people can buy food, and civil servants can receive their salaries. Banks will reopen shortly but the payments system is not fully operational yet

Denis O'Brien, Chairman of Digicel, a Jamaican-based mobile telecommunications company operating in the Caribbean and Central America and said by AFP to be Haiti's biggest foreign investor, has supported the idea of a plan like the one that helped Europe recover from World War II. Mr O'Brien, who has indicated that he is working with former U.S. President Bill Clinton on a plan of that nature, commented:

Obviously we need foreign direct investment but on a wider front we need a Marshall Plan

Figures are it seems constantly being revised but the IMF says Haitian officials are talking in terms of 200,000 people killed, 250,000 injured and 1.5 million made homeless as a result of last week's earthquake.