The head of the World Council of Churches has commended the G7 after it pledged to cancel the debt owed to them by earthquake ravaged Haiti.

In a letter sent to G7 finance ministers, the Rev Dr Olav Fykse Tveit urged the International Monetary Fund and other financial institutions to follow suit in cancelling unconditionally Haiti’s remaining debt after the already impoverished Caribbean nation was crippled by the 7.0 magnitude earthquake that struck on January 12.

Dr Tveit said financial support for Haiti should be “grant-based and not debt-creating”, saying that more loans from the IMF would only add to Haiti’s existing “burden”.

He expressed regret that the IMF had not shown “clear willingness” or made any “definitive moves” to cancel the country’s debt.

An initial show of enthusiasm from IMF chief Dominique Strauss-Kahn, who indicated on January 20 that the loan to Haiti of $100 million could become a grant, has not been matched by other IMF officials. IMF mission chief for Haiti Corinne Deléchat said a week later that the cancellation of Haiti’s debt would depend on a disaster needs assessment being carried out this month and admitted her belief that debt relief would achieve “little” in comparison to the scale of the needs.

Dr Tveit called for the “immediate and full cancellation” of Haiti’s international debt, saying, “The quake-stricken country needs a broader plan to support recovery, poverty eradication and sustainable development.”

WCC partner Action by Churches Together International has provided relief and development support to communities in the aftermath of the quake, which killed more than 200,000 people and left another 1.5 million homeless.

The G7’s decision was also welcomed by Christian Aid, which last week handed in a petition to the Treasury signed by more than 15,000 people urging Chancellor Alistair Darling to help bring about the cancellation of Haiti’s international debt.

Christian Aid’s senior economic justice adviser Dr David McNair said: “G7 ministers' backing of the growing campaign for cancellation of Haiti's debt is very welcome. Now we need the IMF and the Inter-American Development Bank urgently to deliver what Haiti desperately needs, as it struggles to recover from the nightmarish effects of the earthquake.

“So far, the IMF's only action has been to lend Haiti yet more money. That new debt, and the country's existing debts, should immediately be forgiven and any further transfers should be in the form of grants, not loans.”