Assessing plans for Haiti’s reconstruction

For those who have followed the history of Haiti since the departure of Jean-Claude Duvalier in 1986, it is clear that the international community led by the US has not had the interests of the Haitian majority at heart. Haiti–it must be remembered–is a country where 1% of the population controls more than half the national wealth. The US and its allies have often found it worthwhile to not only preserve this social order but also to aggravate it further. The earthquake which recently destroyed and emptied out Port-au-Prince was a bitter reversal to the trend of rural dwellers moving to its teaming slums. Ever since the advent of neo-liberalism in the country, Haiti’s agricultural sector has been undermined by cheap–often heavily subsidized–imports from the US and the rest of the world. This had the effect of pushing many farmers off their lands by running them out of business and increasing price volatility for basic food items. The quintessential example of this is the case of Haitian rice (mirror). Trade liberalization schemes promoted by organizations such as the International Monetary Fund (IMF) lowered the tariff on rice imports to 3% in the mid-1990s. Heavily subsidized “Miami rice” from the US flooded the food market and and dramatically reduced the price of rice to levels at which domestic farmers could not compete. This accelerated the ongoing process of “de-peasantization” in which rural populations migrated to urban areas such as Port-au-Prince in search of a source of income. Once settled in the poorly maintained and densely populated slums they were often rendered dependent on sweatshops for income. This past March, former US president Bill Clinton offered a long overdue apology for forcing low tariffs on Haiti’s underdeveloped agricultural sector:

“It may have been good for some of my farmers in Arkansas, but it has not worked. It was a mistake […] I had to live everyday with the consequences of the loss of capacity to produce a rice crop in Haiti to feed those people because of what I did; nobody else.”

There are other indications that the US and the international community are aware of the negative press their economic recommendations for Haiti have caused. However, it remains to be seen whether this will result in a fundamental move away from orthodox neo-liberalism or a mere repackaging of the same old formulas. On March 16, a financial services subcommittee in the House of Representatives held a hearing entitled “Rebuilding Haiti’s competitiveness and private sector” (large PDF). There were numerous acknowledgments made about legitimate concerns on the US role in Haiti. Congressman Gregory W. Meeks (D-NY) congratulated Congress for passing bill to relieve Haiti’s foreign debt and expressed a desire that long term reconstruction provide “hope and opportunity for all [of Haiti’s] population and not just the privileged elite.” Despite this, there was absolutely no suggestion that the US’ policies towards Haiti in the past have been less than benevolent and very little reference to the staggering disparity in wealth and income present in the country. Numerous mentions were made of corruption on the part of the Haitian government with little sense of context or self-examination. Flaws on the part of US aid organizations were mentioned mostly in passing. It did not appear that the participants were aware that USAID itself once bragged that “84 cents of every dollar of its funding in Haiti goes back to the US in the form of salaries, supplies, consultant fees, and services.” There was much talk of micro-financing and re-energizing Haiti’s private sector, but very little acknowledgment that a country where such a small number of families owns most of the means of production, trade and credit such measures will only enjoy small-scale token achievements.

The official plan for reconstruction was released this past March. The plan, much like the hearing referenced earlier, occasionally gives voice to the concerns of critics of the international community’s treatment of Haiti. For example, it briefly mentions the saturation of NGOs and contrasts their deep influence with the weakness of the national and local governments. However,  one can’t help but get a feeling of deja vue from the continued emphasis on private investment. On a bullet point describing the 18 month “implementation” period after the quake (p. 9) it states the need for (emphasis mine):

Projects to kick-start the future of Haiti and establish a framework of incentives and supervision for private investment on which Haiti ‘s economic growth will be founded. As foreseen by various analyses and assessments, private investment in the economy as well as in the social sector will form the backbone of the country’s reconstruction. Among the commitments of donors, support will be given to the private sector to provide it with the capacity required to fulfil this role.

It mentions some genuinely laudable goals such as increasing access to electricity, health care, water and sanitation but doesn’t not specify precisely how this will be done. There is mention of “public-private partnerships” for certain public works projects such as the rebuilding of ports, which is worrisome considering that the biggest private interests in Haiti are not known for their concern for public well-being or willingness to engage in honest competition.

On page 44 there is talk of “decentralization” of government duties by giving more authority and responsibilities to the municipal governments. One of the bullet points states that:

Initially the local governments will remain dependent on grants from the State, but they will have to develop their own resources through a locally adapted taxation system. By the year 2020, State grants should not be more than 50 percent of the functional revenue of the municipalities that are development centres and by the year 2025 for other municipalities.

This strategy seems incredibly premature considering the fact that the economic powers of the national government were never too strong too begin with. Decentralization could in practice enable even more inequality by allowing the richer municipalities to deprive the poorer regions of much needed tax revenues.

The section on fiscal and budgetary policy (p. 49) gives lip-service to “increasing tax revenues by improving the fairness of the taxation system and fighting tax evasion,” certainly a worthy goal in a poor country with a decadent ruling class. One of ex-president Jean-Bertrand Aristide’s greatest achievements (before getting overthrown, of course) was the increase in tax revenue from the notoriously evasive upper-class. However, the rest of the document de-emphasizes tax policy and only notes that direct budgetary aid will be necessary to offset the loss of revenue collection capabilities. This probably means that Haiti will be rendered even more dependent on foreign governments to fund its own budget and thus more easily cowed by foreign interests.

Overall, the plan for reconstruction relies on a private sector that is notoriously in-egalitarian and exploitative and is run by small clique of rent-seekers. It is not clear how increased attention to micro-loans to small- and medium-sized businesses  will help the situation if the oligarchy’s numerous monopolistic and oligopolistic entities are not subordinated to the public good. Sad as it sounds, it seems that this plan is mostly window dressing to cover for the continued dominance of Haiti by domestic elites and foreign powers.

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