Economy reels under World Bank program

In Haiti Progres, This Week in Haiti,
Vol. 14, nol 17, 17-23 July 1996

Haiti's trade balance continued to worsen in the first part of this year, another key indication that the much vaunted World Bank and Lavalas government economic recovery program has been an unmitigated disaster. According to the latest figures from the U.S. Commerce Department, exports from Haiti to the United States are running below 1995's already anemic levels. In fact, last year's exports were so bad that they did not even surpass levels set during the international embargo against the coup regime.

Haiti shipped only about $37.2 million worth of goods to the United States in the first four months of this year. In 1995, Haiti exported a total of $130 million to their northern neighbor. The new figures are important not only because the United States is Haiti's largest trading partner, but also because exports are the self-proclaimed centerpiece of the Lavalas government and the international financial institutions (IFIs) 22-month long emergency economic recovery program. According to the logic of the IFIs export-led development, exports should be sharply up by now. But they are even lower today than they were during the international embargo against the coup regime of Lt. Gen. Raoul Cedras. In 1993, for instance, when the Organization of American States (OAS)-led hemispheric embargo was in full swing, Haiti exported $155 million worth of goods to the United States. In the last normal period of economic activity in 1990, Haiti exported about $300 million a year.

Meanwhile, imports from the United States are running at record levels. Fueled by loans from the World Bank and other IFIs, Haiti imported $551 million in 1995, sharply up from $477 million in 1990. For the first four months of this year, Haiti imported $160.7 million from the United States, mostly food, cars and apparel goods destined for the low-wage assembly zones of Port-au-Prince. So again, Haiti is on pace to hit a near record balance of trade deficit of around $400 million a year.

The trade deficit is important because it drains foreign exchange (US dollars) generated from international phone calls and money sent home from the diaspora. Instead of those funds being used to better the lives of the Haitian people, they are used to grease the wheels of the international financial system and, ultimately, destroy what's left of the Haitian economy. For instance, the biggest import from the United States is rice, ironically one of Haiti's main products. But because the World Bank and the Lavalas government have reduced rice tariffs in the spirit of free markets, cheap Miami rice floods into Haiti. The cheaper rice now dumped -- at vast profits to U.S. corporations -- wrecks Haitian farmers, creating more poverty. There is now a demand for 300,000 metric tonnes of rice a year, Camille Chalmers of the Haitian Platform for an Alternative Development told Inter Press Service (IPS) recently. Out of this, one-third is produced in Haiti and two-thirds is imported from the States, Chalmers said, noting that in 1985 Haiti imported only 7,000 metric tonnes.

It's not just that Haiti has to pay to import goods that are destroying its own economy, but also that Haiti has to pay twice, so to speak, for the executioners bullet. To finance the imports, the World Bank and the Inter-American Development Bank (IDB) among others, loan Haiti the dollars to buy the goods from U.S. corporations. As a result, the artificially induced import boom is ballooning Haiti's debt to unmanageable proportions. In fact, Haiti's debt will probably rise above one billion dollars this year, up from $830 million two years ago. In four or five years, I don't think Haiti will be able to service its debt anymore, Chalmers argued. Indeed, of the famous development aid that the U.N. and the U.S. have trumpeted, very little has actually hit the ground. Out of the some $500 million loaned or given to Haiti between October 1994 and October 1995, Chalmers said that only two percent was used to strengthen the agricultural sector and less than two percent went to education. It was the first time Haiti received that much assistance, but it was not used for the priority needs of Haiti but for such things as balance of payments and foreign debt service, Chalmers said.

Aside from increasing Haiti's debt, another major problem with the huge trade deficit is that the value of the gourde tends to depreciate, thus making all goods more expensive. Food prices, including basic foods like beans, flour, rice and sugar, have skyrocketed in the last two years. In line with World Bank orthodoxy, the gourde has been allowed to freely fluctuate, driving down the value of the gourde, and Haitian labor costs. As is usually the case with the World Bank, the poor suffer and the rich get richer.

The continued economic deterioration of the country comes directly from the World Bank and International Monetary Fund (IMF) Structural Adjustment Program (SAP) now being applied in Haiti. The IFIs have long demanded that Haiti make the necessary sacrifices and remove distortions in the economy in order to attract foreign investment and develop a boom in exports. These sacrifices include higher prices for food and transportation, eliminating tariffs, sacking state workers, and privatizing nine state-run companies. The IFIs and the Lavalas government have argued that such a liberalized and free market economy would be a major step in bringing Haitians out of poverty. Besides, the IFIs have conditioned hundreds of millions of dollars in loans on these structural adjustment reforms.

The latest trade figures again confirm that the World Bank and Lavalas government promise is a lie. The administration of President Rene Preval and the IFIs are wrecking the Haitian economy, even by their own standards. Growth was only 2.5 percent last year, a dismal showing given a 30 percent decline the previous three years and the economic ''jump-start'' from presence of more than 7,000 U.N. soldiers and about $500 million in international financial support. As a result of the poor economic performance, the health and welfare of Haitians is not improving. Pre-school child malnutrition and morbidity, for example, have not declined significantly over the last year. Fifty percent of Haitian children surveyed in May 1995 were considered to be at a ''normal'' nutritional status, compared to 49 percent in May 1993, according to U.S. AID figures. Indeed, both malnutrition and morbidity indices remain above pre-coup levels.

The most recent trade figures are just one example of the failure of the World Bank, IMF and Lavalas government economic program. But it's important to remember that this Haitian failure, like in other countries, has in fact benefitted the local bourgeoisie. As U.N. officials regularly note, the Haitian bourgeoisie has never had it so good. And in Washington, the U.S. military intervention in Haiti remains a success story. Indeed, failure is a relative term, a word to be used only if it is assumed that the World Bank and the U.S. military actually wanted to help the people of Haiti. Instead, what the World Bank and the IMF are trying to do in Haiti is what they've tried to do elsewhere on the planet: expropriated farmers from their land, integrated and cheapen Haitian labor on the international market, reverse expectations of a better life, and open the country to fuller exploitation.