From Sat Jul 27 10:30:15 2002
Date: Fri, 26 Jul 2002 00:59:18 -0500 (CDT)
From: Haiti_Progr├Ęs <>
Subject: This Week in Haiti 20:19 7/24/2002
Article: 142845
To: undisclosed-recipients:;

Cooperative crisis continues to escalate in Haiti

Haiti Progres, This Week in Haiti, Vol.20 no.19, 24—30 July 2002

Last year, dozens of cooperatives mushroomed all over Haiti as part of a cooperative movement encouraged by President Jean-Bertrand Aristide. In theory, the movement was supposed to democratize the economy by offering alternatives to the Haitian bourgeoisie’s monopoly control of key economic sectors, like banks and import/export companies. Most of the cooperatives spawned were unregulated banks and credit unions offering mind-boggling interest-rates of up to 15%, enticing inflation-whipped Haitians to deposit their meager life savings into accounts that seemed too good to be true.

They were. This year, the cooperatives, most of which appear to have been concocted by pyramid schemers, have begun to fall like dominos, throwing thousands of Haitian depositors into even deeper poverty and despair. Many of the cooperative directors have gone into hiding or fled to the US.

Meanwhile, an angry movement of fleeced depositors has emerged in Haiti. They are demanding why the government made no effort to warn the public, to apprehend fugitive directors, or to monitor the cooperatives despite the existence of a regulatory agency, the National Council of Cooperatives (CNC). In an effort to calm spirits, Aristide has promised to refund the millions of dollars which evaporated from cooperative accounts, although the Haitian treasury is penniless. He has pledged to do this by September, when families need money for the start of the school year.

On Jul. 18, demonstrators took to the streets of St. Marc to demand that the government act to arrest the directors of collapsed cooperatives and to prevent their flight from the country. There is only one thing we can do if the government refuses to take hold of this matter, said one angry demonstrator. Next week, we will shut down all of St. Marc, from top to bottom. Many cooperatives in that town have closed their doors, including BCI, BCCH, CADEC, SOFADEC, BEFEC, and CODESO.

In Gonaoves, similar demonstrations took place last week to demand that Aristide reimburse depositors as promised. Aristide has to give us our money immediately, one demonstrator said. We won’t wait until September. We are going to block all the roads this month.

Every day in Port-au-Prince, crowds form in front of the CNC offices where people file claims against cooperative directors to recoup their losses. I have been standing here since this morning, said one forlorn man waiting on line. I’m just trying to survive this life they’ve destroyed. Since I’ve been standing on line, a bunch of people have gone ahead of me. If you are not a policeman, you don’t get anywhere. Some cops have taken to reclaiming their money at gunpoint from folding cooperatives.

Meanwhile, Justice Minister Jean-Baptiste Brown and Finance Minister Faubert Gustave held a Jul. 19 press conference with the heads of the Cooperative Initiative (INICOOP), an association of cooperatives formed in an effort to save the movement. They announced an agreement with the directors of failed cooperatives, but only those who had not fled or gone into hiding. They encouraged people to continue to file claims against fugitive directors and to be patient. So far over 9000 claims for money lost in failed cooperatives have been lodged. Claims can be filed at the CNC offices, at the courthouse, or even at the Ministry of Justice, the officials said. The Ministers said they had taken various measures to protect the assets of the cooperatives, and they invited fugitive cooperative directors to return and make an arrangement with the government.

The INICOOP directors said that they had made a deal with the government and foreign firms to buy up the assets of failed cooperatives. INICOOP estimates that the Haitian state will have to reimburse about $240 million to swindled depositors, which is more than 60% of the national budget.

We don’t think that the state, that is the Haitian people, should have to foot the bill, said Ben Dupuy of the National Popular Party (PPN) in a Jul. 9 press conference. Those who are responsible, those who stole the money, should pay the depositors back. The state should pursue them. The state doesn’t even have the funds. People are dying in the General Hospital because there is not enough serum or medicine. All the roads in the country are disastrous; they can’t even afford to fill the holes. And now the government says it is going to compensate people right and left. It’s pure demagogy.