Haiti – Same Old New Beginning

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It’s an old cliche that the Chinese character for crisis is the same as opportunity. In Haiti however, business and political leaders are not concerned with originality. The catastrophic earthquake was quick to be seen as an opportunity to rebuild the Western hemisphere’s poorest country, with the US thinktank the Heritage Foundation famously writing that “the U.S. response to the tragic earthquake in Haiti offers opportunities to re-shape Haiti’s long-dysfunctional government and economy.” While the overt opportunism of this article led to it being quickly removed from the website, its honesty reveals a mode of thinking that is very much apparent among political elites, business leaders and some non-governmental organisations.

Soon after the earthquake, Digicel chairman and majority shareholder Denis O’Brien, urged investors and policy-makers at the Davos Economic Summit to invest massively in Haiti, joining IMF managing Director Dominique Strauss-Kahn in calling for a new Marshall Plan for the poverty-stricken country. Special envoy Bill Clinton has been no less ambitious in his plans for the Caribbean nation. He is co-chairing the recently established Interim Haiti Reconstruction Commission with Haitian Prime Minister Jean-Max Bellerive, a body that will oversee the reconstruction efforts.  This group will have the power to seek, approve and coordinate projects. There are fears from Haitian grassroots organisations that the Commission will become a de facto government as, despite rhetoric from Washington on working with the Haitian government, its board is dominated by non-Haitians. In the same vote accepting the Commission, the parliament ratified the further extension of a state of emergency, while elections which were scheduled for February are likely to be held late in this year or early in the next to avoid, in Preval’s words, leaving “a political vacuum”.

New elections may not be sufficient to build legitimacy for either reconstruction or government authority, however. Fanmi Lavalas, once the country’s most popular political party and retaining a strong grassroots following among the poor, has been excluded from participation since its leader Jean-Bertrand Aristide, Haiti’s first democratically-elected president, was deposed in a 2004 coup. The coup, backed by the combined strength of the US, France and Canada, is the source of the current UN occupation, MINUSTAH, and the human rights abuses of neither paramilitary coup nor UN forces have led to adequate judicial process. In one particularly notorious example, Raoul Cedras, a former Haitian army officer who led a 1994 coup against Aristide, was given a one million dollar payout by the United States in return for voluntary exile in Panama. Although convicted in absentia, he has not faced any consequences for the brutal military junta he led, which was responsible for thousands of extrajudicial killings, systematic rape, intimidation and torture.

The Interim Reconstruction Commission follows the line of a suggestion from Paul Collier, the Oxford University economist, whose February report was supported by Bill Clinton. Another key recommendation from Collier that has seen inclusion in the Action Plan for National Recovery and Development is the intention to capitalise on Haiti’s comparative advantages to build export-led growth. The primary ‘comparative advantage’ is Haiti’s supply of cheap labour. Capitalising on this means the expansion of the garment and assembly factories in export zones in Port-au-Prince and Gonaives. Again, this is not original.

The Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) Acts of 2006 and 2008 established tariff-free trade between Haiti and the United States. This has been touted, pre- and post-quake, as a continued basis for economic recovery as it grants Haitian manufacturers easy access to the US consumer market. Generally, however, these are US corporations, such as Levi’s and Disney, which subcontract out to Haitian factory owners. The profits primarily go back to the United States, while the corporations are able to claim ignorance about the conditions in their factories. It’s the same old sweatshop practices.

The HOPE acts are themselves to be born again, with bipartisan legislation in the US Congress aiming to extend their terms until 2020. But free-trade cuts both ways. The HOPE Acts also severely restrict the ability of the Haitian government to restrict or control US imports via tariffs, taxation or price control. This is crucial for the continued existence of the apparel sector as a ‘maquiladora’, or assembly industry, where the raw materials (fabric) are sourced in the US, brought into Haiti, manufactured into finished items, and then returned to America for sale.
It’s also a notable limitation considering the massive outflows of cheap rice from subsidised US farmers that continue to undercut Haitian farmers. The much touted ‘comparative advantage’ of cheap labour is not naturally occurring; this ‘dumping’ of subsidised American imports enabled grain dealers to capture the market, devastate local production and eventually drive the cost up. The food riots of 2008, which resulted in scores of people being shot and killed by UN peacekeepers, were a direct result of the vulnerability of Haiti to shifts in the global food market. Migration from rural areas, the overcrowding of urban centres and the pauperisation of the population; the devastation caused by the earthquake can be seen as direct result of decades of US-led policies that have decimated the country’s agricultural production. And while Bill Clinton expressed regret for his part in the damage done by these policies at the Senate Foreign Relations Committee last March, there is little sign of any policy rethink; 0.3% of aid requested in the Post-Disaster Needs Assessment was earmarked for agriculture and fishing.

Pre-quake, there were 25,000 Haitians employed in the garment industry, a quarter of what were employed a decade ago. Despite US keenness for increasing apparel production, this decline was due to the US blockade of the country after shaky claims that the election of Aristide was due to intimidation and voter fraud. Now, with rising fuel costs driving Chinese export prices upwards, returning Haitian garment production to the pre-embargo peak, as outlined in the Recovery Plan, will secure continued access to cheap garment production for major North American corporations.

Of the entire production process, the only returns to Haiti are the wages of the labourers and the profits of the owners. The labourers are paid what labour organisations term ‘starvation wages’, with most earning around three or four dollars a day, with promised bonuses for meeting quotas rarely attainable. Conditions are poor and there are many complaints of sexual abuse from a mainly female workforce. Outside the factory gates are lines of unemployed, waiting to take the places of the dismissed. In a country with some nominal labour rights, but no government interest in the issue, employers are free to dismiss rebellious workers at will. Demonstrations, strikes and an act of Parliament called for a raise in the national minimum wage, but President Rene Preval imposed an exception on the garment industry. The comparative advantage prevails.

The talk of a new start for Haiti, then, must be taken with caution. The National Recovery Plan was agreed at the donor conference held last March in Montreal. There, Venezuela, the first nation to unilaterally cancel Haiti’s considerable petrodollar debt, and Cuba, the country that has supplied more medical aid for a longer period than any other country, were both excluded, while Haitian civil society organisations condemned the lip-service paid to consultation with their representatives. So, just as the National Recovery Plan is Hope Mark III (HOPE was itself an earlier act, PRET the Program for Recovery of the Economy in Transition, part deux), the donor conference seems like Ottawa 2003 redux. There, countries such as the United States, Canada, France and US Latin American allies met to decide Haiti’s future, without inviting a single Haitian government representative. The conference was followed, a year later, by the second coup against Aristide, ending with the elected president being escorted by US Marines to Central African Republic. Currently based in South Africa, Aristide has yet to be allowed to return to his native country.

As in that case, participation is political. The reconstruction effort is moving along tried and trusted lines. Haiti is to be a garment-factory nation, Haiti is to be dependent on food imports, Haiti is to be managed by non-Haitians. Haiti’s crisis, we see, is an opportunity – A new opportunity to begin building from old blueprints.

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