Haiti needs Freedom from Debt NOW

6 May 2005 by Beverly Keene

Occupied militarily for more than a year now by a UN sanctioned “stabilization” mission, classified by the UN as a country in “rapid economic regression” with a “cuasi-failed state”, with some 80% unemployment and similar levels of illiteracy, water and electricity rationed to a few hours a day in the best of circumstances, more than half of the population living on less than one dollar a day, and a mere 2% of the country’s forest cover remaining, Haiti is today a chronicle of death foretold.

In the midst of that reality however, important sectors of the Haitian people nonetheless continue their historic and immensely dignified resistance to the fate that others would have them accept in resignation. It is with them that we are called to act in solidarity, working together to develop new forms of international cooperation respectful of their rights and needs and able to turn the tide of plunder, exclusion, violence, and subyugation now resulting from the complex clashing of multiple interests both internal and external.

The economic embargo imposed by the international community in the aftermath of the 1991 coup against the first democratically elected government in Haiti’s nearly two hundred years of independence prompted the collapse of an already precarious economy, widespread social dislocation, and an intensification of the process of environmental devastation that has at its center the continued concentration and plunder of available resources and the impoverishment of the vast majority of the population.

The structural adjustment Structural Adjustment Economic policies imposed by the IMF in exchange of new loans or the rescheduling of old loans.

Structural Adjustments policies were enforced in the early 1980 to qualify countries for new loans or for debt rescheduling by the IMF and the World Bank. The requested kind of adjustment aims at ensuring that the country can again service its external debt. Structural adjustment usually combines the following elements : devaluation of the national currency (in order to bring down the prices of exported goods and attract strong currencies), rise in interest rates (in order to attract international capital), reduction of public expenditure (’streamlining’ of public services staff, reduction of budgets devoted to education and the health sector, etc.), massive privatisations, reduction of public subsidies to some companies or products, freezing of salaries (to avoid inflation as a consequence of deflation). These SAPs have not only substantially contributed to higher and higher levels of indebtedness in the affected countries ; they have simultaneously led to higher prices (because of a high VAT rate and of the free market prices) and to a dramatic fall in the income of local populations (as a consequence of rising unemployment and of the dismantling of public services, among other factors).

IMF : http://www.worldbank.org/
and trade liberalization measures, sent back with Aristide when he returned from Washington in 1994, further deepened the process of decline, wiping out sugar-cane, fruit, and rice production and converting Haiti into a food importer. State employment was halved over the succeeding decade, directly affecting thousands of families and seriously crippling any real prospect of institutional response not only on healthcare, education, land reform, or other pressing human rights issues but also matters of security and the administration of justice. With the turn of the millennium, charges of massive electoral fraud, and an increasingly polarized socio-political situation, cooperation was again largely suspended and the Haitian government took the only possible step of stopping payment on outstanding loans to the World Bank World Bank
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

and the IDB, among others.

In March, 2004, less than a month after the US military intervened illegally to escort a seriously discredited Aristide out of the country, and France, Canada, and Chile followed suit with the arrival of their own troops -in a matter of hours in some cases-, the same World Bank, IDB, and other so-called donors, announced their plans to reorganize the country and set in motion a whirl-wind team of predominantly international specialists to devise an “Interim Cooperation Framework”. Official pledges of funding have by and large thus far failed to materialize and what resources are entering the country are primarily earmarked for supporting the military occupation itself, organizing elections, or preparing conditions for the further privatization and denationalization of the economy and the country’s transformation into a massive free-zone wherein workers are returned to the status of slaves.

Nonetheless, in early January, 2005, the Interim Government of Haiti cleared US$ 52.6 million in back-due interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. payments to the World Bank in a move that had been long awaited by the so-called international donor community as a condition for new “assistance”.External debt service Debt service The sum of the interests and the amortization of the capital borrowed. had more than doubled between 1996 and 2003, and of the government’s 2004-2005 budget, 22% of public expenditure is dedicated for debt service repayments. In relative terms, this in effect means that debt service actually constitutes the number one priority policy of the virtually bankrupt interim government.

Four days after the payment transferred by Haiti, the World Bank announced that US$ 73 million would be dispersed to the country. Of this sum, US$ 61 million would be devoted to “economic governance” support measures geared to putting in place market procedures designed to privatize the country’s remaining public sector (telecommunications and energy) and accelerate the transfer of capital to transnational corporations.

Today, Haiti’s external debt stands at some 1.4 billion u$s and expected debt servicing at 70 million u$s annually.

Is it not fair to ask just exactly what has changed, two hundred years after France imposed an economic blockade on Haiti after its slave population emancipated themselves -a blockade that was only lifted ten years later when the leaders of the first independent black state agreed to pay their former colonial masters 150 million gold francs in compensation, a sum now valued at nearly 22 billion u$s- ?

Once the “independence” debt was paid off, mortally wounding the economy and determining its integration into the world economy as a marginalized and peripheral purveyor of resources and cheap labor to the center, the new debt was accrued largely under the reign of terror of the Duvaliers - father and son- who, steeped in the blessings of the Cold War, faced no questions when it came to raking in manifestly odious loans.

The external debt that the community of so-called international donors continues to collect from the people of Haiti, is beyond any shadow of a doubt, illegitimate. Some 40% of the debt is prima facie odious, accumulated as it was under the Duvalier dictatorships and used systematically to oppress and repress the Haitian people. Furthermore, under the circumstances of death and destruction now attributable in no small portion to the historic legacy of the independence debt and its more recent stabilization and structural adjustment counterparts, there is no possible justification for the international community of “donors” continuing to collect its pound of flesh.

We must join together not only to press for the unconditional cancellation of all the external debts still claimed of Haiti but also to demand that policies of restitution and reparation be adopted in recognition of the historical, ecological, and social debt due to the people of Haiti, in particular from France and the United States. New external financing made available to Haiti should be done on a non-reimbursable basis and earmarked for support of those priorities, projects and programs developed and determined by local and community-based groups and organizations rather than those developed by the international community and now reflected in the Interim Cooperation Framework (CCI for its initials in French).

Buenos Aires, April 14, 2005

Beverly Keene
Jubilee South / Américas

On the basis of documentation and analysis supplied by member-organization PAPDA, in Haiti, and additional information gathered in the course of the recent visit to Haiti of the “International Fact-finding and Solidarity Mission”, April 3-9, 2005.

For further information: jubileosur at wamani.apc.org / papda at papda.org.



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