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The World Bank’s role in Haiti


February 10, 2010

Beginning in the 1980s, the U.S.-led World Bank tightened its grip on Haitian economic policy. Essentially, it decided that the dysfunctional Haitian elite should encourage international investment in export-oriented assembly sweatshops. This was called a "structural adjustment program." Haiti’s trade tariffs on foreign goods were to be removed, public utilities privatized, and all state subsidies removed—including on essential items like gasoline, subject to sharp price fluctuations that can greatly increase transportation costs for workers and street vendors.

Assembling the goods, of course, would be the super-exploited Haitian worker, considered by World Bank experts to be Haiti’s greatest asset. The ideal was to make Haiti "the Taiwan of the Caribbean." Today, textile assembly plants produce 90% of exports.

There are about 20,000 assembly workers in Haiti. They make about 20 cents an hour, about 70 Haitian gourdes a day (40 gourdes equals around $1). A study by the Haitian government showed that a subsistence salary would be closer to 300-400g a day.

Despite heavy quake damage to assembly-plant buildings, Haitian workers in some plants have been ordered back to work. Said Laurance Merzy, 32, a worker at DKDR Haiti in Port au Prince, "The walls are still standing, but they are cracked. It is not safe in there." The New York Times reports that the Palm Apparel T-shirt factory in Carrefour, a few miles outside of the capital and at the epicenter of the quake, collapsed, killing at least 500 people.

An essential player in maintaining the plantation system in Haiti is Obama asset Bill Clinton, who, in addition to promoting tourism and sweatshops in Haiti, successfully campaigned for passage of the Hope I and Hope II trade bills. Hope I and II require yearly certification that Caribbean countries are complying with guidelines that mirror World Bank policies—that is, super-low wages that attract foreign investors.

Last summer, a struggle erupted for passage of a minimum-wage increase from 70g to 400g a day. Tens of thousands of workers took to the streets in August, but a massive deployment of UN troops blocked their entry to the assembly sector. In the end, Preval bowed to pressure from Bill Clinton to increase the minimum daily wage to 125g ($3) in 2009, which would rise to 200g ($5) in 2012. Assembly workers are exempt from the new wage levels and will only receive the 200 gourdes in 2012.

In reality, the initial 125 gourdes is worth less than half of the minimum wage that existed in 1980 under the U.S.-backed dictator Jean-Claude "Baby Doc" Duvalier. Annual inflation in Haiti over the last decade was about 12-14%, although accurate figures are hard to come by.

Another key goal of the World Bank plan was to redirect food production away from satisfying the nutritional needs of Haitians to producing food for the export market. A 1982 document of the US Agency for International Development (USAID), a federal "aid" agency often linked to the CIA, proposed the "gradual but systematic removal" of domestic crops from 30% of all tilled land, whose products can then be exported.

The result was the massive migration of Haitian rural farmers and workers from the countryside, where most Haitians live, to already over-crowded urban centers like Port-au-Prince, where unemployment stood at 70-80% before the earthquake.

Rice, a staple of the Haitian diet, used to be produced in quantities that would satisfy domestic needs. However, World Bank economic policy meant dropping tariffs on imported goods. Within a few years, cheaper "Miami rice" flooded the Haitian market, resulting in the destruction of domestic rice farming.

In 2008, after a 45% jump in the price of Miami rice in two years, there were "food riots," as thousands poured into the streets in the capital shouting, "We’re hungry. Feed us!" Some described their hunger pains as "swallowing Clorox." UN troops killed about a dozen protesters throughout Haiti. The practice of eating mud laced with sugar is not uncommon in Haiti.

Keeping Haiti politically dependent on the World Bank and Western capital are loans from the World Bank and imperialist governments that come with political strings attached, as do the "structural adjustment" programs. Today, over 50% of the almost $1 billion Haitian budget originates from so-called foreign aid.

Foreign debt had multiplied 17.5 times between 1957 and 1986, the years of the Duvalier family dictatorship. In 2001, the yearly debt servicing alone was $321 million.

However, last June the WB, IMF, and Paris Club reduced the current debt by $1.2 billion out of $1.4 billion to make payments "bearable" as part of the Heavily Indebted Poor Countries initiative (HIPC), after years of delay. New loans will increase the debt again unless a genuine debt cancellation is enacted. In order to qualify for HIPC, however, Haiti had to be certified by imperialist institutions as being in compliance with World Bank/IMF policies of "structural adjustment," the privatization of public utilities, the elimination of tariffs on foreign goods, and the elimination of all price subsidies, etc.

A government study of the public phone company found that its annual revenues amounted to approximately $600 million, but as a result of privatization, this amount was lost to the Haitian people for schools, roads, and medical care—as well as debt repayment.

Although in the wake of the crisis there has been an international call to cancel Haiti’s debt, much of it having originated with dictatorships, Haiti is still on the hook for about $764 million to U.S.-dominated lending institutions, which constitute about 80% of all Haitian debt.

Activists in the Jubilee USA network and author Naomi Klein launched a campaign that pressured the World Bank’s International Monetary Fund into restructuring a recent $100 million loan into a no-interest loan, with the possibility that the IMF might decide that it does not have to be repaid at all.

What is needed is a powerful workers’ movement in Haiti that will challenge the entire system of vulture capitalism and imperialism and reconstruct Haiti under the democratic control of Haiti’s working masses. It would enforce the cancellation of all foreign debts. That would require building a revolutionary party and working for a socialist revolution in Haiti, and building a powerful solidarity movement in the U.S.

As the early 20th-century revolutionary leader Rosa Luxemburg put it, the choice faced by humanity is a choice between "socialism and barbarism."

(The author is a long-time Haiti solidarity activist and a member of the TWU in New York.)

:: Article nr. 63163 sent on 11-feb-2010 05:24 ECT


Link: louisproyect.wordpress.com/2010/02/10/two-guest-articles-on-haiti/

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