Chapter 4: International Aid - saviours or enslavers

The Pentagon and the CIA were not alone in their abuses of the Haitian people. The US also used aid and lending organizations specifically NED (National Endowment for Democracy), WB (World Bank), IMF (International Monetary Fund) and especially USAID to manipulate Aristide and the Haitian economy. In July 1993, for example, Aristide hosted the 'Haiti Government/Business Partnership Conference' in Miami. The WB, IMF, USAID and the UNDP were all represented. They spent the time at the conference presenting their plans to rebuild Haiti and pointing out the errors Aristide had made during his seven month Presidency. The centrepiece of the discussion was a USAID $36.5 million emergency recovery loan to repay debt ran up in Haiti during the coup by the military junta.

The importance of US investment in Haiti cannot be over stressed. The US account for over 90% of the total foreign investment, 95% of Haiti's light manufacturing exports go to the US and a total investment of $120 million has been made almost entirely in the assembly sector.⁽¹⁾

USAID has a number of goals that would sound very familiar to their cohorts in the IMF and WB. They wish to alter the financial system to help foreign money to move without restrictions. They believe that market economies offer the best prospects for sustained growth. Development of export and local markets while avoiding the taboo of import substitution and unwarranted protectionism are the keys to prosperity. The question of whether or not this really works is a topic for another paper, suffice it to say that the so-called 'Asian Tigers' built up their economies using extreme protectionism and centrally planned economies. These success go totally against USAID's (and IMF and WB's for that matter) policies and beliefs.

USAID's first major involvement came in 1986 with $7.7 million put into an Export and Investment Promotion Project to recruit investors into Haiti. The consequence of USAID's program was to raise high profits for the American companies that located in Haiti while at the same time driving down wages by 56%.⁽²⁾ According to USAID one of their primary objectives was to help Haitian women but they do not track how many women work in the jobs they create or whether the minimum wage was indeed being paid or even what the working conditions were like. What they do have studies on is that women are believed to be "better qualified for work which requires detail, dexterity and patience...Women tend to be quieter" and you want women who are "young and highly motivated who adapt easily to industrial discipline."⁽³⁾ After rent and transportation costs the average Haitian worker brings home $2.75 per week to feed themselves and their families.⁽⁴⁾

USAID stopped their promotion of Haiti as an assembly paradise of low wages when Aristide took office. "Decisions have been made that could be highly detrimental to economic growth for example in the areas of labour and foreign-exchange controls."⁽⁵⁾ These decisions included Aristide wanting to place temporary price controls on basic foodstuffs so the populace could afford to eat as well as raising the minimum wage from $0.33 to $0.37 per day. These were totally against USAID's policy of utilizing low wage labour to attract investment. "...Poverty in Haiti (which US officials euphemistically refer to as a favourable investment climate) is actually the goal of US policy."⁽⁶⁾ " In country after country throughout Central America and the Caribbean, USAID's development strategy is based on working with local business elites in order to help them to more efficiently utilize their large pools of low-wage labour."⁽⁷⁾ USAID thus denounced Aristide's reforms and immediately cut off aid to the government. They did, however, continue to deal with the business elite providing 'technical assistance in labour relations', developing public relations campaigns and they continued to try to convince American companies to go to Haiti. They poured over $ 100 million into the pockets of the Haitian business elite in order to enlist their support in promoting Haiti as a low-wage site for US companies fleeing off-shore.⁽⁸⁾ It was only with Aristide's return by US troops that the Inter-American Development Bank resumed its lending and drafted up a $800 million social/economic plan for Aristide to follow if he wanted the money.⁽⁹⁾

Aristide went before the UN General Assembly and thanked the world for the assistance received and promised a "festival of reconciliation"⁽¹⁰⁾ when he returned to Haiti and he outlined his ten year plan of national reconstruction, but it will be a long time before the country will be allowed to rule itself. "Haiti is either going to be ruled or manipulated from a distance as a satellite of American foreign policy, something [that] will endanger the cultural individuality of Haiti, and that of other Caribbean Islands as well."⁽¹¹⁾

Preval also has gotten the USAID vision handed to him. He attempted to promote labour intensive activities such as agriculture as a priority area for development aid. The response was less than enthusiastic. "USAID will continue our efforts in this area, using government commitment, supported by other donors, to leverage our own diminishing resources."⁽¹²⁾ Diminishing in this unwanted area maybe, but their 1997 budget for Haiti is $ 108 621 000.⁽¹³⁾

The IMF and the WB are aiming for the exact same end objectives as USAID only they have a lot more money and more ways to disburse it. There is a catch, however, in that to get any of the funds the borrowing nation must submit a Letter of Intent outlining the government's economic policies tied to criteria that must be met on a monthly, quarterly or semi-annual basis in order to receive the next piece of the loan. To ensure the Letter is up to par the IMF specialists sit down with the borrower and the WB specialists and they hammer out a Policy Framework Paper (PFP). That is the theory. In reality the borrower is handed the PFP and told to sign. This is what happened to Aristide when he signed the Governor's Island Accord and Preval is also tied to meeting the same economic objectives.

The macroeconomic objectives for FY 1997/98 include a) 4-5% annual economic growth rate b) reducing inflation to low single-digit levels and c) strengthening the balance of payments and increasing the national reserves. These are commendable goals but there is little data to support the IMF/WB programme as being able to achieve them. By using a tabular comparison of the effect of Structural Adjustment Loans (SAL) it can be seen that they have a small negative effect on growth. On the other hand by using econometrics SALs have a small positive effect on growth. It seems to come down to how one manipulates the data⁽¹⁴⁾. The strategy relies upon the ability of Haiti's growth to outstrip its growing debt costs, but this is not happening.

The IMF and WB rely on the same system of business elites as does USAID:

It has become an explicit target of the institutions, and the World Bank in particular, to shift the balance of power within governments towards those who expect to gain from the policy reforms encouraged by the institutions and/or those who are in any case more sympathetic towards such changes...The Bank strongly emphasises the importance of 'consensus building' among key political and bureaucratic members of the government, as well as of public opinion more broadly to ensure support for its SAL programmes.⁽¹⁵⁾

If this becomes the case in Haiti, and there is no reason to expect

it not to, Preval must be very careful not to allow the old rule of the elites at the expense of the masses to lead to exploitation and anarchy again.

Chapter 5: Conclusion

It must be kept in mind that the US has generally not intervened in foreign affairs unless there has been something to be gained (like oil in Kuwait) with the mission to Somalia providing one of the few exceptions. In the case of Haiti it was to stop the flood of impoverished Haitian refugees fleeing to Guantanamo Bay and Florida, and dying by the hundreds trying. The US wants stability in the Americas, not social justice, which explains somewhat their systematic attempts to degrade Aristide while hoping the junta under Cedras would hold the country together (after all his supporters were funded by the Pentagon, the CIA, the NED and USAID; therefore he should have been a natural ally). There was also a basic reaction against Aristide's populism and ideals of redistribution of wealth that are anathema to US economic and social beliefs.

Their inhumane refugee policy taken together with an ineffective embargo and weak diplomacy undermined any US (and UN) attempts to find a solution for the Haiti problem that did not involve force. Clinton also backed himself into a corner with his constant threats, but his bluff kept being called by Cedras leaving Clinton only the one option of armed intervention. In spite of this the US kept trying to flog sanctions to avoid having to make the hard decision even though the embargos were only really effecting the poor masses and not the rich elites. Bush and Clinton's position has just never been very clear. The intent of both was to promote and restore democracy but neither seemed inclined to put their convictions to a real test. This was not a muddled, hard to see picture like in Somalia. A democratic election which they themselves sponsored and supported was overthrown and the only reason that can obviously be seen for their lackluster attempts to restore Aristide was that their hand-picked man, Bazin had lost. The US must lose its apparent contempt for democracy and legal processes in other countries and harness their power to the authority of the UN to create an order based on justice and the rule of law and not just the manipulation of international organizations for selfish purposes.

The OAS was proven to be utterly ineffective as a regional negotiating organization. Their only true success was the deployment of the joint UN/OAS MICIVIH mission. Other than that they merely towed the US and UN line. The UN was more successful in some respects but equally ineffective in others. The "Harlan County" incident showed exactly who was calling the shots, and it most obviously was not the UN. The organization was used by the US, as was the OAS, to provide legitimacy for their actions and to share the burden of the costs of military operations once that phase became necessary. The US also was able to exit the situation well before the UN, which is still deployed in Haiti, to appease the Congress, Senate, the Pentagon, the CIA and the State Department. The UN seemed only to be effective when the US allowed them to be. The other major problem, which is indicative of almost all UN operations, is that they inevitably arrive after the massacres have already taken place, as in the cases of Somalia, Bosnia and Rwanda.

In spite of this, and the difficulty of the short and incremental manner of UN mandate renewal which foils long range strategic thinking, the organization has managed to oversee a democratic handing over of power from Aristide to Preval. As well, the creation and training of the HNP may just allow Haiti to separate itself finally from its burden of history. For this goal the UNSMIH mandate was extended to May 31^st, 1997, and could possibly be extended, following a review by the Security Council, until July 31^st, 1997. After this a new mission would have to be devised to keep the UN involved. Given the precarious position of democracy in Haiti at this time, one can only hope that this is done.

It is unsure as of this writing whether or not Preval's government , which overwhelmingly won the last election in Haiti, will last out the term if the UN leaves, or whether Aristide will try to run and win a second term. One can only hope that the cycle of 200 years of violent overthrowing of the government will never be repeated again.

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1. Barbara Briggs and Charles Kernaghan 'The US Economic Agenda' NACLA Report on the Americas. vol. XVII, no. 4, (Jan/Feb 1994).,p.37.

2. Noam Chomsky ;Democracy Enhancement Part II: The Case of Haiti' Znet @ www.lbbs.org/zmag/articles/chom3.htm, p.4.

3. Barbara Briggs & Charles Kernaghan 'The US Economic Agenda' NACLA Report on the Americas. vol. XVII, no.4, (Jan/Feb 1994).,p.38.

4. Ibid.,p.39.

5. Ibid.,p.40.

6. Avi Chomsky 'The Uses of Haiti' Z Magazine. (Feb 1995).,p.62.

7. Barbara Briggs & Charles Kernaghan 'The US Economic Agenda' NACLA Report on the Americas. vol. XVII, no.4, (Jan/Feb 1994)., p.39.

8. Ibid.,p.37.

9. 'Haiti: The Morning After' The Economist. vol.332, (Sep 24-30 1994).,p.42.

10. Barry Came 'Sweet Mickey's Flight' Macleans (Oct 17 1994).,p.25.

11. Derek Walcott 'The Salvation of Haiti' New Perspectives Quarterly vol. 11 no. 4, (Fall 1994).,p.25.

12. 'USAID Congressional Presentation FY 1997' USAID @ www.info.gov/pubs/cp97/countries/ht.htm, p.11.

13. USAID, Ibid., p.1. Italics mine.

14. 'The IMF and the World Bank' The Economist. (Oct 12^th 1991)., p.40.

15. 'The IMF and the World Bank' The Economist. (Oct 12^th 1991)., p.19.