12466: This Week in Haiti 20:16 7/3/2002 (fwd)

[Bob Corbett <corbetre@webster.edu>]

"This Week in Haiti" is the English section of HAITI PROGRES
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                           HAITI PROGRES
              "Le journal qui offre une alternative"

                      * THIS WEEK IN HAITI *

                         July 3 -9, 2002
                          Vol. 20, No. 16

THE NEOLIBERAL AGENDA IN HAITI
An Interview with Camille Chalmers

In the years following the 1986 fall of Jean-Claude Duvalier, a
popular movement developed which explicitly rejected the U.S.
State Department's neoliberal prescriptions for Haiti, popularly
known at the time as the "American Plan for Haiti." This movement
culminated in the 1990 election to the presidency of Jean-
Bertrand Aristide, an anti-imperialist priest, on a platform of
shoring up Haiti's besieged state industries, farmers, teachers,
and doctors. He also promised to raise wages and improve
conditions for tens of thousands of super-exploited assembly
workers, who toiled in sweatshops ringing the Port-au-Prince
airport.

So it is ironic, 12 years later, to witness President Aristide,
in his second administration, embracing neoliberal reforms and
secretly negotiating to set up new cheap-labor "free trade
zones," in which foreign capitalists will be even less
constrained than in those set up by Duvalier 30 years ago.

As a part of a special series of programs on Haiti aired on WBAI
in New York (see Haïti Progrès, Vol. 20, No. 14, 6/19/2002),
Christian Lemoine of Rezo Solidarite, a Haitian support group,
interviewed Camille Chalmers, a well-known Haitian economist and
founding member of the Haitian Advocacy for an Alternative
Development Program (PAPDA). Chalmers explains Haiti's current
neoliberal course and presents alternatives. We present here
large extracts of that interview, which was translated from
Creole by Lemoine.

Christian Lemoine: Can you give us an overview of the
globalization agenda for Haiti?

Camille Chalmers: The globalization agenda for Haiti is not much
different from the one which has been set for most underdeveloped
countries. There's a group of 50 or so countries around the world
that have been classified as Less Advanced Countries. Those
countries have been stagnant or undergoing negative economic
growth for most of the past thirty years. They've become
marginalized, and they're paying a very high price in this
globalization process.

In Haiti, this process has been accelerating since 1982. Since
then, various plans such as the so-called "US Plan for Haiti" or
the International Monetary Fund [IMF] Structural Adjustment
Program or SAP, have been put into effect.

The reforms being called for are pretty much standard. First,
monetary and financial liberalization, meaning a floating
exchange rate for Haitian currency that is determined by market
fluctuations. Then, the liberalization of foreign trade. That's a
very important aspect of these reforms. In Haiti, this has led to
the flooding of local markets with cheaper imported goods, which
has contributed to the demise of local production. This has
created a dependency on imported foodstuffs. In the 1980s, Haiti
used to import only 8% of the rice it consumed; nowadays from 60
to 68% of the rice is imported.

This trend of dependency on imported food is increasing. This
means that small farmers have been run out of business, they've
become unemployed. They've had to abandon their farms and migrate
to the slums of Port-au-Prince, Haiti's capital. This also means
that more and more people are undernourished in Haiti. It's
estimated that 40% of the rural population suffers from
malnutrition, while in the cities, there's a 70% unemployment
rate. These reforms have also damaged even the most dynamic
sectors of the Haitian economy, such as the local rice production
which had traditionally been a very resilient and productive
sector of the economy.

In addition to financial and trade liberalization, fiscal reforms
have been mandated to increase taxes and increase tax
collections, particularly on the working poor. These reforms also
include a substantial reduction in government financing of social
welfare projects such as education and healthcare. As a case in
point, Haiti is a world champion along with Zimbabwe, in the
privatization of education: 82% of the education sector is in
private hands.

These reforms also include a substantial reduction in the size of
the government. In 1994 the International Monetary Fund asked the
Haitian state to permanently layoff half the government
employees.

These reforms also include deregulations of all kinds to
facilitate foreign investment. Privatization of state enterprises
is also mandated. This means, of course, that these state
monopolies then get bought up by multinational concerns, which
then run them for profit. Of the nine state enterprises which
have been targeted for privatization, two have already been
privatized, Ciment d'Haïti, the construction materials plant, and
the Minoterie, the state flour mill. These privatizations have
already had very negative results. While prices for these
products have increased, there has been no improvement in their
distribution. There's been no improvement in providing access for
the masses to these strategic goods.

This whole range of reforms is supposed to lead to a better
integration of the Haitian economy into the world economy. But
the underlying justification for these reforms, which mandate
massive sacrifices, is a promise that they are supposed to lead
to a rapid and sizeable influx of foreign investments to
stimulate economic growth. However, the reality for Haiti and
other countries in similar situations is that these massive
investments have never materialized. For the most part, foreign
investments have gone to so-called intermediary countries with
established infrastructures such as Brazil, Venezuela, and Chili.
These countries are in a much better position to receive these
investments, and they also offer better returns and guarantees.

These reforms and structural adjustment policies which require
massive sacrifices but which yield no benefits in return are just
a fool's trap. They've proved to be a total failure. It's time
for us to switch to a development policy which is based on a
different logic and which is geared to the promotion of local
markets and of local production. A development policy which takes
advantage of the knowledge and skills of our small farmers in
Haiti, and from there we'll be able to stimulate export
production.

CL: Can you give us an idea of how the privatizations have
affected the various state enterprises such as [the state
telephone company] TELECO, [the state electricity company] EDH,
and [the state essential oils factory] ENAOL ?

CC: There are two kinds of privatization. There is an overt
privatization, where, for example, the flour mill and the
construction material company have been set up with mixed
ownership. The Haitian state has retained a 30% share of the
assets and the remaining 70% have been sold off to private
investors led by multinationals.

But there is also a de facto privatization, where, for example,
the phone company, although legally still a state monopoly, has
opened up the telecommunications market to private companies, and
these companies have a combined market share which exceeds that
of the state-owned sector. RECTEL, HAITEL and COMCEL control
185,000 phone lines, whereas TELECO, the state run company, only
controls about 100,000 lines.

The privatizations have taken place in extremely deplorable
conditions. The state enterprises have been liquidated and sold
off at far below market value. On top of that there are no
provisions to ensure that public interests are going to be
safeguarded. That's extremely important because, whether we
consider TELECO, the Minoterie, or Ciment d'Haïti, these are all
enterprises of strategic importance to any development policy. If
you are involved in any kind of construction project, the
availability of cement is of crucial importance. Many roads,
airports, bridges, sea ports, and infrastructure projects need to
be built, and they will all need concrete. So, what you have
today are enterprises which have a strategic development role to
play and which instead are being run for profit by foreign
interests.

This is in complete contradiction with the popular demands which
emerged from the 1986 popular uprisings. These demands are that
the state be engaged in providing for a comprehensive set of
social services as part of a development program. The Haitian
state is completely absent in education, healthcare, sanitation,
or in developing the agricultural infrastructure. Clearly,
without a substantial ability and commitment from the state to
administer public services, it's practically impossible to
implement an economic and social development policy.

CL: What is the privatization bottom line in Haiti?

CC: The net effect of privatization so far, in general throughout
Latin America, has been extremely negative. The most spectacular
example of this is probably Argentina, where practically all the
important state assets have been privatized. Argentina today is
faced with a profound crisis, and it doesn't have anything left
to sell.

In general, privatizations allow multinationals to take control
of an important part of a country's national assets, while they
never really contribute to market development or to the
development of consumption, or to the county's integration into
the world economy.

In Haiti, this situation is even more critical. There's never
been any industrial development in Haiti to speak of. The Haitian
state is a dwarf puppet state, and it doesn't even take part in
any of the essential development tasks. Privatizations are even
more irresponsible in this situation. We won't make a blanket
statement in favor or against privatization. We think that an
evaluation has to be made on a case by case basis. However,
strategic enterprises should remain under state control, while
others could be placed under mixed management, and others still
could be completely privatized. This should be done as part of a
development strategy which ought to prioritize public services.

So if we look at the privatization bottom line, we can see that
the price of cement and concrete is very high, the price of bread
is very high. On top of that, runaway inflation has reduced the
buying power of minimum wage workers to practically nothing at
all. These workers cannot even meet their daily needs. Since 1995
the minimum wage has been fixed at 36 gourdes per day, which
today has practically no value at all, less than $1.50.

Neoliberal policies in Haiti have led to the elimination of all
public services. The current policy should be to develop these
public services through massive funding. This would provide a
base for further economic development.

Every country needs a strong educational system in order to
stimulate development. Today, final secondary school exams are
being administered throughout Haiti. More than 40,000 students
are taking these exams. So pretty soon, from 30 to 35,000
students will have graduated. Yet there are only 1,800 to 2,000
entrance spots available in the universities. So there will be
about 33,000 students left with no opportunities whatsoever, with
no way to continue their studies. Most often, the families of
these students have had to make enormous sacrifices to put them
through school, sometimes even depriving themselves of food and
other necessities. And yet most will be stuck without any
opportunity.

So the priority should be in developing public services and
completely rebuilding the state, and modifying the relationship
between the state and the population. We also need to deal with
the massive poverty in Haiti. 82% of the population lives below
the absolute poverty line, with revenues of less than $1 US a
day. It's completely irresponsible to promote privatization in
these conditions. The priority in Haiti needs to be focused on
the development of basic social services such as public health
services and education. All this is completely foreign to the
capitalist profit motive and even more alien to the pursuits of
multinational corporations.

CL: What about the plan to develop Free Trade Zones along the
Haitian-Dominican border?

CC: We're in an extremely paradoxical situation in Haiti. The
Aristide government has been implementing these Structural
Adjustment Policies without even receiving any external financial
incentives to do so. Generally speaking, most governments which
are implementing these programs claim they are forced into this
because they depend on financing from the IMF to meet their
obligations. But it's been almost two years since just about all
the foreign aid to Haiti has been stopped, and the government
still hasn't changed its policies. It's still implementing this
structural adjustment program.

The Free Trade Zones are one of the most scandalous examples of
these policies. The Dominican and Haitian governments are setting
up a Free Trade Zone in Marie Bahoux, one of the most fertile
regions of Haiti. This area has a productive capacity of 30,500
metric tons of food per year, enough to feed half a million
people. When you are faced with such a massive food deficit as
Haiti is faced with, how can you justify destroying fertile land
to build concrete factories for the benefit of Dominican and US
investors?

Luckily, the local population and local farmers have mobilized to
oppose this plan. Solidarity groups on both sides of the border
have launched an educational campaign to explain the consequences
of this project to the local population. We, in PAPDA, have also
joined in this campaign....

We have to take advantage of [the controversy around] the Marie
Bahoux Free Trade Zone project to say that, in this very fertile
region, how can use the skills of the local farmers to help this
region develop its productive potential? How do we irrigate this
vast area? How do we preserve the area's water resources which
are amongst the most important in all of Haiti? We all know how
scarce and strategic a resource water has become in Haiti.

This Free Trade Zone project has been launched without any
technical or environmental impact study, or any study aimed at
developing the infrastructure along the border. This shows
clearly how irresponsible these projects are, and how they were
simply conceived just to please the Dominican government and to
help Dominican investors circumvent trade regulations and quotas.

The current mobilization against this project can be very useful
in pointing out how Haitian strategic interests are being
sacrificed for the benefit of Dominican investors, under the
pretext that this is the way of globalization and of economic
development. We've already suffered from such disastrous
experiments in Haiti. Not only in the Industrial Park in
Port-au-Prince, in the early 70's, but in the North East, where
the Dauphin plantation was established to produce rope for the
US. After having exploited and depleted the land for many years,
these foreign corporations then left and left behind a desolated
region. They've sucked out all the meat and left just the bones
behind. The local farmers in the area have been left to face
these deplorable conditions.

We need to take advantage of this situation in Marie Bahoux to
raise questions of strategic importance to the Haitian economy,
to promote choices which will truly help develop local resources
and markets, and help local farmers achieve their productive
potential. These farmers, despite the hardships they face, have
become an important and sizeable exporter of goods across the
Dominican border. So, rather than promote this Free Trade Zone
which would eventually transform this entire area into a vast
slum, we should instead be focusing on how to develop this area's
agricultural and tourism potential. This would not only benefit
local farmers, but would also benefit the entire country as well.

All articles copyrighted Haiti Progres, Inc. REPRINTS ENCOURAGED.
Please credit Haiti Progres.

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