As it is becoming evident that neo-liberalism cannot survive in its present form, should Haiti stick to the prescriptions of the IMF/ World Bank/George Soros ensemble, or declare an economic emergency? In light of the global economic turbulence that leaves most economists clueless, Haiti should extricate itself from this discredited economic model and chart its own destiny. Although capitalism will endure because of its compatibility with the human character, the notion of placing economic interests of nations into the hands of corporations rather than states is not only counter-productive but also downright dangerous in the age of overpopulation and diminishing resources. For a poor nation like Haiti, changing course is necessary for many reasons:
Firstly, neo-liberalism, primarily geared toward privatization and fiscal restraint, is incompatible with Haiti’s urgent needs to rebuild its infrastructure, i.e. roads, electricity grid, and a modern communication system. Secondly, Haiti’s economy is expected to shrink this year because the remittances sent by expatriates, the country’s largest source of revenues, are declining as a result of the global economic crisis. Thirdly, the well-publicized notion of Haiti being one of the world’s most dangerous places makes it an unlikely candidate for foreign investments. Fourthly, the high unemployment rate and soaring cost of living also make the country a prime candidate for spontaneous and violent disturbances. Therefore, public spending may be the only practical solution to what would be an embarrassing encore for the international community since MINUSTAH would be called upon to use deadly force against the impoverished and hungry masses.
Where would a bankrupt Haiti find the money? The answer resides in Haiti declaring an economic emergency, which would involve imposing strict limits on imports and the amount of foreign currencies any individual can take out of the country, and renegotiating the terms or declaring a moratorium on payments of its foreign debts. Many would argue that such step is counter-productive as it would deter foreign investments, thus increasing unemployment. This argument however does not hold water because the flow of foreign investments that the IMF/World Bank prescribed medication was expected to bring never materialized. Moreover, under the current situation, Haiti is practically living beyond its means. Last year’s 1.6 billion of dollars sent home by the expatriates simply went toward financing the country’s chronic account deficit, leaving no discernible marks on its economy. This revolving door needs to be shut or the dependency on foreign aid that comes with Haiti losing its sovereignty to the extraterritorial power of the foreign-funded NGO’s would endure.
Adding insult to injury, some of the IMF/World Bank recommendations not only defy basic economic common sense but also foster Haiti’s insolvency. With the most unorthodox being giving local importers tax breaks and raising taxes on consumption, a policy implemented under the illegitimate rule of Gerard Latortue (2004-06). It disproportionably affects the poor, rewards the elite, and drains the country’s foreign currency reserves. With Michelle Pierre-Louis, a George Soros alumnus, as head of the current government, the policy is being institutionalized even as the architects of neo-liberalism are rushing toward the opposite direction. The stew of new taxes aimed at raising revenues should have included levies on certain imports (cars and other non-essential items), but the government, as has always been the case, decided on the path of least resistance by sticking it to the resilient masses.
Actually an economic emergency is not a new concept. The rationale behind such necessary move is to allow a country ample time to restructure itself. And, Haiti, being one of the world’s least economically-structured countries, needs this breathing space or risks an implosion despite MINUSTAH’s oppressive presence. Incidentally, economic emergencies have been tried before by countries that today enjoy one of the highest standards of living in the world; England and France at the end of WWII, and Israel in the first decades of its existence. Therefore, declaring an economic emergency would not be such a drastic step for one of the poorest countries in the world.
More ominously Haiti’s near-total dependency on imported foods puts it at the mercy of natural or man-made catastrophes in the producing countries, a situation that could engender widespread famine or worse. Last year’s riot over the soaring price of foods was a harbinger of more serious troubles to come. Governments work for the people not the other way around. The fact that Haitians remain practically quiet in the face of these provocations could only mean two things: either they have embraced their fate, or are so traumatized by the heavy-handedness of the occupiers as to be insensitive to their predicament.
One must admit that since the advent of modern-nations, governments have proven incapable of managing national resources as they should; however they invariably fared better as arbitrators responsible for social peace and economic redistribution. Fittingly, this contradiction not only helps explain the failure of communism but also the success of John Maynard Keynes’ economic theories during the 20th century.
Private enterprise epitomizes efficiency and productivity; therefore remains the only economic system that can foster social and economic development. Almost everyone would agree, because all of us have experienced the horrors of government-run agencies. However, a partnership between governments and the private sector is necessary to prevent greed, a human peculiarity, from destroying our civilization. In Haiti’s case, fostering this partnership is the only viable solution, as anything else would bring disaster.