By Max A. Joseph
Debt is an instrument of control and other insidious motives that have been in use since ancient times. Its potency painfully felt when the debtor becomes insolvent.
European Union member and bankrupt Greece may be thousands of miles away from United Nations-occupied and destitute Haiti, but the distance doesn’t preclude these two countries from experiencing similar issues inherent to the brutal nature of the global order.
Under a narrative that exculpates perpetrators and vilifies victims, these two countries are portrayed as unsuitable to their neighborhood and, by extension, unworthy of sympathy from their more affluent and powerful neighbors. Succeeding generations of Greeks, like their Haitians counterpart, will have to deal with the nasty consequences associated with being an insolvent nation. It certainly does not help that the institutions equally responsible for the Greek debt crisis – Europe Central Bank, the giant international banks and the IMF– are the ones formulating the solution.
Let’s start with Greece, a country of 10 million inhabitants and a national debt of $380 billion. As a member of the world’s largest economic bloc, the country certainly possesses many advantages that may be appealing to lenders. However, were these “advantages” sufficient enough to warrant such vote of confidence in its ability to repay this massive debt? Absolutely not; despite a highly-educated workforce, Greece is essentially a developing economy that relies mostly on tourism and agricultural exports.
It will never be able to pay off this enormous debt.
Because the global economy is interwoven, the Greek debt crisis remains a threat to global prosperity seeing that it could usher a domino effect, engulfing other heavily indebted and much larger EU economies. That being said, shouldn’t the international lenders shoulder part of the blame and absorb some of the losses that come with Greece’s inability to fulfill its contractual obligations?
In a normal situation that would be the reasonable thing to do but in the arcane world of international finance, such mundane solution is anathema because portion of the debt are essentially investments made by states and private pension funds on behalf of retirees. Though most of the debt is nominally owed to EU governments and banks, their true ownership might be retirees from Cleveland, Ohio; Marseille, France, Manchester, England, or Munich, Germany. These retirees no doubt will not be asked to take smaller retirement checks because of bad decisions by mutual or hedge funds and banks or the Greeks’ inability to pay.
Predictably Alexis Tsipras, the Greek prime minister, was fighting a losing battle despite the popular support expressed in the July 5 referendum in which almost 62 percent of his countrymen convincingly rejected the burdensome conditions of the EU lenders and the IMF. As recently as the beginning of the twentieth century, Greece would have been invaded and occupied by national armies seeking to collect on behalf of their respective banks. Fortunately for the Greeks, that primal approach to collecting debts has been in hibernation, meaning not completely abandoned, under the 1944 Bretton Woods Accords, which created the ultimate mechanism (IMF and World Bank) for a collective and more effective control of international finance by the western powers.
Likewise Haiti, a perennial outcast in the international arena and current holder of the unenviable title of “poorest country in the western hemisphere,” was not so lucky. Its path to poverty — perpetual political turmoil and insolvency, though wholly different than that of Greece– is consistent with the characteristics of international relations. July 28 marked the hundredth anniversary of Haiti’s first occupation by U.S. Marines on behalf of U.S. corporations, which lasted nineteen years (1915-34.)
Whereas Greece’s monstrous debt originated with bad decisions by that country’s leaders and greedy international lenders, that of 1915 Haiti in contrast was the end result of bullying and robbery by France.
To sum it up, the sacrifices made by the more than one hundred thousand slaves that perished during Haiti’s war of independence (1791-1803) were nullified when France, with the backing of England, Germany, Spain and the U.S. navies, imposed a huge indemnity on the young republic in exchange for a formal recognition of its self-liberation. Apparently NATO (North Atlantic Treaty Organization) informally existed prior to its founding in 1949.
Adding insult to injury, Haiti was forced to borrow the money from French banks at an exorbitant rate, which inevitably bankrupted the country. The National City Bank of New York, aka Citibank, would later acquire the deed to that loan from under the U.S. occupation whose premise (the Monroe Doctrine) could not tolerate the presence of a European competitor.
When a comprehensive account of the April 1825 naval blockade of Haiti and subsequent U.S. occupation of that country on July 28, 1915 is finally written, preferably by non-western historians, these two episodes will rank among the most severe punishments ever meted out on a defenseless little nation by predatory powers.
Ever since ancient Greece was yanked from the Ottoman Empire by the British and resurrected in 1830, it has been unable to find it’s footing in a neighborhood infested with predatory powers. Haiti, which came into existence in the course of a hard fought struggle against slavery and colonialism, has been in a corresponding situation since its inception in 1804. Until small countries like Greece and Haiti find a way to extricate themselves from the grid, they can expect more of the same.