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Haiti in Trouble Again

By Patrick Moynihan and Tommy Cody

The small island nation and second oldest republic in the Western Hemisphere is careened by yet another perfect storm—this one of human making.

Editor’s Note: This article was previously published on June 6, 2019.

When small, oft-forgotten countries like Haiti experience high inflation, it does not make the news like a country such as Mexico or Argentina would. However, the people of Haiti are likely to suffer as much or more given that their buying power is already the weakest in our hemisphere.

Whether it is on our radar or not, skyrocketing inflation, unemployment, and a quickly weakening currency are destabilizing an already vulnerable country adding daily to the heightened political unrest. There are ongoing riots in the country asking for answers; some are even asking for the president to step down.

Most recently, as if the situation was not dire enough, the very agency responsible for collecting import taxes—the main source of revenue for the struggling nation other than direct aid—has gone on strike. Workers at the Directorate General of Taxes (DGI) want their pay adjusted. Who wouldn’t if your paycheck just lost over 30 percent of its buying power? However, they may end up with a nose-less face given it is their work that brings in the money the government has to pay salaries.

In the past 12 months, the Haitian gourde has decreased precipitously in value. It now takes over 90 gourdes to purchase one US dollar—it was in the low 60s last June and as little as 45 in 2015. The resulting high inflation (over 25 percent) is sending an already poor nation into greater poverty and increased political turmoil.

Since Haiti produces very few goods, currency devaluation has a direct and immediate impact on the livelihood of everyday Haitians by increasing the local cost of imported goods. Already struggling, those at the bottom of economy—70 percent of Haitians—are hurting the worst. However, the economic crisis is severe enough to curtail normal operation of even large businesses.

To take a step back, Haiti’s current economic turbulence is not solely a result of internal issues. The recent failure of Venezuela’s economy is a major factor. How? Out of appreciation for the safe-harbor Haiti provided to Simon Bolivar, the great South American liberator, Venezuela has historically provided Haiti with aid through its PetroCaribe program in the form of subsidized petroleum products. Much like a grotesquely played game of musical chairs or the stomach punch end to a Ponzi scheme, when the Venezuelan subsidy stopped, several politicians and an economy were scrabbling for a place to land.   

Haitian private sector member, Patrick Brun, worries that Haiti’s currency problems have kick-started a treacherous cycle. “Businesses adjust their prices to replacement cost and this drives prices up,” Brun stated. “As a result, people need more gourdes to purchase the same quantity of goods while revenues do not increase.”

Unfortunately, the pattern Brun details above weakens the gourde even more; it causes increased incentive to ‘dollarize’ (to post prices or makes sales in US dollars) the economy. This forces the everyday Haitian to buy dollars—putting more downward pressure on the gourde. This negative cycle places greater stress on families’ budgets, making even small, daily purchases high-stress decisions.

Even those fortunate enough to keep their jobs suffer and risk losing the economic foothold they established for themselves. As Brun warns, Haiti’s middle class is at great risk. “Where higher income households can cope for a limited period of time with the difficulties caused by accelerated devaluation, borderline middle-class households drop quickly below poverty levels,” he stated. What exactly this drop below the poverty line looks like depends on what families value and are able and willing to sacrifice. For many, this means difficult choices with long-term consequences.

Haiti’s recovery from immediate issues has proven near miraculous in the past. This can be attributed to its amazing people and their hearty love and willingness to sacrifice for nationhood. However, a country cannot simply will itself a future. A country must also have a working economy for even the best of people to have a fighting chance. 
Patrick Moynihan, a former commodities trade with Louis Dreyfus Corp, has fought to bring people in Haiti out of the margins for over two decades through his leadership of The Haitian Project, Inc., a Catholic mission project that has brought hundreds of young Haitian men and women out of poverty through education.

Haitian Times

Haitian Times

The Haitian Times was founded in 1999 as a weekly English language newspaper based in Brooklyn, NY.The newspaper is widely regarded as the most authoritative voice for Haitian Diaspora.
Haitian Times
Aug. 03, 2019

ONE COMMENT ON THIS POST To “Haiti in Trouble Again”

  1. Morgan Llewellyn Cadle says:

    Haiti is a Caribbean country that shares the island of Hispaniola with the Dominican Republic to its east

    I am looking for HAITIAN INVESTORS

    So below is an idea for a new Frye island festival which we use cruise liners as floating hotels which made she think of an old plan I did for the island of Haiti about 5-6 years ago and could incorporate, see the greatest cost is imports so by investing in the island to provide food and drinks at the same time introducing ethanol and electric small cheap cars reduces oil imports and costs and starting large farms to export to other islands and sell to hotels increases revenue, also acts as a type of reforestation binding the soil to stop mudslides and increasing nutrients into the soil, by growing crops for a brewery to produce beer and liquor you can sell to hotels and other islands and festival but also produce ethanol for fuel and bread products and food reducing taxable goods and producing clean renewable energy and small electric transport no oil costs and moves towards self sufficiency
    while also introducing new casino on the island which would bring Monarchs Radio and need for speed challenges to gamble on
    By creating ocean fish farms you can create better fishing conditions
    All of this brings in tourism currency which increases the islands wealth and better health for the people as well as new employment opportunities
    This is part of a 5 year plan to grow the island and I am looking for HAITIAN INVESTORS

    To be continued…..
    Breaking the curse enterprises
    H. A/RyD

    Fyre festival forget

    you got burnt once -NOT TWICE

    looking for i-vestors

    i mean you could use
    *cruise liners for transport and accommodation>>>conjunction with coastguard
    *island brewery_beer and liquor orders before to avoid taxes
    *hook up with island hotels to ship and bring in food buying directly from the hotels to avoid food import taxes and also local producers paying them allow hotel food tents
    *casino boat and local competitions run by Monarch Radio via W.V.R radio live stream of events
    *local island bands
    *new Latino bands.
    Rock Band
    *new DJ’s from south america ,islands and america Mc^loud
    * use crypto currency for bands increasing value of crypto currency stock
    *close encounter event -4 screens the size of billboards used for streaming of live betting sports and gladiator competitions
    *t-shirts hats bags sales
    *local sellers flea markets
    *1 day cruise around islands so people spend money on islands
    *local food shows-youtube
    *rights to playlists for resale on download and iconic record and CD

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