I am neither an economist nor a banker. However, I am speaking here as an investor, a small trader, and a consumer. I am open to receiving negative reviews for the approach that I am about to recommend to the Bank of the Republic of Haiti (BRH) to stabilize the Haitian economy in record time.
I do not support how the BRH throws these millions on the Haitian financial market from the outset. For me, these measures are counterproductive because they give the banks enormous opportunities to keep the population in poverty while they constantly depreciate the gourde.
For more than two years now, I have been continuously maintaining that the Haitian economy could have performed better through price stabilization instead of interest and exchange rates stabilization. My assessment is because the banks, despite these regular injections from the BRH, continue to grant loans and exchange the dollar at fluctuating rates.
Instead of throwing millions of dollars into the money market, the BRH should instead give a tranche of those sums to large traders and utility providers. It should inject the other in agricultural credits and the construction of factories for local and outsourcing production. I mean that banks should not receive money from the BRH because they do not facilitate individual integration into the market of goods and products. Perpendicularly, the government would establish tariffs and quotas on foreign products entering the Haitian market to ensure a fair balance between imported products and products circulating in the market. This strategy has better potential to stabilize the prices of essential goods and services.
The subsidy of large traders would allow consumers to retain their purchasing power to balance the supply and demand principle and for the economy to self-stabilize (invisible hand) or without the need for the BRH to inject more dollars. It would also improve the economic condition of each individual. Therefore, it would generate beneficial effects at the national level, especially at the gourde’s value, which will gradually resume its appreciation.
As long as the BRH subsidizes the most consumed public products and services, the Haitians would make optimistic financial projections because the gourde’s prices and the value of the cent would remain relatively stable.
The way the BRH intervenes in the economy disrupts the natural order of the market because it only facilitates the dependence of every Haitian on the dollar and investors on bank loans.