By Bobb Rousseau | Opinion Columnist
Since 2015, the value of the dollar has been increasing rapidly in Haiti. According to some raw data published by the country’s central bank, Haitians need approximately 100 gourdes to purchase a dollar on the informal market in today’s economy. Although they have more gourdes in their pocket, they cannot afford essential goods due to uptick inflation, ultimately leading to weak purchasing power, unemployment, hunger, and insecurity. Because the diaspora does nothing to stabilize or increase the gourde’s value, we the people are become more impoverished by the minute while private banks and money transfers bureau are becoming more prosperous by the second.
The problem of this widening USD/HTG spread resides in the practice of money service agencies not executing transfers in USD or at the informal market rate, resulting in the value of the Haitian gourde falling relative to that of the American dollar; any other foreign currency circulation in Haiti, for that matter. The more dollars that are in circulation on the market, the fewer demands for the dollars. There are plenty of dollars in the country, but the banks do not issue them as the government makes it illegal for transfers to be executed into foreign currency. Economists and financial analysts agree that a tighter exchange spread can balance the economy based on the supply and demand theory.
The BRH is yet to adopt a sustainable approach to affect the country’s monetary policy. The multiple unscheduled injections of millions of dollars into the economy have not produced visible changes to the exchange rate. BRH gives the dollars to the banks instead of subsidizing big businessmen to keep prices of essential goods stable and manufacturers to create jobs and farmers to produce crops. Stable prices reduce inflation as the people conserve their purchasing power even when the dollar price may rise.
The country’s weak local production is not related to the exchange rate. On the contrary, it is the strategy of stocking dollars that is creating inflation and destroying the national production.
While waiting for the government, banks, and money service agencies to care about the country’s economy, the diaspora is working on a two-phased approach to send dollars in Haiti without going through neither banks nor money transfer offices.
The first phase of this alternative strategy is called “Clustered Remittances”. It is allowing the diaspora to group themselves by zone. Each zone will select a date in the month to remit money to Haiti. The group will designate someone to go to Haiti with the money. This member will give the money to a local diaspora bank, which will execute these transfers to their respective beneficiaries.
The second phase of this approach will allow the diaspora to establish an online bank, offering the diaspora the opportunities to open an account. The online bank will be international because each country will issue a Routing Number or a Society for Worldwide Interbank Financial Telecommunication (SWIFT) that will allow the diaspora to move money from their international account to the local diaspora bank that will exist in several major cities. The beneficiaries, who will have an account in any local bank, will withdraw their money in the American dollar.
The diaspora is not downplaying that establishing a single exchange rate by which banks and money transfer agencies will abide and eliminating the informal market manned by street sellers is the most practical method to stabilize the exchange rate. Since the government is not intervening through austere measures, the diaspora is doing so by implanting banks to drive banks and money transfer agencies out of the foreign exchange market. The fees collected will be invested, not to fund students whose families cannot afford to pay tuition, but to promote excellence in education in Haiti. The diaspora banks will also grant developmental loans to farmers to work their lands while it will be urging the government to gradually implement a tariff and quota rate on imported products to even the playing field for locally grown products.