Author: WHES

As the global economic balance shifts, the United States and other of the post-World War II powers say they’re ready to make room. The Group of 8 rich countries ceded to the Group of 20, where the interests of Germany and France must vie with those of India. Despite that, the maneuvering before this week’s meetings of the International Monetary Fund suggest that the big players may not be as ready as they claim.

HUGO CHÁVEZ must be feeling grateful to the number-crunchers who helped him redraw Venezuela’s congressional districts. The strongman turned last weekend’s National Assembly election into a referendum on himself; he inundated the country with propaganda via the state-controlled media and even refilled government food stores.

Writing in these pages in early 2008, we put the total cost to the United States of the Iraq war at $3 trillion. This price tag dwarfed previous estimates, including the Bush administration’s 2003 projections of a $50 billion to $60 billion war.

WHEN WASHINGTON starts handing out cash, it can be hard to stop. See, for example, the decades of subsidies the government has showered on the corn ethanol industry. The fuel was supposed to free America from its dependence on foreign oil and produce fewer carbon emissions in the process.

HAVING met President Obama, I’m confident that he’s a man of conscience who shares my commitment to bringing hope and care to the world’s poor. But I am saddened by his decision to spend less than he promised to treat AIDS patients in Africa.

Rumors are circulating that when the World Cup is over, foreigners will be expelled. But surely it must be clear by now that South Africa has long been a melting pot and that our immigrant population is here to stay?

We must ask ourselves whether xenophobia is perhaps just a label we have slapped on a phenomenon that has been inadequately analyzed or understood. Are our beliefs around xenophobia perhaps just lazy thinking?

Do we really collectively hate outsiders to the extent that we are willing to murder them, loot their businesses and homes and go so far as to set them on fire? Have immigrants not historically contributed significantly to building our nation? This is a situation that obviously needs to be more thoroughly examined.

Were we a truly xenophobic nation then the phenomenon would manifest across all sectors of the population – across different races, different classes and different neighborhoods. Given our history, surely there would be a trend or association between racism and xenophobia? Surely the old National Party supporters would be xenophobic, given that they were racists? After all, apartheid was built on fear and distrust of ‘the other.’

But these supposed outbreaks of xenophobia occur exclusively within one stratum of society – in poor, black communities. This fact alone provides a huge clue that we are not looking at xenophobia per se, but a rather more nuanced phenomenon.

South Africa has attracted huge numbers of immigrants, estimated at between three and eight million people. We also know that many of our own people have moved around the country to a degree that was practically impossible during apartheid times.

Most immigrants are political or economic refugees with little option but to seek accommodation wherever it is cheapest. This is usually in the squatter camps and informal settlements around the margins of our established towns and cities.
Here, new arrivals find themselves cheek by jowl with the poorest locals who are often internal migrants, seeking better prospects for themselves and their families on the margins of the new South Africa.

Frustration and desperation are prevalent amongst this poorly educated, often rural and disempowered population, whose lives remain largely isolated from state intervention, in the midst of a uniquely unequal society. Frustrations sometimes surface in the form of protests against a lack of ‘service delivery.’ The longer our poor and marginalized remain ignored, the more frequent and violent these protests are bound to become.

Within these communities, immigrants are perceived as being relatively successful. Many, like the Somalis, have created a niche by providing relatively upmarket ‘spaza superettes’ in informal settlements. This has resulted in alleged police shakedowns and staggering incidences of murders and robberies. Consequently, local spaza shop owners have been implicated in stirring antipathy against Somalis.

Similar dynamics exist amongst Zimbabweans, who comprise our largest sector of immigrants and refugees, fleeing the meltdown in their homeland. Zimbabweans, like other immigrants, have often had the benefit of better education, giving them a competitive edge. They vie against locals for scarce jobs, often settling for lower wages. So, too, with other immigrant populations who will settle for less as car guards, labourers and employment in other low paid, menial work.

Many of these outsiders are familiar with dispossession, marginalization and poverty, as bad, or worse than locals have experienced. Now they are pitted against already desperate people, in a situation that fundamentally revolves around the realities of economic survival. Desperate locals and outsiders compete in crowded proximity. Locals are (perhaps justifiably) aggrieved that their perceived entitlement to a better life in post democracy South Africa is being threatened by outsiders. The inevitable result is social volatility and violent reprisal, presented as xenophobia.

But what we are dealing with is not xenophobia but is the consequence of poverty and the lack of progressive economic transformation since 1994. Just as service delivery protests are about the continued inability of authorities to meet the requirements and demands of the most marginalized sections of society, we can make an equally strong case that these sporadic outbreaks of ‘xenophobia’ are simply another aspect of the same problem.

A close examination of purported xenophobic outbreaks of violence shines the spotlight on some of our most intractable problems, that of economic marginalization. We must realize that the problem lies not with ‘them’ but with us. Equally, this is where the solution lies. It is just as well that government statements have indicated that our leadership has now realized that these tensions are more due to economic realities than to xenophobia. Now leadership must take action and lead in addressing these insights.

For the poor, very little has really changed since 1994. The education system has languished. The job market has stagnated or contracted, even for matriculants. Economic activity has recently diminished; wages paid for unskilled laborers remain low. Much of this is because of our slavish pursuit of same neoliberal economic policies that we inherited, waiting for the trickle down effect to take place. We may as well wait for Godot.

The consequence of all of this is that the most marginalised sectors of our society, will seek the closest available scapegoat to blame for their situation. Immigrants fit the bill, rendered prominent through their perceived successes and vulnerable through failure of civil servants like the police to protect their constitutional right for equal treatment before the law.

Reassurances from the SA Police Services head, Nathi Mthethwa, that his officers will not tolerate any xenophobic violence are to be welcomed. Formation of a Cabinet task team to deal with this threat is also constructive. But are these approaches sufficiently nuanced? Does calling the problem xenophobia deal with the nub of the matter? Does sending in the army solve a systemic economic problem?

We can use our intelligence services to stay on top of potential hotspots. But if we do not change how we provide services to the poorest of the poor, then eruptions around ‘service delivery’ and ‘xenophobic violence’ will become indistinguishable in their results – social dislocation and spiraling violence.

We must also deal with the major problem of alleged police indifference to, and even collusion with, xenophobic outbreaks. In 2008 the police were accused of standing back and not properly protecting immigrants. If high level leadership within SAPS has not firmly informed officers of their constitutional obligation to serve all residents, whether local or immigrant, then any reassurances from the heads of police ring hollow.

We need to balance the rights of foreigners against perceptions of locals who also struggle to access state services, like adequate policing, health and social services. There is a real danger of exacerbating tensions if immigrants are perceived as having superior service access to locals and if the police are seen to take their side.

We have neglected the poorest sectors of our society for far too long. We must face the uncomfortable reality that ‘service delivery protests,’ supposed ‘xenophobia’ and even crime are just different aspects of the same problem – that of poverty, exclusion from power, access to services and lack of economic reform. These remain the most pressing issues faced by the most marginalized sectors of society – the poor and immigrants alike.

Unless we deal with these issues we are simply putting an imaginary lid on a pressure cooker that will blow, with unpredictable results for everyone. Permitting one sector to be portrayed and victimized as the ‘other’ is setting ourselves up for social instability and unrest, to the detriment of all.

Unequal societies are unhealthy societies. A failure to bridge this apparently yawning canyon of unmet expectations will inevitably trap us in cycles of violence against a faceless ‘other’ who dwell amongst us, be they rich, or foreign, or middle class, or from a different tribe or of a different color.

We have faced this chasm before. Never again can we allow the concept of ‘the other’ to tear our social fabric apart. The World Cup let us rediscover and share our common humanity and our Africanness in unimaginable ways. It has equally demonstrated our ability to meet goals at planning and completing complex infrastructure projects on time.

We must build on the success of the World Cup by setting more equitable service delivery goals. We need to urgently and meaningfully address the dismal situation of the poorest, most marginalized sectors of society. We don’t need only handouts but must provide hands up. We have achieved much but have much more yet to achieve.

Glenn Ashton is a writer and researcher working in civil society. Some of his work can be viewed at www.ekogaia.org.This article first appeared on The South African Civil Society Information Service and then in Pambazuka News where it may be viewed at http://www.pambazuka.org/en/category/features/65789 .

BP’s calamitous behavior in the Gulf of Mexico is the big oil story of the moment. But for many years, indigenous people from a formerly pristine region of the Amazon rainforest in Ecuador have been trying to get relief from an American company, Texaco (which later merged with Chevron), for what has been described as the largest oil-related environmental catastrophe ever.

(April 23, 2010) Did President Clinton and other recent White House tenants condemn Haiti to a future of endemic poverty through a self-serving U.S. rice export policy? An examination of Haiti’s economic liberalization strategies of the 1980s and 1990s indicates that the answer in part is “yes.”

Haiti’s economic liberalization began in the early 1980s as a result of a Reagan Administration initiative. The U.S. Agency for International Development (USAID), among other agencies, encouraged Haiti to start exporting manufactured and processed agricultural products, in tandem with emphasizing the need to import grain staples on the international market. In 1983, under Reagan’s Caribbean Basin Initiative (CBI), there was a vast increase in the amount of subsidized food, like rice, began to be exported to Haiti by U.S. agro-industries. Moreover, with the help of CBI provisions, U.S. experts worked to disassemble Haiti’s rural economy, even though USAID officials recognized that such a move could increase poverty and contribute to a decline in average Haitian income and health standards.

During the 1980s, USAID workers along with industrialists and large landholders dedicated themselves to create agro-processing facilities while simultaneously promoting the release of surplus subsidized U.S. agricultural products onto the Haitian market. The main goal of these restructuring exercises was to develop Haiti’s cities into exporting bases (i.e. manufacturing sites for American companies, particularly textiles). This restructuring program, in conjunction with the dismantling of the island’s rural economy, spurred massive migration of former Haitian farmers from the countryside to urban centers. However, upon their arrival, it quickly became apparent that there were not sufficient tangible opportunities available.. Seemingly, this imbalance was created by design: Haiti otherwise would lack the comparative advantage in any market. So, by spurring mass migration to the cities, workers would have to vie for even the least desirable jobs, thus creating an ideal situation in which workers would readily be vulnerable to exploitation. The abundance of dirt-cheap labor was and still is Haiti’s most reliable “comparative advantage,” and the process soon saw Haiti serving as an export platform for island rice grown by foreign agro industry that was too expensive for domestic consumption.

Washington’s reconstruction of the Haitian economy, as promoted by USAID, still did not witness a take off. In part, the plan failed due to the political instability that Haiti has experienced for most of its modern history. The turbulent and elite-controlled economic atmosphere of the small island state, which shares a border with the Dominican Republic, has been further compounded by its chronically endemic poverty, as well as soaring rates of unemployment. As Haiti was pushed to open its markets (by means of drastically reducing its import tariffs or, as a result of U.S. pressure, eliminating them altogether), the U.S.-based American Rice Corporation pounced on the opportunity to penetrate Haiti’s newly unprotected rice market. The subsequent invasion of U.S.-produced rice began a new cycle of foreign “intervention” in Haiti, similar to previous involvement elsewhere in Latin America, was made possible by such U.S. firms as the United Fruit Company (now known as Chiquita Brands International). Only this time, the increasingly ubiquitous foreign presence in Haiti began to push too far, all but guaranteeing the continued deterioration of domestic rice products and the poverty to which it was linked.

Why the rice market?

Rice is the basic food staple in Haiti. It has been a well known fact for years that the majority of Haitians work substantially hard in order to eat one hot meal a day, which is almost always a bowl of white rice. Haitians have been cultivating rice in mass quantities for domestic consumption as well as for export since independence in 1806. Nearly two centuries of rice cultivation shows that Haiti was self-sufficient in its rice supply up until 1980. However, following a severe flood in the 1970’s that drastically reduced the island’s yield, U.S. companies began to send shipments of rice to the island, soon using their subsidized crop to undersell local farmers.

The next major development affecting the Haitian rice market took place after February 7, 1986 when President Jean-Claude “Baby Doc” Duvalier was ousted from power following a coup d’état. Shortly thereafter, General Henri Namphy took over control of the country. Once in power, the U.S. government coaxed his regime to liberalize Haiti’s economy by slashing import tariffs, closing state-owned industries, reducing the budget of the government agricultural agency in the Artibonite Valley (the primary region where rice is grown), and opening all of its ports to commercial activity.

General Namphy’s policy essentially sought the continuation of a favorable and less protective business environment, including no customs taxes, tariffs, quotas, low minimum wages, and the suppression of labor unions in order for U.S. business interests to take hold in Haiti. “Papa Doc” Duvalier’s dictatorial regime first introduced the outlines of this policy, which was carried to fruition under “Baby Doc” Duvalier. Then, under the Namphy regime, hopes to continue the policy expanded to the total opening of almost all of the Haitian markets.

As a result of these measures, cheap American rice, or “Miami rice,” was shipped from Floridian ports, and began to flood Haiti’s market. Outraged local farmers organized noisy protests beginning in December 1987, blocking highways and ports. Nevertheless, massive contraband and rice smuggling operations continued to undermine local rice production, which began to dwindle rapidly. In 1987 alone, in the first year of lowered tariffs on rice imports, Haiti was still meeting all of its rice demand, which by the end of that year had shrunk by a quarter, to 75%. By 1990, the same year President Aristide was democratically elected president, domestic rice production met only 66% of the population’s needs. This meant that even while farmers grew 195 mega tons (MT) of rice that year, 100 MT of cheaper, subsidized rice was also being imported.

In 1991, the Aristide government met with a coalition of approximately 50 farmers’ associations and unions to discuss ways to preserve the Haitian-produced portion of the rice market. During these talks, the Haitian government proposed buying all Haitian-grown rice in order to stabilize the price and to limit imports during periods between harvests. Naturally, this plan did not fare well. In separate negotiations with Haiti, the International Monetary Fund (IMF) had made it clear to Port-au-Prince that it opposed such “non-free market” policies. As a result, the tariff on imported rice was gradually cut by 50% in the 1990’s. Not surprisingly, food aid donations – such as corn meal, beans, soy, and oil – further drove food prices down in the late 1980’s through to the early 1990’s. This continued to wreak havoc on local rice production, making domestic rice increasingly expensive to grow and difficult to compete against cheaper rice from the U.S.

Efforts by Aristide in the early 1990s to raise the daily minimum earnings of Haitian laborers were also thwarted. In efforts to reform minimum wage, the Haitian President Aristide failed to raise the earnings for laborers to even a mere 25 gourdes a day, the then equivalent of approximately $3. Unsurprisingly, Aristide’s reform flopped, as he was unable to muster up sufficient political clout to counter USAID as well as conservative trade and opposition groups within Haiti that robustly blocked the initiative. According to a report by the National Labor Committee, such reform was strongly opposed by USAID, because it had invested millions of dollars in Haiti to keep wages low (thereby preserving the island’s comparative advantage).

Erly Industries Enters the Picture

Erly Industries Inc. is a powerful international agribusiness company comprised of three principal subsidiaries: American Rice Inc., Chemonics International – Consulting, and Chemonics Industries – and Fire-Trol. American Rice is and has been Erly Industries most profitable subsidiary, with an impressive geographic international reach, from the United States (and other countries in the western hemisphere), extending to Saudi Arabia and parts of Asia. Even before the end of Haitian economic protectionist measures, Erly Industries was already poised to land in Haiti, carefully laying the groundwork for entering the market and developing industrial sites in the small francophone nation.

In 1991, Erly Industries realized its intentions to plant American rice into the soil of the Haitian economy following a coup d’état that replaced President Aristide with a military junta. The U.S. company established its Rice Corporation of Haiti (RCH) to take advantage of the economic opportunity presented by the coup, by signing a nine-year contract in December 1992 with the illegal Haitian government under interim Prime Minister Marc Bazin. The contract with the RCH promised the importation of at least 5.5MT of rice per month. Additionally, Bazin promised to help improve rice production in the Artibonite Valley with the help of American agronomists. Unfortunately, Haitian small farmers continued to accumulate debt due to unequal competition with subsidized or donated food-aid commodities, while at the same time failing to receive any state support whatsoever. Consequently, rice imports continued to increase, reaching 140 MTs in 1994 while domestic production only grew by 4 MTs of rice.

By the mid-nineties, it was no secret that, for American companies, rice exports to Haiti meant commercial success. In 1994, Erly Industries’ rice sales in Haiti were $373 million. Tariffs protecting locally grown rice were cut back to the current level of 3% in 1995 (its lowest level to date), officially allowing U.S. Rice to sell for 30-50% less than local rice. Comparatively, the Caribbean Community’s (CARICOM) Common External Tariff on rice in 1999 was 25%, indicating the grossly favorable terms available to U.S. agro-industry (in addition to Haiti, CARICOM member states include: Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, Saint Lucia, St. Kitts and Nevis, St. Vincent and the Grenadines, Suriname, and Trinidad and Tobago). By 2003, approximately 80% of all rice consumed in Haiti was imported from the United States.

Unfortunately, even good intentions from outsiders are open to manipulation. As officials in NGOs stationed in Haiti have reported, some Haitian women who received funds supposedly to finance micro-financing programs were, in fact, buying cheap “Miami rice” and selling it in their own respective communities, further debilitating the efforts of local rice farmers. Adding to the latter’s gloom, efforts by the United Nations’ World Food Program have been impeded by constant theft and crime that have cut supply lines. The looted U.N. supplies often end up being sold on the black market.

How have environmental problems affected the Haitian rice market?

Deleterious agrarian techniques employed by Haitian farmers also compounded the island’s rice controversy. In the past 20 years, the population of Haiti has exploded by three million people, resulting in the implementation of intensive agricultural techniques by Haitian farmers in order to compensate for the rapidly increasing population on this island. This unsustainable form of cultivation led to serious environmental degradation in agrarian areas across the island. These damaging agricultural practices have substantially increased levels of soil erosion, decreasing the overall productivity as well as acreage of arable land. Startling proof is found in a 1988 report, cited by Paul Farmer in his classic The Uses of Haiti: Haitian soil could only produce .90 units of rice per hectare. In comparison, the report found that the Dominican Republic, its sole neighboring state on the island, could produce 2.67 units per hectare, whereas, Mexico and the U.S. yield 3.28 and 5.04 respectively.

Furthermore, as Haiti experiences explosive population growth, forested land has been cleared to facilitate increasing agricultural and timber production. According to the World Bank’s latest figures, only 2% of the island’s original forest cover remains in Haiti. Coupled with decreased rainfall and increased mineral mining (mostly for bauxite), such agricultural practices have had a deeply ruinous impact on Haiti’s environment.

The ramifications of environmental damage on Haiti’s industrial infrastructure have also been severe. Over two-thirds of Haiti’s labor force engages in agricultural activity or are dependent upon agricultural demand; in comparison, 20% of the Brazilian labor force is devoted to agriculture and in the United States, this figure is reduced to a mere 1% (according to the most recent CIA World Factbook statistics). The collapse of the Haitian agricultural sector, beginning in the late 1980’s, has perpetuated an exodus from rural areas to more crowded urban centers. However, few prospects, in terms of jobs, were available at the time these migrants moved to the cities, and now virtually none exist for the largely unskilled workforce. Before the earthquake on January 12, life in the cities was in many ways more difficult than in the countryside. As a byproduct of economic liberalization, some foreign investment managed to trickle into Haiti. This investment was minimal and focused not only on building up Haiti but converting its cities into small-scale manufacturing bases. Moreover, American clothing companies set up sweatshops in trade zones in Haiti where workers were paid an average wage of $.30 per hour. In January 2004 a 110-pound sack of American rice sold for $22.50, which would require 75 hours of labor, yet by May 2004, the price went up to $45, meaning that a Haitian sweatshop worker would have to work 150 hours just to acquire one sack of rice.

Paradoxically, Haiti is now the least restrictive country in the Caribbean, yet it has remained the poorest. Why?

The poor island state has been plagued by political corruption and endemic military coups since its independence in 1806. Furthermore, Haiti has never seen strong consolidated state support for farming, much less any type of regulatory agency. Land reform laws have long been necessary, but have never been awarded political priority. A 1980’s Inter-American Development Bank study found that 63% of Haitian landowners in the Artibonite Valley have plots measuring .01-.25 hectares, covering only 18% of the available land. This means that a minority of the landowners (37%) own 82% of the land in the Artibonite Valley. Since then, these figures most likely have become even more skewed, as massive urban migrations and buyouts of small farmers have continued relentlessly ensue.

Finally, Haiti has always suffered from a serious deficit of quality infrastructure. This has been further compounded by the small island state’s unfortunate tendency to get hit by natural disasters, such as the recent January 12 earthquake, reoccurring hurricanes, and floods that have destroyed major thoroughfares and vital communications technologies (most basically, the island’s telephone lines). For instance, in 1998, Hurricane Georges is estimated to have destroyed about 80% of Haiti’s total crop yield. Additionally, the 2008 hurricane season alone wiped out about 70% of Haiti’s crops, while causing over $1 billion in structural damages.

The January 12 earthquake, in particular, also highlighted one of the main problems in the USAID’s restructuring of the Haitian economy: housing. The majority of the casualties resulting from the earthquake were poor Haitians, who were forced out of the countryside in the mid to late 1980s, and, unable to find suitable living accommodations in the urban centers, had resorted to living in hillside shantytowns. As no provisions since then, have been made to provide housing for these displaced groups of people, they were forced to live in dangerous areas. Now, in the wake of a serious natural disaster, with over 230,000 mortalities, Haiti’s productive capacity has been significantly lowered, thus triggering yet another round of aid from USAID.

Unfair competition between Haitian farmers and U.S. agro-industry has also perpetuated Haiti’s chronic inability to experience economic growth. U.S. rice production is subsidized through a variety of mechanisms, allowing for it to be sold at unnaturally low prices. Furthermore, American farmers can expect greater yields and profits due to their crops having been subsidized and benefiting from mechanization, easier access to capital, sophisticated irrigation and fertilization technology, grain storage in large silos (facilitating the storage of rice until price levels are favorable), and the ability to cultivate multiple varieties of rice (Haiti only grows two types of rice; mountain and swamp rice). In recent years, Haitian farmers have had to specialize in certain categories of rice production in order to survive. Frequently, farmers have chosen to cultivate indigenous varieties of swamp rice, as it tends to be more nutritious than imported American rice, and therefore, is able to attract a better market price.

A third reason why Haiti has remained the poorest country in the western hemisphere is due to governmental corruption. Such corruption in Haiti has had a heavy impact on domestic protection against unfair business practices used by American and other foreign companies. The Haitian government fined American Rice Co. a penalty of $1.4 million after it allegedly evaded customs duties and smuggled rice into the country over a period of several years. The charges, which were filed in March 2000, led to investigations that uncovered startling revelations. American Rice, after losing a portion of its market share due to rice smuggling, decided to follow suit and begin to smuggle its own rice into Haiti. It lined the pockets of Haitian government officials to ensure that less than the actual tonnage would be declared upon arrival in Port-au-Prince, resulting in a significantly lower cumulative import tax.

As part of an appalling wave of reprisals for the charges, the then-President of American Rice, Douglas Murphy, along with American Rice’s then-Washington lobbyist, Lawrence Theriot, took the case to Chairman Jesse Helms (R-NC) of the Senate Foreign Relations Committee. After hearing from the lobbyists that the left-leaning government of Haiti was harassing legitimate U.S. owned businesses, Helms, a rabid extremist at the time, was persuaded to get involved due to his detestation of Aristide. The rightwing senator adopted Theriot’s cause and ordered more than $30 million in U.S. aid programs to Haiti to be frozen and denied high-ranking Haitian government officials, including the Haitian finance minister, visas to enter the United States.

In December 2004, the case against The America Rice Co. went to trial , in the United States District Court of Southern Texas, which found Kay (then Vice President of American Rice’s Caribbean operations), Murphy, and Theriot guilty of engaging in corrupt foreign practices. Kay and Murphy were fined $187,000 each, with a fine of $11,000 being levied against lobbyist Theriot.

The IMF and the World Bank did not play any part in fostering or sustaining corrupt practices in Haiti; rather, these two lending institutions pragmatically negotiated and treated the dictator, “Baby Doc” Duvalier, the island’s infamous “President for Life,” as a credible political figure before he fled the country in 1986.

The Blame Game

In an interview with COHA, a former Foreign Service Officer (and something of an apologist for Duvalier), who served in the U.S. embassy in Port-au-Prince between 1986-1988, observed that, “It’s not fair to just blame Miami rice in general, but certainly they [American corporations] were self-interested [in going after a portion of the Haitian rice market].” The former U.S. official found that, “They [Haitian government planners] should have made a huge investment in agricultural infrastructure,” with the development money and loans offered by the United States, World Bank, and IMF officials. But what exactly happened to that funding?

From 1987 to 1991, the World Bank, through its International Development Association agency, “disbursed” $142 million in Haiti for projects designed to support fiscal and trade reforms, projects for basic health services (including prevention and treatment programs for HIV/AIDS and TB), water supply, power services, transport infrastructure, social funds, economic funds, and industrial restructuring and development.

In fact, the impact of these funds was negligible, as found by an independent evaluation of World Bank assistance to Haiti (1986-2001) in March 2002. According to that institution’s website, “The report argued in favor of a future focus on building institutions, strengthening economic governance and working with local communities.”
In another COHA interview with an official who had worked for the Inter-American Development Bank (IDB) in Haiti, the source noted that the IDB also had donated development funds to Haiti. During the late 1980s and early 1990s, the official clarified that the goal of foreign organizations was to rapidly liberalize trade in Haiti, which included switching the agricultural sector away from subsistence farming and into cultivation of value-added crops (such as tomatoes or the production of essential oils used in perfumes). The problem, he ruefully acknowledged, was that the Haitian government’s transition program and aid to small farmers were not sufficiently effective. The Haitian government used development funds to improve the irrigation canals, with the hopes of increasing productivity and agricultural yields. Yet, with the massive flood of imported goods and the almost-constant influx of food donations, the market’s prices for food commodities remained low, making even the improved irrigation system a relatively minor consolation.

Aid in Haiti

“Haitian farmers are some of the most politically disempowered, malnourished, and illiterate people of the world. It is not surprising, then, that they are consistently viewed by others as victims in need of rescue or social problems in need of reform.”-Jennie M. Smith from When the Hands are Many
As the first black, free republic, Haiti was “persistently subjugated” by foreign powers, such as the United States and European countries, dating back to its creation. Jennie M. Smith, an expert on Haiti, notes in her book, “Thus challenged by the very existence of this nation-state of former slaves, European and North American leaders sought to isolate Haiti both politically and economically. A decades-long multilateral blockade…virtually guaranteed the country’s economic ruin.” Echoing the sentiment of who is to blame for Haiti’s current status, Smith argues that the mission descriptions of the hundreds of aid organizations working in Haiti began to add language about Haitian participation in the distribution of aid as well as in the development process, beginning in the early 1990s. But she also describes these as “rhetorical changes” as they have had little effect over how the bulk of the aid was actually being distributed.

Much of the funding allotted to Haiti by the international community was contingent on the Haitian government’s willingness to accept and abide by certain onerous terms. For instance, the international community pledged aid in 1994 only if Haiti accepted an Emergency Economic Recovery Plan (EERP). The international sponsors included the IMF, the World Bank, and several Western governments who, as part of the EERP consortium, called for the “implementation of a strict structural adjustment program (SAP). Such SAPs involved government downsizing, privatization of state enterprises, trade liberalization, the maintenance of low wages, and financial deregulation” – in other words, the neoliberal de rigueur package.

The elements comprising the SAP seem counterintuitive, but ostensibly they are instituted in order to help a country compete on the global market. However, for a poor country like Haiti that has only miniscule industry, no real export products, and consequently no comparative advantage, why would any foreign country or institution stipulate aid to Haiti on the basis of complete trade liberalization, maintenance of low wages, and financial deregulation? The IMF’s counter-arguments to such positions traditionally have been that protectionist policies do not foster “free market” practices, the latter of which are needed, according to the developed world, to spur economic growth. Nonetheless, by equalizing trade barriers between Haiti and rich, developed countries that seek to sell their subsidized agricultural products (highlighted by the agrarian-nature of the Haitian economy), these policies then don’t necessarily make much sense on the part of the affected economy.

Former President Aristide angrily cried out against the “trap” of the superficial democratic procedures, such as rushed or “free elections,” also forced upon Haiti as stipulations for receiving aid in 1987, following the flight of “Baby Doc” Duvalier. As quoted by Paul Farmer, Aristide lamented:

Only if we elected a government would the cold country to our north, and its allies- other former colonizers- send us more money and food. Of course, that money and that food corrupt our society: the money helps to maintain an armed force against the people; the food helps to ruin our national economy; and both money and food keep Haiti in a situation of dependence on the former colonizers.

Other third parties have voiced their concern about such practices. Michael Dobbs, of the Washington Post Foreign Service, wrote in April 2001:
The plight of Haitian rice farmers provides a human dimension to the debate over the costs and benefits of globalization as Washington gears up for protests to coincide with the annual meetings of the International Monetary Fund and the World Bank. Organizers of this weekend’s demonstrations have cited the rice growers’ struggle for survival as a prime example of the failure of free-market policies advocated by the IMF, with the strong backing of the United States.

Dobbs continued by calling into question the palpable hypocrisy of IMF policy, especially due to the pressure it exerted on Haiti to open up its borders to subsidized rice without allowing Haiti to subsidize its own crop. In response to IMF criticism, Dobbs cited a statement put forth by the former IMF mission chief to Haiti, Patricia Brenner, “It is naïve to suggest that the IMF has had a dominant role in the development of Haiti.” Brenner suggests that placing the blame on the IMF would ignore other contributing factors, such as political instability and corruption. Her critics suggest, though, that her apology for the IMF is as much to be applied to her own agency as to the regime’s lending bank. Despite the IMF’s assertions to the contrary, the debt and debt-servicing payments represent serious obstacles for the Haitian government to overcome. Haiti spent more last year servicing its debt than it spent on agriculture or tourism. Some critics argue that the United States and several of the colonial powers owe an obligation to Haiti for the legacies of economic exploitation, occupation and support for dictators, and particularly for the ill-effects of climate change, all of which continue to contribute to the sad state of the nation today. While the debt that the developed world owes Haiti might not be quantifiable, the debt-servicing costs imposed upon the country by the IMF and other lending institutions certainly can be seen as hindering its development efforts.

Moving up to March 10, 2010, former President Bill Clinton, in a meeting with the Senate Foreign Relations Committee stated, “It [Haitian trade policies that cut tariffs on imported U.S. rice] may have been good for some of my farmers in Arkansas, but it has not worked. It was a mistake.” He further lamented his persistent championing of such trade policies, “I had to live everyday with the consequences of the loss of capacity to produce a rice crop in Haiti to feed those people because of what I did; nobody else.” Though generous with his mea culpa, at the end of the day, he went on with his life while Haiti had to pay the price of Clinton’s benighted policy towards President Aristide as well as the economic prejudice he fostered on the island.

Effects on Civic Society

As in most cases, Haiti reluctantly accepted the collateral terms mandated by the development community in order to obtain foreign assistance, but its economic situation failed to improve. Although Haiti, in the last moments of the Jean-Claude Duvalier regime, was the world’s ninth largest assembler of goods for U.S. consumption (mainly garments), the U.S.-prodded “industrialization of Haiti” did little to prevent the further decline of the Haitian economy. In fact, starting in the mid-1990’s, the economy entered a recession, hitting a low point in 1995 (United Nations Education Programme data shows that GDP per capita in 1995, at $1,500, was lower than that the 1980 figure of $1,570).

The ramifications of a worsening economy dampened society’s fervor for politics. Smith documents that many Haitian women expressed a lack of interest with voting as the economic situation failed to improve, despite repeated efforts stemming from all sorts of economic assistance programs. “Aristide’s hands have been tied by the international community,” the women commented to Smith, further elaborating on the possibly of another contributing reason why the Haitian economy has failed to improve. This is attributable to the role of the Haitian business elite. The women argued that the Haitian commercial interests felt threatened by Aristide’s populist rule and decided to stockpile staple goods in order to “drive up prices and foment discontent with the government, and, as a consequence, disinterest in the democratic process.”

What’s Next: The Future of Aid, Development, and Democratization Efforts

As the former IDB official previously noted, the mistakes made in the strategy applied in Haiti should be carefully examined in order to avoid making the same errors in the future in similarly geopolitically- assessed countries. NGO’s must first recognize the harm they are doing by making funding available only to those countries that apply similar free market policies. Recognizing the harm these free market policies can do to fledgling industries, and how these policies can expose workers to foreign exploitation without any type of protection, is the first step toward reform.

The second step would be to promote good governance in Haiti, including the following measures: increasing governmental transparency, launching anti-corruption campaigns, and lowering barriers to education. Additionally, Haitian authorities should dedicate themselves to creating regulatory agencies with enough teeth to monitor the progress of such initiatives and enforce or adjust them as needed. Among the desired outcomes derived from the enactment of the aforementioned policies would be the forging of an environment conducive to phased and appropriate foreign and domestic investment, especially in infrastructure to replace the recent structural and communications damages resulting from the January 12 earthquake.

A final step would be to work with Haitian specialists to build a sustainable economy on the island. As Laurie Richardson, a Grassroots International Research Associate, documented in her exposition (published in 1997) on hunger in Haiti, the Haitian government and community organizations repeatedly have stated that revitalizing agricultural production is a top priority. Organizations, such as USAID, should divert more of their assistance toward agricultural investment as well as work in earnest with Haitian farmers in order to achieve this goal. As an urgent priority of the first order, Haitian agriculture should be protected with measures such as an increase in the import tariffs on agricultural produce.

Conclusions: What has doomed Haiti to endemic poverty?

Did 19th century trade embargoes and historic discrimination emanating from the United States and other European nations doom Haitians to an eternally bleak future? Or, is the culprit the post-World War II aid agencies and long-range development policies launched by public and private development programs that, at times, had their own countries’ native interests in mind, rather than Haiti’s?

A number of variables have adversely affected Haiti’s latent development. Is there any one factor at most to blame? The results of this investigation indicate that, in Haiti, there have been many potentially destructive variables and few positive constants, making the singling out of any one particular factor, or a group of them, a difficult task to undertake; however, out of the many factors attributed to Haiti’s stagnant development, it is undeniable that American rice imports, and the political clout mobilized by agroindustries and their vulture lobbyists, played a big part. Taken together, they single-handedly accelerated the decline of the Haitian economy.

In the end, what happened to the rice farmers in Haiti is tragic as it ushered in an increased dependency of the island on developed countries in order to compensate for its all but failed economy. The implicit hope here is that these countries, from which Haiti imports its food, will always be able to supply food in ever-increasing quantities as Haiti’s population inexorably increases.

The effect of American rice imports upon Haiti’s economy was compounded by the vestiges of failed foreign aid initiatives, craven political manipulations, and widespread governmental corruption and ineffectiveness. In addition to the political and economic setbacks, reoccurring natural disasters that periodically plague Haiti and predictably result in much lowered crop yields and severe structural damages. All of these factors have facilitated the establishment of an environment that has raised questions regarding Haiti’s ability to survive, or at least whether or not it will be able to restructure itself at a sufficient pace to slide out of the vicious cycle of poverty and a cruel nature that gives the island scant grounds for optimism in any direction.

Leah Chavla is a Council of Hemispheric Affairs Research Associate. This article was first published there and may be viewed at http://www.coha.org/haiti-research-file-neoliberalism%E2%80%99s-heavy-hand-on-haiti%E2%80%99s-vulnerable-agricultural-economy-the-american-rice-scandal/