[stop-imf] Wash Post: IMF in Haiti (fwd)

[Robert Weissman]

In Haiti 

By Michael Dobbs
Washington Post Foreign Service
Thursday, April 13, 2000 ; A01 

PONT-SONDE, Haiti -- Last month, several dozen impoverished 
rice-growers and their families decided they could bear life 
in Haiti no longer. They pooled their meager savings, bought a 
rickety boat and headed northward to the British-administered 
Turks and Caicos Islands. Halfway into the 150-mile trip, the 
vessel capsized, killing all 60 on board.

 "We are mourning now, because we lost so many members of our 
families," said Emince Bernard, one of the villagers who 
remained behind, and who heard about the disaster on the 
radio. "But the same thing is going to happen over and over 
again, because the people here no longer have any hope."

 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 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.

 "The IMF forced Haiti to open its market to imported, highly 
subsidized U.S. rice at the same time it prohibited Haiti from 
subsidizing its own farmers," declares the Web site of Global 
Exchange, one of the Third World advocacy groups organizing 
the Washington protests. "Haitian farmers have been forced off 
their land to seek work in sweatshops, and people are poorer 
than ever."

 Over the past two decades, a period of growing IMF tutelage 
over the Haitian economy, exports of American rice to Haiti 
have grown from virtually zero to more than 200,000 tons a 
year, making the poverty-stricken country of 7 million people 
the fourth-largest market for American rice in the world after 
Japan, Mexico and Canada. According to U.S. and Haitian 
economists, the result has been a massive shift in local 
consumption habits, with many Haitians now choosing cheap 
imported rice at the expense of domestically grown staples, 
including rice, corn and millet.

 While IMF officials acknowledge that the transition to a 
market economy has caused wrenching social disruption for 
Haiti and other developing countries, they argue that it will 
prove beneficial in the long run, provided governments stay 
the course. Officials accuse their opponents of exaggerating 
the influence of lending organizations, oversimplifying and 
distorting the issues, and playing down systemic problems such 
as corruption, political instability and insecurity.

 "It is naive to suggest that the IMF has had a dominant role 
in the development of Haiti," argued Patricia Brenner, the 
IMF's mission chief to Haiti. She noted that Haiti had "an 
average of one government a year" in the 10 years following 
the collapse of the brutal Duvalier dictatorships. "The 
economic situation must be seen against the background of 
political chaos, military takeovers and governments being 
formed and replaced before they have time to establish a real 
economic program."

 From a grass-roots perspective in Haiti, the poorest country 
in the Western Hemisphere, it seems undeniable that millions 
of people have been left behind in the rush to globalization. 
That much is evident from the distended stomachs of children 
in villages like Pont-Sonde, the throngs of women seeking jobs 
at 30 cents an hour in sweatshops owned by U.S. clothing 
manufacturers and the daily street demonstrations through the 
slums of Port-au-Prince by laid-off government employees.

 According to the IMF's figures, roughly 50 percent of Haitian 
children younger than 5 suffer from malnutrition. Billions of 
dollars in international assistance have done little to 
improve conditions in the countryside, where two out of three 
Haitians live. Per capita income has dropped from around $600 
in 1980 to $369 today. 

 But the real question, say IMF supporters, is not whether a 
majority of Haitians are worse off than they were 15 or 20 
years ago, but whether there is a realist ic alternative to 
free-market policies. "Globalization is a fact, not a 
project," said Richard Coles, president of the Manufacturers' 
Association of Haiti. "The world has shown it works in a 
certain way. Why should we Haitians think we can invent the 
wheel all over again?"

 As a leading rice grower in Haiti's fertile Artibonite 
valley, Charles Suffrard has a vivid memory of what happened 
after 1986 when the country began opening its markets to 
foreign imports at the behest of the IMF and other 
international lenders. Jean-Claude Duvalier, the son of 
Haiti's longtime dictator, Francois "Papa Doc" Duvalier, had 
just fled the country for a gilded exile in France, to be 
replaced by the first of several military leaders supported by 
Haitian business interests.

 "American rice invaded the country," he recalled. "It was 
sold for so little that we could not compete. There was a very 
serious struggle. When they brought the [American] rice up 
from Port-au-Prince, they had to escort it in military 
convoys, to prevent us from seizing it. By 1987 and 1988, 
there was so much rice coming into the country that many of us 
stopped working the land."

 Although the IMF was not directly involved in sending cheap 
American rice to Haiti, its policies accelerated the breakdown 
of the old subsistence economy, and its replacement by a cash 
economy. Through a series of structural adjustment programs, 
beginning in the late 1980s, the IMF encouraged Haiti to adopt 
some of the lowest tariffs in the Caribbean. The IMF's 
influence was magnified by its role as the gatekeeper to funds 
from other international organizations, including the World 
Bank and the European Union.

 IMF officials insist that many Haitians, particularly those 
living in cities, have benefited from lower tariffs. Because 
of the influx of cheap American rice, food prices have 
remained fairly stable. Maintaining a relatively low inflation 
rate has been the IMF's main achievement in Haiti over the 
last few years.

 According to free market theory, nations should specialize in 
areas where they have a comparative economic advantage. Poor 
countries should be able to take advantage of the abundance of 
cheap labor to increase their exports of manufactured goods, 
as well as certain agricultural items like mangoes and coffee, 
to markets including the United States.

 But there is a gap between free-market theory and Haitian 
reality, as the rice conflict demonstrates. Development 
economists point out that the competition between Haitian and 
American rice growers was hardly fair, since U.S. rice 
production is subsidized through a wide variety of mechanisms. 
Furthermore, most of the American exports were handled by a 
single U.S. corporation--American Rice Inc.--which has enjoyed 
an almost monopolistic position in Haiti.

 The prospect of dynamic, export-driven growth seems distant, 
to say the least. Although wage levels are lower in Haiti than 
elsewhere in the Caribbean, manufacturers have been scared 
away by the unstable political climate. At present, there are 
only 25,000 jobs in the light-manufacturing sector, compared 
with a peak of 60,000 jobs prior to the 1991 military coup.

 At the Caribbean Apparel Factory on the northern outskirts of 
Port-au-Prince, women line up every day, desperately hoping to 
be hired to sew T-shirts for the American market. Home to 
several dozen American manufacturers, the industrial zone is 
virtually autonomous from the rest of the Haitian economy.

 "I come here every day in the hope that one day there will be 
work, but there never is," said Caroline Ezebeie, 33, who left 
her village as a teenager, lured by the promise of a better 
life in the city. "When I leave the house, my children hope 
that I will earn enough money to come back with food. But very 
often, I have to walk home because I don't have enough money 
for a bus."

 "We are waiting for our deaths," yelled someone else in the 
crowd. "We are starving. There is no work for us here."

 For the anti-IMF protesters and Third World advocates now 
gathering in Washington, the answer to Haiti's problems, and 
the problems of many other developing countries, resides in 
measures such as debt relief, land reform, small-scale 
projects specifically geared to the needs of the rural 
population and selective tariff protection for agriculture and 
fledgling industry.

 "You can't expect a country like Haiti to compete on world 
markets immediately," said Mark Weisbrot, co-director of the 
Center for Economic and Policy Research in Washington. "If you 
look at those countries that have succeeded in dramatically 
increasing their per capita incomes--countries like Japan, 
South Korea and Taiwan--you will find they all did it under 
some kind of protection."

 "This country is not Korea," retorted Eric Verreydt, the IMF 
representative in Port-au-Prince, pointing out that Haiti's 
greatest single economic advantage is its close proximity to 
the huge American market. "Haiti desperately needs investment, 
and the only people who are likely to invest here are 
foreigners and rich Haitians living in the United States. That 
is a fact of life."

 Since the reestablishment of democracy in 1995 following a 
U.S. military intervention, Haiti has been receiving around 
$125 million a year in international assistance, much of it 
contingent on an IMF seal of approval. But because of 
instability--the country has been without a parliament for the 
last year--IMF attention to Haiti has been sporadic. The last 
structural adjustment program petered out in 1997 because of a 
domestic political crisis following the disbursement of only 
$21 million of a planned $120 million loan. The IMF has since 
persuaded the government to implement an informal "staff" 
program, focusing on macroeconomic goals such as a balanced 
budget, tight monetary policies and low inflation. 

 Even left-wing Haitian politicians acknowledge that the 
country can hardly survive without the support of 
international lending organizations.

 "We don't take the position that we don't need the IMF and 
the World Bank, and that IMF policies are diabolical," said 
Yvon Neptune, a spokesman for former president Jean-Bertrand 
Aristide, who has described capitalism as "evil." "We are 
saying we want to sit down and negotiate with the IMF, and 
adjust their policies to the reality of Haiti."

 Attempts to promote alternative models of development in 
Haiti in recent years have run aground from political 
infighting, lack of funds and impracticality. A pilot land 
reform project in the Artibonite valley has failed to increase 
rice yields, and in some ways even made matters worse, leading 
to the breakup of relatively efficient farms and the decay of 
irrigation systems.

 Unable to produce enough rice to satisfy domestic demand, or 
even feed their own families, the rice growers of the 
Artibonite are close to despair, and caught in a seemingly 
unresolvable contradiction.

 "The introduction of American rice has hurt us terribly," 
said Claudes Derilus, a 29-year-old rice farmer in Pont-Sonde. 
"But if it wasn't for this rice, Haitians would die of hunger."