The recent IMF-sparked fuel price crisis is just the latest example of wealthy nations and institutions pushing policies that worsen inequality.
July 21, 2018 Borrowed from Haitian-Truth.org
https://inequality.Global Struggles by Marie Clarke and Yolette Etienne With commentary by Haitian-Truth.org
It has been more than 200 years since Haiti was formed by the world’s most successful slave rebellion – a revolt that liberated a country from colonial powers and abolished slavery. Since that time, wealthy and powerful nations and their institutions – including the International Monetary Fund (IMF) and the Inter-American Development Bank (IDB) – have continued to put in place policies that have eroded Haitian democracy and undermined Haitian development.
This has taken many forms over the years, from backing coups against any democratic processes, to enslaving the country in debt, to dumping food and other goods after natural disasters and enacting policies that enable land grabbing and prioritize foreign corporate interests over those of the Haitian people. These practices have all but destroyed food security and domestic industries in Haiti.
The international community often expresses despair and exasperation over Haiti’s seemingly endless poverty and political instability that worsens with every devastating earthquake or hurricane but rarely notes the ways that it has undermined Haitian development and democracy.
The latest fuel crisis sparked by the IMF is a perfect example of misguided policy impositions that did not involve the participation of Haitians who will bear the impact of this decision nor recognize the fragility of the government which could be easily overturned as a result. The idea that removing fuel subsidies to help Haiti to reduce the deficit would hit the wealthiest Haitians the hardest was naïve at best and disingenuous at worst.
Fuel is needed not only for private vehicles but also for public transport. People in Haiti use fuel to transport food from farming communities across the country to markets and to power lamps for those that still do not have access to electricity because either their homes were never connected, or they were destroyed in the 2010 earthquake. Even in wealthy “developed” countries like the United States, it has been proven that rising fuel costs hit the poorest people the hardest and depresses economies.
In general, the government of Haiti finds it hard to push back against the international community and its institutions given its dependency on aid in the form of loans and grants. The Haitian people, and civil society organizations that represent them, could have easily pointed out the impact on people living in poverty of a sudden increase in the fuel prices which caused the price spikes, were they included.
The soaring prices sparked protests that shut the nation down and caused the government to fall. While the IMF has retreated to some extent, reversing the decision in the immediate term, they continue to press for a more gradual reduction in the subsidy and complicated voucher systems to help mitigate the impact on the poor. It is time for the IMF to listen to the Haitian people and stop promoting austerity measures as a means to address a growing debt and deficit crisis. Haiti has a long history of crushing international debt.
Shortly after the 2010 earthquake the major creditors including the IMF, World Bank, IDB and others cancelled of the vast majority of Haiti’s external debt – a debt Haitians saw as illegitimate. However, many of the benefits Haitians sought in its cancellation were not realized. Instead of channeling the debt cancellation into progressive spending on social services and reconstruction, the IMF used it to address the balance of payments, help absorb currency fluctuation and manage aid flows.
While some of those efforts has helped protect the poor, this cancellation and the action plan that followed has not enabled investment in social services and has been followed by a mix of loans and grants. Much of the international aid that was intended for reconstruction after the earthquake was diverted to projects like the Caracol Industrial Park, which displaced hundreds of farmers and their families from fertile land. U.S. and other foreign interests benefited from this deal, but up to now it fails to show any positive benefits for the Haitian people.
Today, Haiti struggles with debt and deficit once again. Like in times past, the big creditor nations and institutions seek to impose austerity measures as a solution. However, there is no indication that this strategy will be any more effective than it has been for Haiti in the past or than it has been for other nations around the world. The IMF’s own research confirms that austerity measures can be more harmful than the debt burden itself as it can increase inequality without fostering sustainable and inclusive growth.
Haiti is not alone. We see examples in other countries in Latin America of rising IMF collusion with governments to impose austerity programs in exchange for new loans and grants. Like in Haiti, these agreements are sparking instability and rebellion by the people most affected. We see these examples most recently in Argentina and Peru.
While the IMF formally left Nicaragua in 2016, it continues to visit the country and provide advice. This is another country where the government sought to reform social security, increase taxes and decrease benefits, a move that has been met with the largest and deadliest protests since the war. Although the Ortega government has reversed the decision, the protests have begun to demand his resignation. Governments across the Americas should take note of these examples – the people are clearly saying no to austerity programs, and when governments persist they risk their office.
What is needed now is to support the Haitian people in their endless fight for inclusion and participation and for their freedom to elect their leaders. Haitians will not surrender this fight, nor will the protests that began in early July end without change.
Haiti does not need a revolving door of neo-colonial masters. Instead Haiti needs solidarity to help the people build a stable democracy and policies that deliver a better life for its citizens. Activists around the world can help by standing in solidarity with Haiti. Donor countries and institutions can support with patient and lasting investments in the form of grants or decent loans targeted at the needs of the poorest Haitians.
Haitians know their needs and their context better than any outside force could possibly imagine. Haiti, as a sovereign nation, should be able to direct its own development agenda, in consultation with those most impacted by its public policies. Investments in the form of grants for public use can be a form of reparations for all of the ways that powerful nations and institutions have undermined Haiti in the past. Were Haiti to have the resources it needs to invest in its own people, and the ability to determine their leaders without threats from the U.S. or other nations, we might finally see Haiti realize its dreams of freedom and sovereignty.
Originally published by ActionAid USA.
Marie Clarke is Executive Director of ActionAid USA and Yolette Etienne is ActionAid Haiti Country Director.
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