The Larger Context of Haiti's Earthquake

by Patrick Clairzier, M.A., class of 2009

Professor in the undergraduate study abroad program at AGS

Posted February 8, 2010

On January 12, 2010, Haiti, the poorest country in the Western hemisphere, was hit by a devastating earthquake, which by some estimates may have killed close to 200,000 people once all the casualties are accounted for over the next few months. The magnitude of this devastation might have been reduced had it not been for the economic-quake that has been devastating the country for over 25 years. The country lacks the basic infrastructure such as roads, access to clean water, emergency response agencies, and other capabilities that Western governments have at their disposal to react to these sorts of disasters.  The question is, why does Haiti lack this basic but crucial infrastructure?  The answer lies in a bankrupt set of economic policies.

If Haiti is too fully recover we need to put the country’s current situation into a larger context.  This way, we can understand how it ended up in such a vulnerable state, and thus avoid repeating past mistakes. From the time of Haiti’s founding as a Spanish and then French colony, to the revolt of the African slaves who had been forced to work the plantations, to its declaration as a free country on January 1, 1804, Haiti’s economy has been deeply rooted in agriculture. Throughout the country’s history, an average of 70% to 80% of its people have made their living from agriculture and agricultural related industries such as processing and the transport of farming-related goods.

However, starting in 1980’s the international community, led by the United States (U.S), and international financial institutions (IFIs) such as the International Monetary Fund (IMF) and the World Bank, along with the support of the economic and political elites in Haiti, wanted to reduce the country’s economic dependence on agriculture.  Their goal was to industrialize Haiti by transforming it into an export-based economy. The basic argument of the IFIs and their supporters was that by converting Haiti’s economy to light manufacturing (mostly in apparels, handicrafts, and electronics), they would reduce the country’s dependence on basic agriculture.  They insisted that the large number of people whose livelihood depended on the agricultural sector would be neatly absorbed into the new export-driven economy, thus solving the unemployment problem that would naturally occur from such a transformation.  This was to be achieved via a narrow set of neoliberal policies that claimed to foster economic prosperity by liberalizing trade between countries.

Neoliberal policies are concerned with limiting the government’s involvement in the economy, which, it argues, stifles the benefits of the free market system. These policies were forced on Haiti during its notoriously corrupt Duvalier regime via structural adjustment loans.  By the time the Duvalier regime was removed from power by a popular uprising in 1986, it had saddled the country with a $900 million debt. The international community and IFIs had administered this debt to a government known for high levels of corruption.  Not only did this debt increase over the years, but its conditions required the country’s government to practice fiscal discipline through reducing or eliminating expenditures on social programs, privatizing all publically-owned enterprises, and removing tariffs on goods and services.

The problem with forcing a poor country like Haiti to take on these measures is that they ignore the fact that the Haitian government is a large source of employment for the people. There is also little tax collection capability and a high level of poverty.  Therefore, social services like education, healthcare, and infrastructure depend on the revenue from government-run businesses.

The privatization of these public firms has further concentrated the country’s wealth into fewer hands and has reduced the amount of funds available to the Haitian government—funds which it needs in order to operate on the most basic level for a developing country. Had these firms and industries not been privatized, the funds could have been used to build much-needed roads, hospitals, and schools, and to establish the disaster response capabilities that could have saved countless lives in the aftermath of the earthquake.

The first wave of economic liberalization in the 1980’s had a major impact on the Haitian rice market, with price competition from imports causing a 50% drop in prices between 1986 and 1987. Then in 1995, under pressure from the IMF and the U.S., Haiti reduced tariffs on rice imports from 35% to 3%.  This led to a 27% drop in local production and an increase in rice imports to 30 times the previous levels between 1985 and1999.[i] Moreover, this undermined the livelihoods of more than 50,000 rice-farming families and caused a rural exodus to the cities.  This decrease in local production was one of the major causes that led to 62% of the population suffering from malnutrition.[ii]

This rural exodus can be linked to the number of lives lost in the earthquake.  The United Nations Division of the Department of Economic and Social Affairs Population Division reported Haiti’s rural population annual growth rate as .73% between 1985-1990, and Haiti’s urban population annual growth rate as 6.21%. The population breakdown in 1985 was 4.9 million rural and 1.4 million urban. By 1990, the Haitian rural-to-urban population breakdown stood at 5.1 million-to-2 million respectively. These numbers have accelerated over the years with the estimated population breakdown for 2010 to be 5 million rural and 4.9 million urban, with Port au Prince remaining its largest city with a population of 2.2 million.[iii]

At issue here is that, according to the neoliberal policies imposed on the country, the millions of people who were displaced and who flooded the city of Port au Prince when the country’s agricultural economy was “transformed” should have been working in the new industrialized economy, providing ample tax revenue for government expenditure.  These potential tax revenues could have been used for needed infrastructure projects, but these policies failed.  In actuality, they have proven to be detrimental to the overall goals of the country.  There has been no corresponding growth in jobs and very little infrastructure improvements. The unfortunate side effect of these policies was to displace the rural population, forcing the people into cities like Port au Prince, which did not have the means to support such a large increase of residents. Over the years, the overwhelmingly poor population of Port au Prince has managed to carve out a living in a country with an estimated unemployment rate of up to 70%.[iv]

This brings us back to the devastating consequences of the neoliberal policies. Haiti could not have avoided the earthquake, but it could have been better prepared to deal with the aftermath. There are those who are quick to blame the victims of this tragedy, saying the Haitian people brought it upon themselves because they somehow did not work hard enough to improve their situation in life. Then there are those like Pat Robertson, the evangelical Christian minister, who suggested that the earthquake was God’s punishment on the Haitian people for making a pact with the devil.

The pact that Haiti made was not with the devil but with an international financing system that refuses to acknowledge the failure of its policies. Those that promote these policies are quick to blame the countries for not administering their plans properly, but one cannot argue that it is the fault of countries like Haiti for not succeeding in a competitive world market when one’s policies force them to remove trade barriers on imported agricultural products. At the same time, agricultural products in developed countries like the U.S. and European Union are heavily subsidized by their respective governments.  These subsidies provide an unfair price advantage to western firms when selling in the local markets of developing countries, thus local producers are crushed.  The supporters of economic liberalization like to talk about helping developing countries help themselves—or helping them “pull themselves up by their own economic bootstraps.” The only problem with their approach is that you can’t ask people to pull themselves up by their own bootstraps when you are standing on their backs.

[i] Oxfam International, 2005

[ii] Ibid

[iii] United Nations Division of the Department of Economic and Social Affairs

Population Division

[iv] USAID

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