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A Note on the Economic History of Haiti

Economic stragulation of Haiti created legacy impacts still felt today

Economic stragulation of Haiti created legacy impacts still felt today

VictimsI have often wondered to myself precisely why Haiti has been an economic basket case for soooo long, unique among its prospering Caribbean neighbors and even to its island neighbor, the Dominican Republic. A foreign policy blog colleague, Sean Goforth, wrote a terrific piece recently, titled ‘The Bifurcation of Hispaniola,’ putting into perspective some – but not the primary – exigent factors that have impacted Haiti’s long stagnated development trajectory.  Similarly, ‘The Week’ magazine did an excellent piece last week that went even further in putting into context some of the historical and economic forces that have adversely impacted the once prosperous island nation. You can read more on that here.  And, of course, we’ve all heard wildly inaccurate reports about Haiti’s historical 1791 ‘pact with the devil’ at Bois Caimon – Pat Robertson’s comments notwithstanding. There are many rational reasons explaining precisely why Haiti is so poor, as The Week’s article and Sean Goforth amply show in their historical analysis. I think, then, we can safely dismiss the pact-with-the-devil theory as the root cause of Haiti’s anemic development.

More to the point, I was jarred when I received a dispatch , titled ‘The Hate and The Quake,’ about the sordid history of Western economic embargoes against Haiti from a professor of Caribbean history at the University of the West Indies, Sir Hilary Beckles forwarded to me from a friend, Yvette Roper, an energy infrastructure professional whom I’ve known since my first semester of college. Her e-mail about Beckles was edifying in shedding light on the unreported root cause underlying Haiti’s enduring economic dysfunction which I think many of my readers will find insightful.

L'ouverteur

L'ouverteur

In 1806, fearful that the Haitian Revolution (1804) might inspire enslaved Africans in other parts of the Western hemisphere to rebel, the U.S. Congress banned trade with Haiti, joining French, Spanish and Portuguese boycotts. Global shipping originating in or by Haiti was banned from trading with or entering American and European ports of trade. This coordinated embargo effectively crippled Haiti’s export-driven economy and its development as a once prosperous Caribbean port under French rule.  The embargo was renewed in 1807 and 1809, and in one form or another has lasted 197 years – with additional restrictions added in 1991 – until as recently as 2003.  The embargo was accompanied by a threat of re-colonization and re-enslavement by the American-European alliance if Haiti failed to compensate France for losses incurred when French plantation owners, as a result of the Haitian Revolution, lost Haiti’s lucrative sugar, coffee and tobacco fortunes supported by slave labor. [Dunkel, 1994] Haiti spent the next 111 years, until 1922, paying 70% of its national revenues in reparations to France – a ransom enforced by the American-European trade alliance as the price for Haiti’s independence.

As a direct consequence of this orchestrated, century-long economic strangulation, Haiti is, today, the poorest country in the Western Hemisphere by any measure:

Haiti’s debt was $302 million in 1980. In 1997 it was almost $1.1 billion, which is almost 40% of its Gross National Product. The value of its exports has fallen to 62% of 1987 levels. It should be listed as a severely indebted low-income country but the International Monetary Fund and the World Bank have refused to do so under the insistence of the North Atlantic alliance.

Thus began the systematic destruction of the Republic of Haiti. The French government bled the nation and rendered it a failed state. It was a merciless exploitation that was designed and guaranteed to collapse the Haitian economy and society. Haiti was forced to pay this sum until 1922 when the last installment was made. During the long 19th century, the payment to France amounted to up to 70 per cent of the country’s foreign exchange earnings.

More than 80% of the people in the countryside regularly don’t get enough to eat. Some 50% of the people are illiterate; 70% are unemployed; life expectancy for the average citizen of Haiti is 56 years and falling. Infant mortality is more than double the Latin American and Caribbean average. (Figures from PAPDA — the Haitian Platform to Advocate for an Alternative Development) Few people in Haiti have a reliable supply of food and clean water and those who do buy it by the jug, canned or packaged foods – imported from U.S. and French suppliers.

Trust U.S.

Trust U.S.

The well-intentioned interventions of the U.S. have both helped and hurt Haiti. In 1915 the U.S. invaded and occupied the country, fearing a growing German community and other European influences in the Caribbean – what the U.S considers its sphere of influence – in the lead-up to World War I. A period of stability followed, and by the time the U.S. pulled out in 1934, Haiti’s military was well trained, and a structure for elections was in place. But in 1957, François “Papa Doc” Duvalier was elected in an election rigged by the military, and Duvalier soon threw out any pretension of democracy, declaring himself chosen by God to be “president for life.” The U.S. tacitly supported him, seeing him as a preferable alternative to growing communist influences, which had taken hold in nearby Cuba. The despotic Duvalier regime was continued under his son, “Baby Doc,” until his forcible overthrow in 1986. Haiti was again thrown in disarray until the popularly supported, democratic election of  Jean-Bertran Aristide first in 1994, and again in 2000. And since the re-election of President Jean-Bertrand Aristide, a progressive Man of Faith, the United States in 2004, then under Bush, moved to sabotage Haiti’s fledgling democracy through an economic aid embargo, massive funding of elite opposition groups, support for paramilitary coup attempts, and a propaganda offensive against the Aristide government resulting in his exile.  Hidden from the headlines for years, this campaign eventually became an open effort to destroy a popularly elected, progressive government in favor of a Republican-friendly regime.  Below you can read an excerpt of that Executive Order issued by then President George W. Bush on 5 Nov 2004. In addition, as the AP report about the U.S. Haitian trade embargo I’ve attached above indicates, it was the U.S. government’s intent to weaken the already crippled Haitian government.

This executive order was the fourth major step taken by the United States under George Bush to impose rigorous sanctions and a crippling trade embargo on Haiti since the forcible exile of President Jean-Bertrand Aristide on October 1, 2004. On October 2, the United States suspended all direct assistance to Haiti. On October 3, the Administration blocked exports to the Haitian police and military. On 5 Nov 2004, President Bush signed an executive order to freeze the assets of the Haitian Government and to prohibit all financial transfers by an American citizen or company to the government in Haiti. Today’s action is an additional step to make it clear that the United States will have no normal trade or diplomatic relations with Haiti until the country elects someone we control and approve of, of course, in a “democratic” election.

‘…formalizing a comprehensive trade embargo on Haiti, effective November 5. The Administration is taking this additional step to comply with the resolutions of the OAS [Organization of American States] to tighten further the sanctions imposed on Haiti in the wake of the Aristide Government [a government controlled by the U.S.] earlier this month. The order applies to all commercial trade with Haiti, both exports and imports of goods and services. The only exception will be for humanitarian purposes: basic food staples, like wheat, sugar, rice, flour, cooking oil, and essential medicines. The OAS resolution, which called for a trade embargo, specifically made an exception for such humanitarian assistance.’

haiti-humanitarian-assistance2Except for humanitarian assistance…’ – legally required assistance under the existing Executive Order and the most recent embargo implemented by former president Bush – which brings us to the extraordinary efforts currently being coordinated by the U.S. government in the wake of the earthquake. It seems the more things change, the more they stay the same.  These orders are still in effect today, and subject to formalized foreign policies toward Haiti and enforced via the hemispheric Organization of American States (OAS), the European Union and the Inter-American Development Bank, with the continuing support of other European allies – including, importantly, France.

America further exerted its hemispheric control to the detriment of Haiti when then U.S. Secretary of State Colin Powell spoke at the Organization of American States meeting in Santiago, Chile in June 2003, warning that the OAS would re-evaluate its role in Haiti if the Aristide government did not conform to OAS resolutions about the organization of Haiti’s elections. This was also a warning to Latin American countries to follow U.S. policy on Haiti. Aristide was later overthrown (2004) and replaced by a provisional government until the 2006 elections installed the Republican-friendly Rene’ Preval regime.

More recently, the U.S. government added another embargo on loans to Haiti through the OAS, the Inter-American Development Bank and got the European Union, formerly another large donor to Haiti, to do the same. The United States took this action under President George W. Bush to undo the efforts of former President Bill Clinton who had sought, during his administration, to support the progressive Aristide regime and to re-integrate Haiti into world commerce. His effort on that front continues today.

Libérer l'Haïti!

Libérer l'Haïti!

Of course, I was incredulous in learning all this, but several hours in the Library of my alma mater and a few more on the internet researching long-standing pacts involving Haiti have borne out the facts. And they are indisputable: Haiti’s economic and development dysfunction, it turns out, has absolutely nothing to do with voodoo, nor incompetence, and everything to do with deliberate economic strangulation – that continues to this day – initiated by France, and later coordinated by the U.S and European allies to enforce democracy or to coerce economic sanctions and debt repayment over a period of 197 years – almost two centuries.  Haiti today cannot be understood outside the context of the legacy, and current, impacts of the tiny nation’s continuous string of trade embargoes, economic isolation, political dysfunction, and indebtedness induced and coordinated by Western allies from the nation’s inception following the Haitian Revolution, until today.

Sources: CIA World Fact Book, U.S. Department of State Archives, OAS Publications, Encyclopedia Britannica, A History of the Caribbean (), et al.

Image: Wikipedia, Haitian Revolution, 1791.

 

Author

Elison Elliott

Elison Elliott , a native of Belize, is a professional investment advisor for the Global Wealth and Invesment Management division of a major worldwide financial services firm. His experience in the global financial markets span over 18 years in both the public and private sectors. Elison is a graduate, cum laude, of the City College of New York (CUNY), and completed his Masters-level course requirements in the International Finance & Banking (IFB) program at Columbia University (SIPA). Elison lives in the northern suburbs of New York City. He is an avid student of sovereign risk, global economics and market trends, and enjoys writing, aviation, outdoor adventure, International travel, cultural exploration and world affairs.

Areas of Focus:
Market Trends; International Finance; Global Trade; Economics

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