January 14, 2005
The Dictatorship of Debt
The World Bank and Haiti
By YVES ENGLER
Last Thursday the World Bank announced it would release $73 million in cash to Haiti's government of Gerard Latortue that was installed by foreign powers after elected President Jean Bertrand Aristide was forced from office. For Haiti to get the World Bank cash it had to pay $52 million in outstanding arrears. Canada helped out by giving the regime a $12.7 million grant.
What's going on?
The Canadian government, like the US and the European Union, stopped providing aid to the Haitian government after accusations that the May 2000 elections were unfair. The basis for this claim was that in 10 multi-candidate contests where Lavalas gained a plurality rather than a majority of votes, according to the constitution they should have
faced a second round election. Instead Lavalas' "plurality winners" simply took their seats.
Objections were raised even though the same method was used in previous elections and it was public knowledge prior to the vote that this would happen again. So, while more than 3500 other positions were judged to have been filled fairly in the same election, the Organization of American States and the US claimed electoral fraud. The opposition used this claim to justify their boycott of presidential elections later that year and to say Aristide's victory was tainted, even though no one claimed the opposition had any chance of beating the popular former priest. The "tainted" election became the excuse to divert aid money from the government to opposition "civil society" groups.
Now, however, the Canadian government has no problem giving money to a Haitian regime without the remotest pretense of democratic legitimacy.
The World Bank money now going to Haiti is mostly loans. Haitians will have to
repay it even though Haitians didn't choose Latortue " the US, France and Canada did. Similarly, of the $1.2 billion in "aid" for Haiti announced at a Washington donors, conference in July, more than half is loans, which Haitians must repay.
While it's unclear how exactly all of the money on offer will be spent we do know that a number of North American companies have their eyes on the prize, so to speak. Montreal -based SNC Lavalin already has some contracts lined up. Most countries stipulate that the majority of their "aid" must be spent on domestic contractors. So Haitians will have to repay money sent to foreign companies.
A country as poor as Haiti--where there are no public schools, only intermittent electricity and little health infrastructure--should not be sending $40 million to the World Bank headquarters in Washington. But then again in 1825 Haiti never should have had to pay France $21 billion (in 2004 dollars) to compensate French slave-holders for their loss of property (now fre
e Haitians). This debt, paid under threat of invasion and exclusion from international commerce, took Haiti 120 years to repay.
According to the Haiti Support Group, "Haiti's debt to international financial institutions and foreign governments has grown from US$302 million in 1980 to US$1.134 billion today. About 40% of this debt stems from loans to the brutal Duvalier (Papa and Baby Doc) dictators who invested precious little of it in the country. This is known as odious debt, because it was used to oppress the people, and, according to international law, this debt need not be repaid."
As the 20th century began, foreign powers, especially Germany, France and the US, repeatedly sent gunboats into Haitian waters. The most common reason for the incursions was to press Haiti to pay debts it was unable to afford. In one instance, US marines secretly entered Port-au-Prince and took the national treasure. The 1915 US invasion/occupation of Haiti was partly about forcing the country to repay its debt.
While it would be a stretch to claim that the recent invasion of Haiti occurred simply to force the country to repay its debt, it isn't a total coincidence that Haiti, like the other "failed states" Yugoslavia and Iraq, has massive "obligations" to foreign bankers.
"Failed state" may in fact be a euphemism for a country's failure to subject itself above all else to the rights of international creditors. After all, gunboat diplomacy to enforce these rights has a long, inglorious history.
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