Kicking Away the Ladder in Haiti

Source:  TeleSUR
By: Joe Emersberger

In addition to US-led coups and economic sanctions, the destruction of local agriculture is a huge part of Haiti’s economic disaster since 1980.

haitians fleeAn overtly bigoted writer was recently given space in the New York Times op-ed pages to advocate his version of what the U.S. government has been imposing on Haitians for several decades – basically a sweatshop model of development.

Haitians are told to use extremely low wages to attract foreign investors to make as many products for export as they can. It has been done already and anybody who is interested can check the results. By 1985, under the U.S.-backed dictator Jean Claude Duvalier, Haiti became the ninth largest assembler of goods for the U.S. market. [1] Figure 1 shows that Haiti’s real GDP per capita declined throughout the 1980s. The golden age of the Haitian sweatshop model was a miserable failure – at least for the vast majority of Haitians. [2]

haiti real gdp per capita

Source: IMF

Figure 1 calls out eight key points in Haiti’s economic history.

In addition to U.S.-led coups and economic sanctions, the destruction of local agriculture (points 1,2 and 5) is a huge part of the story of Haiti’s economic disaster since 1980. In 1980, 79 percent of Haitians lived in rural areas. About 43 percent still do today. Ruined farmers poured into the cities and exerted downward pressure on wages. The mass exodus also created huge urban shantytowns where people are vulnerable to earthquakes and floods.

Anyone interested in economic development should study Ha-Joon Chang’s concise and very readable “Kicking Away the Ladder: Development Strategy in Historical Perspective.” Chang shows that when the USA was a developing country during the 19th century it used tariffs that averaged 40 percent to protect against rivals who were only 30 percent more productive. U.S. agriculture must be at least ten times (or 900 percent) more productive than Haiti’s which exposes the malevolence of forcing Haiti’s tariffs down from triple digit levels in the 1980s to single digit levels by the 1990s.[4] The World Bank doesn’t list agricultural productivity values for Haiti but does for neighboring states that are not as poor as Haiti. See Table 3 below.

table 3

Source: World Bank

In 1994, the U.S. government made agricultural tariff reductions and privatization of state-owned companies key conditions Aristide had to accept before it ordered a military junta to resign that had murdered about 5,000 Haitians and driven hundreds of thousands into hiding. Aristide signed an agreement in Paris that said he would be allowed to use subsidies to offset the impact of the tariff reductions but was threatened with sanctions when he tried to do so.

The junta had, effectively, already slashed the tariffs in exchange for bribes. [3] Aristide also angered the U.S. when he disbanded the Haitian military and dragged his feet on privatization. When Aristide was elected again in 2000, the USA imposed economic sanctions which, with the assistance of France and Canada, became increasingly harsh by the time U.S. troops overthrew Aristide in 2004. Figure 2 illustrates the impact of the aid embargo on Aristide’s government. It shows Haiti’s government expenditures per person (adjusted for inflation) since 1997. The values are in Haiti’s national currency, the gourde. As of today 500 gourdes is equivalent to about US$11.

figure 2

Values in Figure 2 are calculated from IMF data provided here.

Notice the way government expenditures finally began to increase after U.S. troops ousted Aristide and economic sanctions ended. Figure 3 shows that Haiti’s GDP per capital has yet to return to the level achieved in 1999.

figure 3

Source: IMF

Today’s rich countries developed through the strategic use of protectionism that built their domestic markets. In fact, they still make ample use of protectionist policies and massive state subsidies on behalf of privileged sectors, but they ruthlessly bully the most vulnerable countries to prevent them from doing the same. Democratic reform is required in Haiti, but also (crucially) in rich countries like the USA and Canada, if economic policies are ever to be implemented that pull the Haitian majority out of poverty. We need to understand how our governments deliberately impoverish Haitians.

Notes:

[1] See Paul Farmer’s “Uses of Haiti” , 3rdedition, pg 99, 291;

[2] A reasonable objection to Figure 1 is that GDP per capita can be a very misleading measure of economic progress. Table 1 shows child mortality rates for Cuba and Haiti since 1970. Table 2 shows rates of change in child mortality. Countries should be able to achieve the fastest rates of reduction when child mortality is high – when the causes of death are easiest to address (basic access to nutrition and sanitation as opposed to treatment for rare congenital diseases). Cuba’s rates of reduction declined as child mortality was driven to the very low levels seen in rich countries. It Haiti, the opposite took place. The 1970-1990 period had slower rates of reduction than the post-1990 period, so the Golden Age of Haitian Sweatshops is also exposed as a disaster if we use child mortality to evaluate it.

table 1

Source: UNICEF

table 2

[3] See Jeb Sprague’s “Paramilitarism and the Assault on Democracy in Haiti”, page 77; Also “To Help Haiti, Start with Rice”, Lawrence Theriot, NYT op-ed, Oct 17, 1994

[4] Ha-Joon Chang, “Kickin Away the Ladder” page 67,68;

Another way to compare productivity between countries is to compare GDP per capita using PPP (Purchasing Power Parity). The USA is about 31 times (or 3000 percent) more productive than Haiti according to IMF data.

Source: Kicking Away the Ladder in Haiti

2 thoughts on “Kicking Away the Ladder in Haiti

  1. Pingback: Haitians keep fighting against oppression and poverty | Dear Kitty. Some blog

  2. To truly achieve development in Haiti, the first act of the Haitian people will necessarily have to be either the election of a government or the popular overthrow of the present corrupt and puppet government which unwaveringly serves the interests of the local oligarchy and imperialism.

    The tactic of the ballot or the bullet as Kwame Ture or Stokely Carmichael once said is not a choice of an embattled people but rather the choice made by the oppressor classes.

    However, whatever the tactic of the Haitian people to establish a government committed to development and their interests as opposed to those political and economic interests that have kept Haitians poor, it is indispensable for Haiti and its people to abandon the path of underdevelopment that the country has been on for virtually since its independence in 1804. The brief respite of Aristide interrupted by two coups initiated by the US and French governments is in contemporary Haiti an exception.

    The first act to achieve development has to be political because in its absence there will be no government (ie policy makers) who will use the human, natural and capital resources in the country to create the industries and agricultural production that require adopting protectionist policies such as tariffs and non-tariff barriers or NTBs such as import quotas, custom delays and exchange controls. These policies despite the talk of “free market economists” that they distort market prices, impose dead weight losses on economies and create inefficiencies are necessary to protect young or infantile industries from global competition from more matured and cost efficient entrenched businesses and even big corporations. There is just no way Haitian poultry farmers most of whom are small and medium sized farmers with little or no subsidies from the Haitian government can compete with giant corporations and agribusiness firms like Tyson’s and others with hundreds of millions and billions of dollars in subsidies from the federal government of the US. This it is no surprise that Haitian poultry farmers lost the “competition” to the bullies from up North who with the help of the WTO and Bill Clinton forced open the Haitian poultry and rice markets which in the process displaced perhaps tens of thousands of small farmers hurling them into Port-au-Prince to week out a non-existent living.

    As Ha-Joon Chang, a South Korean development economist ably shows in his wonderful book “Kicking Away the Ladder”, the present day industrialized nations like Britain, Germany, Switzerland, France and the USA were able to industrialize and develop precisely because they protected their domestic industries with high tariffs and NTBs. Indeed, they were staunchly opposed to “free trade” because they saw it as destructive or ruinous to their young embryonic industries which could not effectively compete with more cost effective nations. Thus for example, George Washington, a former slaveowner and the first president of the US was unhappy with the fact that the suite, tie and shoes he had to wear to his inaugural were products of British industry. Consequently, he ordered his Treasury Secretary, Alexander Hamilton to fix that situation so that no future US president would have to wear foreign suites to their inaugural. Hamilton, like Washington and the other so-called founders of America being the anti – colonialists and protectionists they were got to work in establishing the US clothing industry and other industries to make the US self-sufficient in some strategic industries with the use of tariffs and NTBs to protect them from the more matured and cost efficient industries that would simply have destroyed them. There was simply no competition between British and American industry at the time.

    However, hypocritically the US with the smiling face of President Obama and other western industrialized governments are denying to Haiti and other developing countries the use of the very same protectionist policies they used to develop their manufacturing, agricultural and other sectors in their now powerful economies. So now that they are strong and able to sell lots of their products below their unit costs, they are suddenly “free traders” wrecking tens of millions of lives like those of small Haitian rice and poultry farmers or small cotton farmers in Mali or Bokina Farso or milk farmers in Jamaica or small manufacturers in other countries.

    The fact is that had Haiti and the other countries mentioned here had truly sovereign governments, they would not have been signatories to the very onerous and one sided trade policies of the WTO that shackle the ability of these governments to take action against corporations that compromise their air, water and the health of their peoples. These industrialized nations led now by the US are simply driven by profits, markets and domination not by “free trade”and “efficiency” except perhaps where repressing wages are concerned. Indeed, Noam Chomsky, the well known American linguist who taught at MIT for nearly 60 years once said that America’s comparative cost would have made it a fishing nation had it developed on “free trade” principles. The recent bailout of the “banksters”on Wall Street is further evidence of the US’s commitment to “free trade.”

    In the light of the foregoing, Haiti and other developing countries around the globe will never achieve development until and unless they abandon the ” sweat shop model of development” that their local oligarchies and imperialism have designed for them as their role in the international economy. It is the sweat shop model of long hours of work and paltry wages that have led to the decking GDP Per capita, horrible infant mortality figures, increased poverty, child prostitution, hunger and the desperate attempts of people made by imperialism in Haiti and many other developing countries in Africa, Asia and elsewhere to risk their lives on the high seas to flee to America or Europe only to find out that heaven is only on earth for the rich and those who sell their souls to them.

    The struggle for another world therefor continues in Haiti, America and the world!

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