The Multinational Monitor



AIDing and Abetting Mayhem

by Jim Ridgeway and Billy Treger

Haiti is, by far, the Western Hemisphere's poorest country. With a per capita gross domestic product of $218, it stands at the level of poor African and Asian nations, not poor Caribbean and Latin American ones. Similarly, on the United Nation's Human Development Index, a device designed to measure standards of living rather than just income, Haiti ranks at the bottom of the hemisphere, resting firmly in the misery levels of the world's worst-off countries.

The roots of Haiti's poverty run deep, to its colonial history, its 200-year dependence on the major Western industrial powers and its narrowly-based oligarchy. In the latter half of the twentieth century, the oligarchy has maintained its tight control of the economy with the sometimes implicit, sometimes explicit - but always crucial - support of the United States.

One of the most important manifestations of that support has been aid from the United States. Allocated for the overt purpose of eradicating Haiti's awful poverty, the aid has provided critical support for Haiti's elites [see "Subverting Democracy"] - but it also has played a critical role in directing the Haitian economy in line with U.S. multinational corporate interests.

Reinforcing the Status Quo

Over the last several decades, the United States has sent the bulk of international aid that has gone to Haiti, and most of that has been in the form of food for relief in hurricanes and other natural disasters, and for agricultural development. In Aiding Migration: The Impact of lnternational Development Assistance on Haiti, Josh DeWind, director of Latin American and Caribbean Studies at Hunter College, and David Kinley III, an information officer at the World Bank, chronicle the history of aid in Haiti. The Kennedy administration cut off aid in 1963 because of corruption and human rights abuses by Francois (Papa Doc) Duvalier. According to U.S. government estimates, as much as 80 percent of money earmarked for aid was used up in corruption and mismanagement. The United States did not restore aid until the inauguration of Jean-Claude (Baby Doc) Duvalier as president in 1972, and this was not because Duvalier had corrected human rights abuses or stopped the corruption, but because Henry Kissinger placed more emphasis on a web of international alliances than on any concern for human rights. By 1975, U.S. Agency for International Development (AID) monies to Haiti reached $59.3 million, and by the early 1980s, aid topped $100 million annually.

According to the World Bank, the total volume of international aid committed to Haiti from 1973 through 1981 was $477 million. Eighty percent of this support came from three sources: the U.S. government, the World Bank and the Inter-American Development Bank. Most of the U.S. aid went through AID to different departments of the Haitian government.

This aid was generally ineffective at eradicating or alleviating poverty. A 1982 report from the Government Accounting Office, the Congressional research agency, concluded, "The AID program to date has had limited impact on Haiti's dire poverty, and many projects have had less than satisfactory results."

The Haitian government did not carry out the AID projects, and, for its part, AID did nothing to promote change in the power structure, especially in the countryside where it would have been necessary for agriculture projects to have any beneficial effects. DeWind and Kinley note that "while AID's own analysts determined that land concentration had become a major problem in Haiti - with the top 30 percent of the landholders controlling over two thirds of the cultivable land - no programs to protect small holder land titles or to redistribute land were considered."

In 1981, Haiti came forward with its own ambitious plan for development, which was rejected by the World Bank and AID as vague and incomplete. Instead, the international donors, led by the World Bank, organized their own scheme which emphasized an export-led development strategy. The plan called for Haiti to emphasize its comparative advantages: a hard-working, low-cost labor force, a potential for diversified agriculture, close proximity to the U.S. market and a year-round climate favorable to farming. The World Bank proposed that Haiti concentrate on developing agribusiness and assembly work.

This set of proposals meant a dramatic structural change in the Haitian economy and society. The international donor plan required Haiti to abandon any pretext of achieving agricultural self sufficiency, and to instead concentrate on the growth of such crops as coffee and cacao on the hillsides, and fruits and vegetables on the plains for sale to winter markets in the United States or year-round agribusiness packaging. Overall, AID proposed to shift 30 percent of all cultivated land from production of food for local consumption to export crops. AID officials envisioned a population exodus from the countryside to the cities, in part because the new export-driven agriculture could not sustain so many people in the countryside, and in part because it was necessary to relieve pressure on the land that had led to ecological disaster. As a result, by the turn of the century, both AID and the World Bank predicted a doubling of the population of Port-au-Prince to 1.6 million, and a general increase in the urban population by 75 percent. This was all seen, according to All), as a "mechanism for moving large segments of the population out of poverty."

Haiti's own development plan called for no such shift in basic economic structure, but under pressure from the World Bank and the United States, the Duvalier government went along, and adopted the export strategy. At the same time, because of the Duvalier regime's corruption and in line with the Reagan administration's desire to privatize federal programs wherever possible, AID began to funnel substantial amounts of funds through private non-government organizations (NGOs) such as CARE, Church World Service and the Seventh Day Adventist World Service. (Aside from increasing the importance of this private aid network, the switch from corrupt Haitian governmental bureaus to private, mostly U.S. non -profits didn't seem to make much difference. The private NGOs were criticized by the press and the U.S. government for fraud, including the dumping of food into non-existent or "zombie" schools, leaving legitimate schools and nutrition centers with nothing.)

Swine Slaughter

The exodus from the countryside, so eagerly desired by the international banking and aid agencies, was not easily engineered. Living on tiny plots of land was a long-established way of life in Haiti, but the international agencies' program received an important boost due to a fortuitous epidemic of swine fever. In 1978, African swine fever was detected in the pigs of the Dominican Republic, and that caused the United States to launch an investigation of pigs in Haiti, some of whom were found to be infected with the disease, although the actual numbers appear to have been small and the Haitian pigs seemed to be resistant to the disease. At any rate, if African swine fever ever made its way to the United States, the University of Minnesota estimated it would wreak $150 million to S 5 billion worth of damage [see "Porkbarreling Pigs in Haiti," Multinational Monitor, December 1985 J.

Paul Farmer, a physician and anthropologist who has worked in Haiti for over a decade, describes the pig debacle in his book AIDS and Accuscction: Haiti and the Geography of Blame. In 1981, North American farm experts thought swine fever in Haiti might end up threatening the U.S. Pig business. They organized the African Swine Fever Eradication and Swine Industry Development Program (PEPPADEP), a S23 million program to kill all the pigs in Haiti and repopulate the country with pigs from the United States. There were 1.3 million pigs in Haiti, and they were an important part of the rural economy. "The peasant subsistence economy is the backbone of the nation, and the pigs were once the main components of that economy," Bernard Diederich wrote in the Caribbean Review in 1985. "With no banking system available to him, the peasant relied on hog production as a bank account to meet his most pressing obligations: baptism, health care, schooling, funerals, religious ceremonies and protection against urban-based loan sharks who would grab his land at the first opportunity."

The slaughter of the pigs began in May 1982 and ended a year later. By August 1984, Haiti was officially declared rid of African swine fever.

Together with U.S. AID and the Organization of American States, the Haitian government went to work replacing the pig herd, arranging for importation of pigs from Iowa. However, Farmer writes, "In order to receive Iowa pigs as a 'secondary multiplication center,' program participants were required to build pigsties to specifications and also demonstrate the availability of capital necessary to feed the pigs. This effectively eliminated the overwhelming majority of peasants."

The Iowa pigs did not take to Haiti. "The pigs looked little like the lowslung, black Creole pigs that had populated Haiti for centuries. Although the new pigs were very large, they were manifestly more fragile than their predecessors. They fell ill and required veterinary intervention: they turned their noses up at the garbage that had been the mainstay of the native pigs' diet. The kochon blan ('foreign pigs') fared well only on expensive wheat-based, vitamin-enriched feed- a commodity also sold by the government. Although public proclamations assured the people that the price of pig feed would be controlled, artificially created shortages soon led to a thriving parallel market that netted fortunes for a few of the Duvalier clique and its successors. The cost of feed each year for an adult pig ran between $120 and $250, depending on the black market."

Farmer goes onto describe how an effort to redistribute pigs ran into one problem after another. Efforts by Haitian community leaders to speed up the process by distributing the pigs communally brought charges of communism. Some pig owners accused neighbors of poisoning their animals. Pigs had unusually small litters, and the project just broke down. Even now, 10 years after the eradication, there are still efforts afoot to bring in foreign pigs that can adapt themselves to the Haitian setting.

The killing of the pigs was devastating. Luc Joseph is a resident of Kay, a settlement of refugee peasant farmers displaced over 30 years ago by Haiti's largest hydroelectric dam. He told Farmer that he viewed the slaughter of the pigs as "the very last thing left in the possible punishments that have afflicted us. We knew we couldn't have cows. We knew we couldn't have goats. We have resigned ourselves, because we at least had our pigs." Diederich, quoting an economist who put the nominal value of the pig herd at $600 million, argued, "the real loss to the peasant is incalculable ... [The peasant economy I is reeling from the impact of being without pigs. A whole way of life has been destroyed in this survival economy. This is the worst calamity to ever befall the peasant."

For some Haitians, the killing of the pigs was part of a larger U.S. development plan to push the peasants off their tiny subsistence farms into the cities where they could take jobs in the burgeoning U.S. -owned plants that assembled toys and clothing for the U.S. market. And whether one cares to accept this as part of a cynical plot, the pig fiasco fits in remarkably well with the overall redirection of the Haitian economy.

Export-Oriented Assembly Plants

As part of the redirection of aid, the Reagan Administration's Caribbean Basin initiative was intended to boost the production of goods in the region by offering free access to the U.S. market. U.S. AID helped to establish promotional offices in the Caribbean to lure investors to the region and concentrated on boosting assembly operations.

The results of this project are best chronicled in a report by the New York-based National Labor Committee. U.S. investment represents 90 percent of total foreign investment in Haiti, and 95 percent of the country's light manufacturing exports are destined for U.S. markets. Foreign companies pay no taxes in Haiti, and, as the U.S. Commerce Department rhapsodized in 1985, "Both foreign and Haitian businessmen share the same views on the environment for doing business in Haiti. All fully appreciate the low-cost labor and strong work ethic of the Haitian people."

Labor is indeed the key to the manufacturing sector that grew in Haiti in the 1980s, since all the clothes, electronics, toys and sporting goods the country exports are comprised of U.S.-made components and only assembled there. Labor is the only value added.

And it is added at very low cost. The legal minimum wage in Haiti is three Haitian dollars, or US$ 1.85 a day, 23 cents an hour. For a 45-hour work week, a worker would make 511.11. But workers told the National Labor Committee that they actually made the equivalent of $1.11 a day or 14 cents an hour.

Charles Kernaghan, the lead author of the National labor Committee study, reports meeting one factory worker and asking her how she made ends meet. "She said it cost her the U.S. equivalent of 44 cents a day for transportation to and from work She also spent about 30 cents for lunch. This meant .she went home at the end of a nine-hour day with the equivalcnt of 37 cents in her pocket."

These meager wages, meanwhile, have been falling in recent years. During the last decade, Haitian wages dropped by 56 percent while Haitian apparel exports to the U.S. doubled. With 70 percent of the work force unemployed, each assembly job must now feed from five to seven people. That comes out to 39 cents per person per week, or six cents a day.

At the Vetcx assembly plant, Kernaghan visited workers, mostly women, who assembled children clothing and women's underwear for export to the U.S. The women sew for Sears, and the factory assembles products for J.C. Penney and Wal Mart. "We watched the workers at the Vetex plants attaching Sears 'Kid Vantage' price tags to the children's clothing. The price for one child's outfit was $9.99. The label proudly advertised that it had been printed on recycled paper," he recounts.

The National Labor Committee report Continues, "When Aristide was elected president, he tried to raise the minimum wage to 37 cents an hour, or $2.94 a day, and sought to reform the corrupt national workers health and pension benefit agencies. It his plan had gone through, the real minimum wage would have gone up to about 50 cents an hour, still less than one-eleventh of the average U.S. apparel wage."

This was just too much for the Rush administration to take lying down, and the U.S. Agency for International Development was dispatched to fight back against Aristide. AID signed a k6 million contract with Stanford Research Institute (SEI) and Ernst & Young to rally the beleaguered Haitian business community. "The emphasis of the study team was placed on listening to business people, learning about their problems," according to the report the consultants sent back to U.S. AID,

The SRI/Ernst & Young report concluded that Aristide's proposed minimum wage increase "is generally not being very well received by the business community in Haiti. Many business leaders fear that the large minimum wage increase will lead to higher wage demands from semi-skilled and skilled workers, which will be beyond the companies' capacity to pay, given the high cost structure in Haiti for non-labor cost factors such as port charges, electricity, and telecommunications."

Concerned about a potential disruption of Haiti's "large pool of disciplined and competitively priced labor," U.S. AID allocated $26 million to an "ad hoc committee of business organizations" - under its control - to help keep "Haitian production competitive in world markets."

U.S. AID funneled the money to its Prominex promotional operation. U.S. AID had formed Prominex in 1986 to entice businesses to Haiti with the lure of cheap labor costs, but when top officials were accused of misappropriating $2 million, U.S, AID changed the operation's name to Probe, which stands for "Promotion of Business and Exports." The president, Andre Apaid, a well-to-do Haitian businessman, owns Industries Nationales Reunies, S.A., which assembles components used in U.S. government computers and Pentagon sonar and radar equipment.

At a December 1991 conference of 1000 business leaders in Miami, Apaid addressed a "Haiti Strategy Breakfast." Asked what he would do if Aristide returned home, Apaid said, "I'd strangle him." At that, the British ambassador to Haiti rose and left the gathering.

Apaid had beseeched the Bush administration to lift the trade embargo as the "best Christmas present yet" to Haitian workers. In February 1992, Bush did lift the embargo for U.S. companies assembling goods in or sourcing production from Haiti, and the administration granted import licenses to wealthy Haitian business families who are known to have supported or assisted in the coup.

Undercutting Production

There is little to indicate that the U.S. AID program has had any success in addressing Haiti's severe social problems. The environmental destruction of the country proceeds apace. The slums in Port-au-Prince are growing. The corrupt bureaus of the Duvalier government prospered from U.S. AID graft; today, it is the smiling representatives from the do-good religious outfits who have become docile handmaidens of U.S. AID. And, most importantly, the ability of the nation to produce food for its people has been undermined, and with the growing import of such staples as rice, domestic food production has declined.

According to Lisa McGowan of the Development GAP, the increase in food aid to Haiti has severely undercut local food production. Some Haitians may be getting fed, but the prospects for food security look dim. Rice production dropped 35 percent in 1991-1992; beans dropped 20 percent, roots and tubers 15 percent, and sorghum 10 percent.

One U.S. AID official claims that most of the food provided to Haitians through current relief programs does not compete with Haitian crops. "The vast majority of what we provide are commodities that are not grown in Haiti. They are commodities that are supplementary to the diet. They don't represent products that are grown in the countryside of Haiti."

U.S. AID says it is now feeding upwards of 700,000 Haitians per day. But this food encourages a shift in domestic consumption, undermining the efforts of Haitians to produce food for themselves.

McGowan says, "The export-led development model pushed by the World Bank, the IMF I International Monetary Fund I and U.S. AID actually pulled resources away from food production in Haiti. This model, combined with inflation caused by fiscal mismanagement of the de facto government and the breakdown of legitimate market channels, has made seeds, fertilizer and of other agricultural inputs so expensive and scarce that peasants can no longer afford them. This and the theft and destruction by the military and its associates of peasant assets, such as credit-union funds, food storage facilities, tree nurseries, tools, machinery and livestock - not to mention the ruthless repression of peasant leaders - continue to severely decapitalize and disrupt peasant agriculture. This is a disaster for a country where 70 percent of the population depend on agriculture for their livelihood,"

All in all, it is a pretty sorry story. But while U.S. policymakers and economists denounce Aristide's populist economics and argue that what Haiti needs is a dose of their economic formula, the reality is that it is precisely their prescription which has left the country in its present miserable state.

Jim Ridgeway is a columnist with the Village Voice. Billy Treger is a researcher with Essential Information.

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