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The role of international financial institutions in the destabilization of Haiti

Here's part of the recipe for destabilization and devastation which was applied to Haiti, concentrating on the role played by the IMF and other international financial institutions as willing accomplices to the exploitation of the nation at the hands of international capital and to the political destabilization accomplished through economic siege.

  1. Destroy any hope of self-sufficiency by forcing Structural Adjustment Programs on Haiti which predicate loans on the facilitation of foreign trade and investment. Some call it "liberalization", but a better term might be "pillage".
  2. Count on convenient military coup to overthrow populist reformer Aristide overwhelmingly elected to the presidency, who might challenge IMF "wisdom".
  3. Have this deposed president reinstated, suitably chastised and constrained to follow IMF dictates on trade policy.
  4. After the SAP's have been implemented with all their disastrous consequences, pull the rug out from under Haiti by withholding hundreds of millions of dollars of promised funds because the Bush administration claims that Aristide's government is in power because of voting irregularities.
  5. Have another coup, securing an even friendlier climate for business and capital.

Perhaps the above sounds a little oversimplified. If you want the details to make your own judgement on the antidemocratic and callous activities of the IMF/WB in Haiti , here's the whole story in excerpts from other media, independent and otherwise:

Haiti? The IMF? By Stan Goff , 19 April 2000
Still the press continues to give superficial and distorted accounts of Haiti that leave the impression of general Haitian deviancy, corruption, and ineptitude. It seems they should look more closely at the long-standing relationship between the most specifically deviant, corrupt, and inept leaders in Haiti past and present, and note how often these very people were underwritten by the US State Department and the CIA.

So what does all this have to do with the International Monetary Fund and World Bank? And why should the United States establishment be so dead set against Aristide?

The International Monetary Find and the World Bank are dominated by the United States, and the dominant stakeholders in those institutions are American finance capitalists. In simple terms, the IMF and the World Bank have much in common with loan sharks. They do not come to countries' rescue. They hold out loans to desperate countries to restructure their debts, and take on more debt-which they can ill afford-in exchange for acceptance of draconian adjustments to economic structures that are beneficial only to a small local elite who are working with transnational corporations (TNCs). These are called structural adjustment programs (SAPs). Their purpose is to pry developing economies open for domination by the TNCs and international speculators.

That's what all the hoopla was about in Washington DC April 16th.

These SAPs are the lowering of tariffs, which in Haiti means subsidized foreign goods run local producers out of their own market; suppression of labor unions, which in Haiti means people continuing to work for $3 a day in sweatshops; privatization of state owned enterprises, which in Haiti means transferring the proceeds to a private foreign corporation instead of into social services and infrastructure; downsizing of the public sector, which in Haiti would mean around 45,000 additional jobs lost in a country with over 70 percent unemployment; imposition of taxes on basic commodities, which in Haiti is the continuation of a regressive tax system that has let the rich off the hook and will further immiserate the poor; and the cancellation of what few social services still exist there.

What's the US objection to Aristide?

He might not support this sterling program.

The vast majority of Haitians already object to it, but that doesn't fit with Uncle Sam's notion of manageable democracy. Their fear is not that Haiti will fail in the absence of structural adjustment. The fear is that they will progress. That's a very bad example. It's Haiti being independent again, and it won't be tolerated.

In Haiti By Michael Dobbs Washington Post Foreign Service Thursday, April 13, 2000 ; A01
The plight of Haitian rice farmers provides a human dimension to the debate over the costs and benefits of globalization as Washington gears up for protests to coincide with the annual meetings of the International Monetary Fund and World Bank. Organizers of this weekend's demonstrations have cited the rice growers' struggle for survival as a prime example of the failure of free-market policies advocated by the IMF with the strong backing of the United States.

"The IMF forced Haiti to open its market to imported, highly subsidized U.S. rice at the same time it prohibited Haiti from subsidizing its own farmers," declares the Web site of Global Exchange, one of the Third World advocacy groups organizing the Washington protests. "Haitian farmers have been forced off their land to seek work in sweatshops, and people are poorer than ever."

Over the past two decades, a period of growing IMF tutelage over the Haitian economy, exports of American rice to Haiti have grown from virtually zero to more than 200,000 tons a year, making the poverty-stricken country of 7 million people the fourth-largest market for American rice in the world after Japan, Mexico and Canada. According to U.S. and Haitian economists, the result has been a massive shift in local consumption habits, with many Haitians now choosing cheap imported rice at the expense of domestically grown staples, including rice, corn and millet.


As a leading rice grower in Haiti's fertile Artibonite valley, Charles Suffrard has a vivid memory of what happened after 1986 when the country began opening its markets to foreign imports at the behest of the IMF and other international lenders. Jean-Claude Duvalier, the son of Haiti's longtime dictator, Francois "Papa Doc" Duvalier, had just fled the country for a gilded exile in France, to be replaced by the first of several military leaders supported by Haitian business interests.

"American rice invaded the country," he recalled. "It was sold for so little that we could not compete. There was a very serious struggle. When they brought the [American] rice up from Port-au-Prince, they had to escort it in military convoys, to prevent us from seizing it. By 1987 and 1988, there was so much rice coming into the country that many of us stopped working the land."

Although the IMF was not directly involved in sending cheap American rice to Haiti, its policies accelerated the breakdown of the old subsistence economy, and its replacement by a cash economy. Through a series of structural adjustment programs, beginning in the late 1980s, the IMF encouraged Haiti to adopt some of the lowest tariffs in the Caribbean. The IMF's influence was magnified by its role as the gatekeeper to funds from other international organizations, including the World Bank and the European Union.

Haiti: proof of hypocrisy Charlotte Denny Thursday April 11, 2002
Under the dictates of the World Bank and IMF, Haiti began a programme of rapid trade liberalisation in the 1980s. The import tariff on rice, the staple crop of Haiti's largely rural population, was cut from 50% to 3%, opening the country to a flood of cheap US imports.

At the beginning of 1990, the country was nearly self-sufficient in rice. By the end of the decade, production had halved and subsidised imports from the US accounted for more than half the local rice sales.

Oxfam says that while the urban population has benefited from cheaper food, the results have been devastating for the farmers. More than half the Haitian children are malnourished and 80% of the rural population lives below the poverty line.

"In many ways it is Haiti which stands out as the star pupil of the IMF and World Bank," the report says.

"The poorest country on the UN rankings of human development, in 1986 it joined the super league of trade liberalisers.

"The transition has had appalling consequences for poor people, but the country is still praised by the World Bank as a strong reformer."

The Destabilization of Haiti by Michel Chossudovsky
The IMF's Bitter "Economic Medicine"

The IMF and the World Bank are key players in the process of economic and political destabilization. While carried out under the auspices of an intergovernmental body, the IMF reforms tend to support US strategic and foreign policy objectives.

Based on the so-called "Washington consensus", IMF austerity and restructuring measures through their devastating impacts, often contribute to triggering social and ethnic strife. IMF reforms have often precipitated the downfall of elected governments. In extreme cases of economic and social dislocation, the IMF's bitter economic medicine has contributed to the destabilization of entire countries, as occurred in Somalia, Rwanda and Yugoslavia. (See Michel Chossudovsky, The globalization of Poverty and the New World Order, Second Edition, 2003, http://globalresearch.ca/globaloutlook/GofP.html )

The IMF program is a consistent instrument of economic dislocation. The IMF's reforms contribute to reshaping and downsizing State institutions through drastic austerity measures. The latter are implemented alongside other forms of intervention and political interference, including CIA covert activities in support of rebel paramilitary groups and opposition political parties.

Moreover, so-called "Emergency Recovery" and "Post-conflict" reforms are often introduced under IMF guidance, in the wake of a civil war, a regime change or "a national emergency".

In Haiti, the IMF sponsored "free market" reforms have been carried out consistently since the Duvalier era. They have been applied in several stages since the first election of president Aristide in 1990.

The 1991 military coup, which took place 8 months following Jean Bertrand Aristide's accession to the presidency, was in part intended to reverse the government's progressive reforms and reinstate the neoliberal policy agenda of the Duvalier era.

A former World Bank official Mr. Marc Bazin was appointed Prime minister by the Military Junta in June 1992. In fact, it was the US State Department which sought his appointment.

Bazin had a track record of working for the "Washington consensus." In 1983, he had been appointed Finance Minister under the Duvalier regime, In fact he had been recommended to the Finance portfolio by the IMF: "President-for-Life Jean-Claude Duvalier had agreed to the appointment of an IMF nominee, former World Bank official Marc Bazin, as Minister of Finance". (Mining Annual Review, June, 1983). Bazin, who was considered Washington's "favorite", later ran against Aristide in the 1990 presidential elections.

Bazin, was called in by the Military Junta in 1992 to form a so-called "consensus government". It is worth noting that it was precisely during Bazin's term in office as Prime Minister that the political massacres and extra judicial killings by the CIA supported FRAPH death squadrons were unleashed, leading to the killing of more than 4000 civilians. Some 300,000 people became internal refugees, "thousands more fled across the border to the Dominican Republic, and more than 60,000 took to the high seas" (Statement of Dina Paul Parks, Executive Director, National Coalition for Haitian Rights, Committee on Senate Judiciary, US Senate, Washington DC, 1 October 2002). Meanwhile, the CIA had launched a smear campaign representing Aristide as "mentally unstable" (Boston Globe, 21 Sept 1994).

U.S.-Sponsored Regime Change in Haiti By Nirit Ben-Ari and Bill Weinberg, World War 3 Report
This overthrow had been in the making since December 1990, when Haiti's first free election was held. The winning candidate, with two-thirds majority, was the populist priest Aristide, backed by a vigorous grassroots movement known as Lavalas. But seven months later, Aristide's government was overthrown in a military coup. No government on earth recognized the military junta, but as Noam Chomsky noted: "Washington maintained close intelligence and military ties with the new rulers while undermining the embargo called by the Organization of American States, even authorizing illegal shipments of oil to the regime and its wealthy supporters."

In July 1993, Aristide was made to sign the Governor's Island Accord, a US-backed "peace accord" with the illegal military junta that terrorized Haiti for three years. The Accord forbade Aristide from running for re-election once he was restored to power, and gave amnesty to the death-squad terrorists of the junta. The junta then refused to abide by the accord, prompting President Clinton to send in troops in September 1994.

Aristide finished his term, although conditions imposed on him as the cost of returning to power ? such as an IMF-style "free market" reform of the economy ? eroded his popularity. But Aristide continued to stand up to the IMF and international creditors, demanding a better deal that would not impose yet harsher austerity on Haiti, the poorest country in the western hemisphere.

In 1995 Rene Preval, a close friend of Aristide, was elected as president. His government faced serious political deadlock, and in 1999 Preval declared that Parliament's term had expired and began ruling by decree.

The last elections took place in November 2000. Aristide won his second non-consecutive term ? amid allegations of irregularities by the US and the opposition. Marc Bazin, a former World Bank official backed by the White House, won only 14 percent of the votes. To the dismay of Washington, Aristide was president again.

The US and international donors blocked financial aid, alleging the elections were "flawed." Aristide, in need of funds to implement his social plans for the country, was immobilized. Only in July 2003, the Inter-American Development Bank resumed loan programs.

Why they had to crush Aristide Peter Hallward Tuesday March 2, 2004
One of the reasons why Aristide has been consistently vilified in the press is that the Reuters and AP wire services, on which most coverage depends, rely on local media, which are all owned by Aristide's opponents. Another, more important, reason for the vilification is that Aristide never learned to pander unreservedly to foreign commercial interests. He reluctantly accepted a series of severe IMF structural adjustment plans, to the dismay of the working poor, but he refused to acquiesce in the indiscriminate privatisation of state resources, and stuck to his guns over wages, education and health.

Regime Change in Haiti: A Coup By Any Other Name Mark Weisbrot
The Bush administration had already called for Aristide to resign. But the Administration has been working on toppling Aristide for the past three years, plunging the country into chaos in the process.

The major international financial institutions (IFI's) -- including the IMF, World Bank and the Inter-American Development Bank, supported the administration's destabilization efforts by cutting off hundreds of millions of dollars in credit to one of the most desperately poor countries in the world.

The pretext was a dispute over the election of seven senators of Aristide's party in 2001. Aristide offered every possible solution but it didn't matter. With Washington and the IFI's backing them, the opposition refused any agreement short of Aristide's resignation. This put the IFI's in the role of starving Haiti until its elected president resigned.

This was a terrible crime, for which these institutions should be called to account, and added greatly to the misery and suffering of the Haitian people.

World Bank considers Haiti reconstruction meeting Reuters, 03.02.04, 5:59 PM ET
WASHINGTON (Reuters) - The World Bank said Tuesday it hoped to head a donor meeting soon to examine emergency and reconstruction needs for Haiti, but longer-term support would need commitments from a new Haitian government.

The informal meeting would focus on urgent social and economic support for the troubled Caribbean country and gauge donor feelings since the fall of President Jean-Bertrand Aristide at the weekend, officials said.


World Bank data show overall aid fell to about $136 million in 2002 from $600 million in l995, the bulk funneled through nongovernmental groups. Haitians living in the United States and Canada sent some $800 million a year to family in Haiti.

A crumbling economy and government commitment to reforms brought institutions like the International Monetary Fund and Inter-American Development Bank back to Haiti last year.

Haiti is $40 million in arrears with the World Bank, but officials said the bank had been in talks with Aristide's government on an economic program to strengthen the management of public resources, increase budget transparency and boost support for social programs.

homepage: homepage: http://ftaaimc.org/or/2004/03/3817.shtml

pictures sometimes say more 04.Mar.2004 14:44


check out this recent editorial cartoon by Pat Oliphant