In the years following the 1986 fall of Jean-Claude Duvalier, a popular movement developed which explicitly rejected the U.S. State Department’s neoliberal prescriptions for Haiti, popularly known at the time as the "American Plan for Haiti." This movement culminated in the 1990 election to the presidency of Jean-Bertrand Aristide, an anti-imperialist priest, on a platform of shoring up Haiti’s besieged state industries, farmers, teachers, and doctors. He also promised to raise wages and improve conditions for tens of thousands of super-exploited assembly workers, who toiled in sweatshops ringing the Port-au-Prince airport.

So it is ironic, 12 years later, to witness President Aristide, in his second administration, embracing neoliberal reforms and secretly negotiating to set up new cheap-labor "free trade zones," in which foreign capitalists will be even less constrained than in those set up by Duvalier 30 years ago.

As a part of a special series of programs on Haiti aired on WBAI in New York (see Haïti Progrès, Vol. 20, No. 14, 6/19/2002), Christian Lemoine of Rezo Solidarite, a Haitian support group, interviewed Camille Chalmers, a well-known Haitian economist and founding member of the Haitian Advocacy for an Alternative Development Program (PAPDA). Chalmers explains Haiti’s current neoliberal course and presents alternatives. We present here large extracts of that interview, which was translated from Creole by Lemoine.

Christian Lemoine: Can you give us an overview of the globalization agenda for Haiti?

Camille Chalmers: The globalization agenda for Haiti is not much different from the one which has been set for most underdeveloped countries. There’s a group of 50 or so countries around the world that have been classified as Less Advanced Countries. Those countries have been stagnant or undergoing negative economic growth for most of the past thirty years. They’ve become marginalized, and they’re paying a very high price in this globalization process.

In Haiti, this process has been accelerating since 1982. Since then, various plans such as the so-called "US Plan for Haiti" or the International Monetary Fund [IMF] Structural Adjustment Program or SAP, have been put into effect.

The reforms being called for are pretty much standard. First, monetary and financial liberalization, meaning a floating exchange rate for Haitian currency that is determined by market fluctuations. Then, the liberalization of foreign trade. That’s a very important aspect of these reforms. In Haiti, this has led to the flooding of local markets with cheaper imported goods, which has contributed to the demise of local production. This has created a dependency on imported foodstuffs. In the 1980s, Haiti used to import only 8% of the rice it consumed; nowadays from 60 to 68% of the rice is imported.

This trend of dependency on imported food is increasing. This means that small farmers have been run out of business, they’ve become unemployed. They’ve had to abandon their farms and migrate to the slums of Port-au-Prince, Haiti’s capital. This also means that more and more people are undernourished in Haiti. It’s estimated that 40% of the rural population suffers from malnutrition, while in the cities, there’s a 70% unemployment rate. These reforms have also damaged even the most dynamic sectors of the Haitian economy, such as the local rice production which had traditionally been a very resilient and productive sector of the economy.

In addition to financial and trade liberalization, fiscal reforms have been mandated to increase taxes and increase tax collections, particularly on the working poor. These reforms also include a substantial reduction in government financing of social welfare projects such as education and healthcare. As a case in point, Haiti is a world champion along with Zimbabwe, in the privatization of education: 82% of the education sector is in private hands.

These reforms also include a substantial reduction in the size of the government. In 1994 the International Monetary Fund asked the Haitian state to permanently layoff half the government employees.

These reforms also include deregulations of all kinds to facilitate foreign investment. Privatization of state enterprises is also mandated. This means, of course, that these state monopolies then get bought up by multinational concerns, which then run them for profit. Of the nine state enterprises which have been targeted for privatization, two have already been privatized, Ciment d’Haïti, the construction materials plant, and the Minoterie, the state flour mill. These privatizations have already had very negative results. While prices for these products have increased, there has been no improvement in their distribution. There’s been no improvement in providing access for the masses to these strategic goods.

This whole range of reforms is supposed to lead to a better integration of the Haitian economy into the world economy. But the underlying justification for these reforms, which mandate massive sacrifices, is a promise that they are supposed to lead to a rapid and sizeable influx of foreign investments to stimulate economic growth. However, the reality for Haiti and other countries in similar situations is that these massive investments have never materialized. For the most part, foreign investments have gone to so-called intermediary countries with established infrastructures such as Brazil, Venezuela, and Chili. These countries are in a much better position to receive these investments, and they also offer better returns and guarantees.

These reforms and structural adjustment policies which require massive sacrifices but which yield no benefits in return are just a fool’s trap. They’ve proved to be a total failure. It’s time for us to switch to a development policy which is based on a different logic and which is geared to the promotion of local markets and of local production. A development policy which takes advantage of the knowledge and skills of our small farmers in Haiti, and from there we’ll be able to stimulate export production.

CL: Can you give us an idea of how the privatizations have affected the various state enterprises such as [the state telephone company] TELECO, [the state electricity company] EDH, and [the state essential oils factory] ENAOL ?

CC: There are two kinds of privatization. There is an overt privatization, where, for example, the flour mill and the construction material company have been set up with mixed ownership. The Haitian state has retained a 30% share of the assets and the remaining 70% have been sold off to private investors led by multinationals.

But there is also a de facto privatization, where, for example, the phone company, although legally still a state monopoly, has opened up the telecommunications market to private companies, and these companies have a combined market share which exceeds that of the state-owned sector. RECTEL, HAITEL and COMCEL control 185,000 phone lines, whereas TELECO, the state run company, only controls about 100,000 lines.

The privatizations have taken place in extremely deplorable conditions. The state enterprises have been liquidated and sold off at far below market value. On top of that there are no provisions to ensure that public interests are going to be safeguarded. That’s extremely important because, whether we consider TELECO, the Minoterie, or Ciment d’Haïti, these are all enterprises of strategic importance to any development policy. If you are involved in any kind of construction project, the availability of cement is of crucial importance. Many roads, airports, bridges, sea ports, and infrastructure projects need to be built, and they will all need concrete. So, what you have today are enterprises which have a strategic development role to play and which instead are being run for profit by foreign interests.

This is in complete contradiction with the popular demands which emerged from the 1986 popular uprisings. These demands are that the state be engaged in providing for a comprehensive set of social services as part of a development program. The Haitian state is completely absent in education, healthcare, sanitation, or in developing the agricultural infrastructure. Clearly, without a substantial ability and commitment from the state to administer public services, it’s practically impossible to implement an economic and social development policy.

CL: What is the privatization bottom line in Haiti?

CC: The net effect of privatization so far, in general throughout Latin America, has been extremely negative. The most spectacular example of this is probably Argentina, where practically all the important state assets have been privatized. Argentina today is faced with a profound crisis, and it doesn’t have anything left to sell.

In general, privatizations allow multinationals to take control of an important part of a country’s national assets, while they never really contribute to market development or to the development of consumption, or to the county’s integration into the world economy.

In Haiti, this situation is even more critical. There’s never been any industrial development in Haiti to speak of. The Haitian state is a dwarf puppet state, and it doesn’t even take part in any of the essential development tasks. Privatizations are even more irresponsible in this situation. We won’t make a blanket statement in favor or against privatization. We think that an evaluation has to be made on a case by case basis. However, strategic enterprises should remain under state control, while others could be placed under mixed management, and others still could be completely privatized. This should be done as part of a development strategy which ought to prioritize public services.

So if we look at the privatization bottom line, we can see that the price of cement and concrete is very high, the price of bread is very high. On top of that, runaway inflation has reduced the buying power of minimum wage workers to practically nothing at all. These workers cannot even meet their daily needs. Since 1995 the minimum wage has been fixed at 36 gourdes per day, which today has practically no value at all, less than $1.50.

Neoliberal policies in Haiti have led to the elimination of all public services. The current policy should be to develop these public services through massive funding. This would provide a base for further economic development.

Every country needs a strong educational system in order to stimulate development. Today, final secondary school exams are being administered throughout Haiti. More than 40,000 students are taking these exams. So pretty soon, from 30 to 35,000 students will have graduated. Yet there are only 1,800 to 2,000 entrance spots available in the universities. So there will be about 33,000 students left with no opportunities whatsoever, with no way to continue their studies. Most often, the families of these students have had to make enormous sacrifices to put them through school, sometimes even depriving themselves of food and other necessities. And yet most will be stuck without any opportunity.

So the priority should be in developing public services and completely rebuilding the state, and modifying the relationship between the state and the population. We also need to deal with the massive poverty in Haiti. 82% of the population lives below the absolute poverty line, with revenues of less than $1 US a day. It’s completely irresponsible to promote privatization in these conditions. The priority in Haiti needs to be focused on the development of basic social services such as public health services and education. All this is completely foreign to the capitalist profit motive and even more alien to the pursuits of multinational corporations.

CL: What about the plan to develop Free Trade Zones along the Haitian-Dominican border?

CC: We’re in an extremely paradoxical situation in Haiti. The Aristide government has been implementing these Structural Adjustment Policies without even receiving any external financial incentives to do so. Generally speaking, most governments which are implementing these programs claim they are forced into this because they depend on financing from the IMF to meet their obligations. But it’s been almost two years since just about all the foreign aid to Haiti has been stopped, and the government still hasn’t changed its policies. It’s still implementing this structural adjustment program.

The Free Trade Zones are one of the most scandalous examples of these policies. The Dominican and Haitian governments are setting up a Free Trade Zone in Marie Bahoux, one of the most fertile regions of Haiti. This area has a productive capacity of 30,500 metric tons of food per year, enough to feed half a million people. When you are faced with such a massive food deficit as Haiti is faced with, how can you justify destroying fertile land to build concrete factories for the benefit of Dominican and US investors?

Luckily, the local population and local farmers have mobilized to oppose this plan. Solidarity groups on both sides of the border have launched an educational campaign to explain the consequences of this project to the local population. We, in PAPDA, have also joined in this campaign....

We have to take advantage of [the controversy around] the Marie Bahoux Free Trade Zone project to say that, in this very fertile region, how can use the skills of the local farmers to help this region develop its productive potential? How do we irrigate this vast area? How do we preserve the area’s water resources which are amongst the most important in all of Haiti? We all know how scarce and strategic a resource water has become in Haiti.

This Free Trade Zone project has been launched without any technical or environmental impact study, or any study aimed at developing the infrastructure along the border. This shows clearly how irresponsible these projects are, and how they were simply conceived just to please the Dominican government and to help Dominican investors circumvent trade regulations and quotas.

The current mobilization against this project can be very useful in pointing out how Haitian strategic interests are being sacrificed for the benefit of Dominican investors, under the pretext that this is the way of globalization and of economic development. We’ve already suffered from such disastrous experiments in Haiti. Not only in the Industrial Park in Port-au-Prince, in the early 70’s, but in the North East, where the Dauphin plantation was established to produce rope for the US. After having exploited and depleted the land for many years, these foreign corporations then left and left behind a desolated region. They’ve sucked out all the meat and left just the bones behind. The local farmers in the area have been left to face these deplorable conditions.

We need to take advantage of this situation in Marie Bahoux to raise questions of strategic importance to the Haitian economy, to promote choices which will truly help develop local resources and markets, and help local farmers achieve their productive potential. These farmers, despite the hardships they face, have become an important and sizeable exporter of goods across the Dominican border. So, rather than promote this Free Trade Zone which would eventually transform this entire area into a vast slum, we should instead be focusing on how to develop this area’s agricultural and tourism potential. This would not only benefit local farmers, but would also benefit the entire country as well.