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Haiti: The corporate vultures circle


February 4, 2010 - Haitians’ incredible plight has always been difficult to fully appreciate. Then the earthquake struck: hundreds of thousands dead, hundreds of thousands more hurt, a million homeless and two million in need of food. It defies imagination. And according to a journalist just returned from Haiti, even the heart-rending footage we’ve seen here on television fails to "portray the magnitude of the tragedy that has happened – and the degree to which the Haitian people are suffering. When looking at images from the disaster", writes Steven Edwards, "we need to multiply by ten times our reaction of horror – only doing that can give you a true picture of what is going on in a place that has become hell not far from our shores...

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Haiti: The corporate vultures circle

By Regan Boychuk

February 4, 2010

-- Canada Haiti Action -- Haitians’ incredible plight has always been difficult to fully appreciate. Then the earthquake struck: hundreds of thousands dead, hundreds of thousands more hurt, a million homeless and two million in need of food. It defies imagination.

And according to a journalist just returned from Haiti, even the heart-rending footage we’ve seen here on television fails to "portray the magnitude of the tragedy that has happened – and the degree to which the Haitian people are suffering. When looking at images from the disaster", writes Steven Edwards, "we need to multiply by ten times our reaction of horror – only doing that can give you a true picture of what is going on in a place that has become hell not far from our shores."[i]

Many Canadians, like millions of others the world over, have been moved to make donations to help Haiti recover from this tragedy. Fundraisers have been organised across the country and tens of millions of dollars are pouring in. The mayors of Canada’s 22 biggest cities are organising to send municipal experts to Haiti to help rebuild roads, bridges and other infrastructure.[ii] Such solidarity and support is no doubt welcome, but there are also other, less altruistic efforts afoot.

The morning after the earthquake, when the Red Cross released its first estimates of as many as 50,000 dead, the Globe and Mail ran an editorial advising the international community to "rethink its efforts in Haiti". In particular, the editors of Canada’s leading newspaper agreed "a larger focus" on garment manufacturing in Haiti "could help the economy grow". In this, the editors concluded, "Wealthy neighbours like the U.S. and Canada have a special responsibility" and "Canada can play a leading role".[iii]

Such talk of sweatshops might seem more than a little garish the morning after such a disaster, but this was hardly the first time Haiti had been targeted for such "sweatshop development" and foreign players are obviously eager to turn the exponential increase in the bitterness of Haitian existence into profitable lemonade.

I.

The Duvalier dictatorships (1957-86) killed tens of thousands of Haitians, but they also opened Haiti up to do assembly work for foreign corporations in the late 1960s. The tyrants were swiftly rewarded with a ten-fold increase in international aid – most of which was stolen or otherwise misspent, but donors didn’t much care as long as their business interests were being attended to.

Haitian workers were "closely supervised and controlled by the government", which kept "wage rates at very low levels" – "undoubtedly … the single most important factor influencing the location of assembly industries in Haiti", according to economist Monique Garrity. Even the World Bank admitted the "assembly industry is largely outside the Haitian economy" and made "no fiscal contribution". During this experiment in sweatshop development between the 1970s and 1980s, absolute poverty in Haiti is estimated to have increased 60 per cent – from 50 to 80 per cent of the population.[iv]

While sweatshop development had profited foreign corporations and further impoverished Haitians, those that had allied themselves with foreign investors to exploit Haitian labour rose to new heights. In 1990, USAID described these "rapacious" new elites who’d "arisen to seize hold of the economy":

These entrepreneurs have a 19th century approach to making money and have moved in to take advantage of the country’s massive and cheap labor pool. They run sweatshops, pay starvation wages and oppose any effort to improve the lot of the average impoverished Haitian.

Similarly, in a memo to the first President Bush, the chair of the US Congressional Task Force on Haiti described the "powerful businessmen who control the commanding heights of the Haitian economy":

These personalities and their associates have been identified as being in the forefront of those financing thuggery and terror to intimidate the Haitian people and the democratic sector. …They fear that a freely elected government accountable to the Haitian people would intrude on their privileges and force them to compete in a world economy. Such a change would threaten their short-term interests and for this they have and continue to finance an apparatus of terror to block change.[v]

In the country’s first democratic election in December 1990, Haiti’s poor majority managed to elect a president to represent their interests. Within months, Haiti’s elite removed the country’s first democratically elected government in a US-backed coup. At the time of the coup, the government had been moving to guarantee the right to organise unions, to reform the labour courts, to increase the minimum wage, to restart and restructure the workers’ national health and benefits program, and to bar the military from intervening in workplace disputes. The National Labor Committee described the situation a year and a half after the coup:

The maquiladora sector had been 50-70 per cent organized. After the coup, the factories fired all the union-affiliated workers. Now companies pay whatever they want. It’s impossible to even talk about [improving] wages or working conditions. …Following the September 1991 coup, peasant organizers were hunted down like animals by the military.[vi]

Within months of the coup, US corporations with business interests in Haiti asked for and received exemptions from the embargo designed to bring down the military junta controlling Haiti. On February 4, 1992, President Bush I exempted US companies assembling goods in, or sourcing production in Haiti from the embargo. The US Treasury Department even handed out these licenses to companies controlled by well-known coup organisers. When the National Labor Committee asked one factory owner why he could not pay his workers enough to survive, he explained that, when the embargo was lifted, many US companies let it be known that they would continue contracting assembly work in Haiti only if their costs were lowered. His factory was paying its Haitian workers 27 cents an hour, a starvation wage. Other factories paid as little as nine. "There was a union before the coup", the same factory owner said, "but afterwards the repression was too great. The military was hunting them. They were afraid and fled Port-au-Prince. Now, we have no union."[vii]

Not only had sweatshop development pushed Haiti’s poor majority further into poverty, but it also gave birth to vicious and rapacious new elite that oversaw the murder of thousands of members of Haiti’s pro-democracy movement in the years after the 1991 coup.

When Haiti’s elected government was returned from exile in 1994, it was on condition that it adopt a variety of economic policies dictated by the West. In January 1995, the Haitian government announced a package of special incentives to attract foreign investment, which included subsidies for the rich and tax incentives for business. In April 1995, President Jean-Bertrand Aristide was set to propose new minimum wage of 75 gourdes per day, but under pressure from international donors, accepted a compromise of 36 gourdes (~$2.40 a day/30 cents an hour). According to the National Labor Committee’s investigation, the institutionalisation of the 36 gourdes/day wage meant minimum wage workers in Haiti had less buying power than they did before Aristide’s election in 1990 and almost 50 per cent less in real terms than when the Duvalier dictatorship first set a minimum wage in 1980.

Working eight hours a day, six days a week would provide less than 60 per cent of a family’s basic needs. Many of the corporations profiting from the exploitation of Haitian workers were household names: Disney, Wal-Mart, Kmart, JC Penny, Sears and Hanes/Sara Lee. Many companies paid just 11 cents per hour.[viii]

II.

In 2000, the democratically elected government of Haiti was again too much a "threat" to Haiti’s elite and their foreign friends. After undermining it for years, the US – joined this time by Canada and France – succeeded in overthrowing it in a February 2004 coup. Two years of terror followed, with thousands more culled from Haiti’s pro-democracy movement.[ix]

The un-elected regime imposed on Haiti after the coup was led by a business consultant from Florida and within months had developed a comprehensive two-year economic and social plan for Haiti, called the International Cooperation Framework (ICF). It was developed "by about 300 mostly foreign technicians and consultants, some 200 from institutions like the US Agency for International Development (USAID) and the World Bank", according to journalist Jane Regan. The plan "calls for more free trade zones, stresses tourism and export agriculture, and hints at the eventual privatization of the countries state enterprises". And despite the plan’s claim, "The government wishes to undertake a national reconciliation process by involving all components of society". Regan noted that "Almost no one from the country’s large and experienced national non-government organization (NGO) community, the local and national peasant associations, unions, women’s groups or the hundreds of producers cooperatives or numerous associations was invited to participate" in the preparation of the economic plan.[x]

There were also plans to present the next elected government with a medium-term "poverty reduction strategy" to cover 2006-09, based on the ICF. Such a proposal would confront Haiti’s next elected government with a fait accompli effectively limiting the scope of its freedom to pursue policy. What the US and its allies were not able to impose on President Aristide during his 1991-94 exile or pressure the Haitian government into accepting since the return to democracy in 1994, they finally accomplished with the ICF. As an unusually frank World Bank report noted:

The transition period and the Transitional Government provide a window of opportunity for implementing economic governance reforms with the involvement of civil society stakeholders that may be hard for a future government to undo.[xi]

Canada took full advantage of this "window of opportunity". Canadian Ambassador Claude Boucher and the US-installed regime created a Haitian-Canadian Chamber of Commerce and, in October 2004, Canada sent its first trade mission since before President Aristide’s re-election nearly five years earlier. It just happened to be a period of particularly intense repression in Haiti, with a myriad of pro-democracy demonstrations attacked by paramilitaries and the Canadian-trained police. A few weeks later, Canadian Prime Minister Paul Martin traveled to Haiti, in part, to help bolster the legitimacy of the repressive regime imposed after the coup.[xii]

On the eve of Martin’s trip his office published a backgrounder stating that most tariffs and quotas on Haitian exports to Canada had been eliminated on many "textile and apparel goods, an important and promising sector for Canadian investment". A delegation of the Haiti Accompaniment Project that had visited Haiti a few months earlier reported:

There has been a crackdown on labor unions and peasant associations.…We met with a labor union organizer who told us of a steadily mounting anti-union campaign directed at the assembly sector. He has received many reports from workers who say that factory owners are not respecting the minimum wage, which was raised last year by the Aristide government. In addition, three hundred workers have been fired from a Grupo M factory in the free trade zone along the Dominican border.[xiii]

Canadian garment manufacturer Gildan rushed to expand operations in Haiti after the coup. Two days after the Haiti regime announced a tax holiday, the press was reporting Gildan’s announcement it was closing a plant in Honduras and transferring production to Haiti. Vice-President Stephane Lemay was not kidding when he told the press the decision to close the plant "was made quite recently" – even 10 days earlier, a company profile in the Globe and Mail’s business section made no mention of any plans to shift operations to Haiti. By April 2005, CIBC World Markets analyst Ronald Schwarz believed that, despite "a surge in imports of textiles from China", "Gildan’s manufacturing is among the most cost-competitive in the industry". Schwarz added, "Gildan’s labor costs in countries such as Haiti and Honduras are actually cheaper than those in China". Gildan’s second quarter results for 2005 surpassed the company’s most optimistic forecasts.[xiv]

(In the January 12, 2010, earthquake, one of Gildan’s contractors’ building collapsed with about 1000 workers inside. According to a Gildan executive, "It appears there are no survivors". The New York Times described it as "probably one of the largest losses of life in a single location". A graphic illustration of largely imaginary "security" concerns thwarting rescue efforts, search and rescue teams didn’t arrive at the factory for four days. "Earlier, American rescue teams were cautioned against going into neighborhoods southwest of downtown, including Carrefour, that were perceived as too dangerous."[xv])

III.

In a recent evaluation of the impact sweatshop development (my term, not hers) has had on Haiti, Canadian political scientist Yasmine Shamsie notes that, "The World Bank is an enduring supporter of this approach, and Haiti’s two most important bilateral donors, Canada and the United States, strongly endorse the model." She adds, "Sixty-five percent of Haiti’s budget comes from external sources:

…Given this level of dependence, it is not unreasonable to assume that the Haitian government’s economic development strategy will be informed by the economic policy of liberalism and export-led development that international donors espouse. …In short, their development trajectory must conform to the exigencies of neoliberal globalization.[xvi]

As it was put in the business pages, Haiti needs "a brisk shot of laissez-faire". Setting aside for the moment the fact that such strategies are not how the wealthy countries developed themselves, it is worth recalling here Henry Kissinger’s remarks on our "age of the expert": the "expert has his constituency – those who have a vested interest in commonly held opinions; elaborating and defining [these vested interests'] consensus at a high level has, after all, made him an expert."[xvii] With this little piece of wisdom in mind, it is much easier to make sense of who is considered an expert on developing Haiti and what sort of advice they have to offer.

Paul Collier is an Oxford economist and former director of development research at the World Bank who "wants to persuade you that external military intervention has an important place in helping" those who live in poor countries. Collier also argues that, "The challenge posed by coups is not to eliminate them but to harness them."[xviii] After the Canada/US/France-backed 2004 coup and subsequent years of military occupation by UN forces, small wonder Collier found himself asked how Haiti could develop. Collier’s answer came in a January 2009 report to UN Secretary General Ban-Ki Moon, "Haiti: From catastrophe to economic security". In essence, he recommends sweatshops assembling garments for the North American market as Haiti’s best hope.[xix]

Demonstrating either his ignorance or mendacity on Canada’s role in undermining, overthrowing and suppressing Haitian democracy for the past decade, Collier has also said "Canada is by far the most welcome in the country because you’re not tainted by history…So you’ve got a very important role. The Haitian government in a way, sort of trusts you more, and is comfortable in a way it’s not comfortable with others."

The Canadian government obviously liked what Collier had to say. As the minister responsible for international aid through the Canadian International Development Agency (CIDA) explained a few months before the earthquake, "Haiti would have been historically a large producer of textiles and garment exporting to North America. It lost that industry and now we’re looking at how we can rejuvenate the industry there."[xx]

Carlo Dade is executive director of the Canadian Foundation for the Americas and the most prominent expert on the region in the Canadian media. On Haiti, Dade’s "pushing the private sector agenda" "has led to a great deal of frustration" for him, so he’s naturally a fan of Collier’s plan and has praised CIDA for its "championing of Paul Collier’s work on Haiti". "Dade argues that despite criticism over sweatshops, working in a North American-run factory is a better option than what’s now available to young Haitians", the Ottawa Citizen reported. "And he says the garment manufacturers are eager to go back."[xxi]

The morning after the earthquake in Haiti, the Globe and Mail editors endorsed Collier’s plan and offered him space on the op-ed page to promote it, with a tweak – since Haiti’s capital Port-au-Prince was largely destroyed, the sweatshops should be set up in the much less-affected north of the country.[xxii] The following week, Dade was invited to the op-ed pages to inform readers that the Canadian government "had a good track record in Haiti on which to build" on "what has worked in Haiti, such as the 2004 multi-donor Interim Co-operation Framework" – the economic plan imposed on Haiti by outsiders after the 2004 coup.[xxiii]

Upping the ante considerably, a week after the earthquake, the Globe and Mail called Haiti a "perennial failed state", noted that its "government is not governing", and boldly recommended Canada, the US and France (along with token Bahamas) should "work together and, with the fragments of Haitian government, remake the Haitian state". Haiti "should not be turned into a protectorate of the United States or the United Nations" per se, but "Instead, a small, well concentrated committee of the major nations chiefly concerned" – coincidentally those most responsible for the 2004 coup and consequent repression – "should be formed to work with what remains of the Haitian government".[xxiv] That’s one way to ensure your vision of sweatshop development in Haiti is implemented, simply assume control of the country – for Haitians own good, it goes without saying. From what I can tell, there has been little or no reaction to the Globe’s radical proposal.

IV.

Our good will and donations cannot be entrusted to the governments and their "experts" who have played such a destructive role in Haiti’s recent history. Left to their own devices, we can safely expect more of the same "development" in the interest of foreign donors partnered with Haiti’s "rapacious" elite, exploiting Haiti’s poor majority, paying "starvation wages", and "opposing any effort to improve the lot of the average impoverished Haitian". In the past, sweatshop development has only exacerbated Haitian poverty and, as the World Bank noted, it makes no significant fiscal contribution to the government. It improved corporate bottom lines, not the lives of Haitians. There is no reason to expect any different this time around.

Despite the impression you might have been left with from the media, Haitians are perfectly capable of managing their own affairs and know what they need a hell of a lot better than we do. Now, more than ever, Haitians deserve better from us and it is up to us to ensure our government does the right thing, not the profitable thing.

Three obvious places to start are forgiving what remains of Haiti’s debt, ensuring Haiti enjoys genuinely democratic elections in the very near future, and immediately ending former President Aristide’s unconstitutional exile. The IMF has recently announced it would work to eliminate Haiti’s remaining debt, freeing much needed resources for recovery. These efforts deserve the support of the Canadian government – especially since the IMF is already backing away from them: at the donors’ conference in Montreal less than a week later, an IMF spokesperson dismissed calls for immediate debt relief saying, "Debt relief is not a today issue, it’s a tomorrow issue."[xxv]

Each of the elections held or planned in Haiti since the 2004 coup have excluded what remains by every credible measure the most popular political party in Haiti, the Lavalas movement associated with former President Aristide. Not only has this fact been ignored here in the West, but one can read from an academic specialist in Canada’s most liberal newspaper that the current Haitian president who oversaw this continued exclusion of Lavalas is "by far the most stable and sensible [president] the country has ever had".[xxvi] Translation: His government does our bidding, which has included continuing to privatise Haiti’s few remaining public assets and vetoing an increase in the minimum wage to $5/day. For genuine recovery, Haitians need to be empowered and that requires elections including the country’s majority political party. Foreign donors monitor and fund those elections and could ensure as much with a proverbial phone call.

In the wake of the January 12 tragedy, Haiti’s current government has remained largely silent as foreign powers have prioritised "security" over maximising rescue efforts. Millions of Haitians were left suffering – and dying – in the aftermath of earthquake. Former President Jean-Bertrand Aristide is Haiti’s most popular and influential figure by a wide margin but pressure from the same countries that overthrew his government in 2004 has kept him in exile despite countless calls for his return. He has said he has no interest in political office and, indeed, he is not eligible to serve as president again, but he is needed now more than ever.

"If he were to return, people would mobilise. Tens of thousands would mobilise like that," according to filmmaker Kevin Pina, probably the single most intimately connected and knowledgeable outsider on Haiti’s pro-democracy movement. "With just picks and shovels they would clean up the mess in just a month. They still love him that much."[xxvii]

[Regan Boychuk completed his MA thesis on Canada and Haiti at York University in 2005.  He is a member of the Canada Haiti Action Network in Calgary.]

[i] Steven Edwards, "Reality in Haiti is even worse than it looks", Canwest News Service, 21 January 2010.

[ii] "Canadian mayors promise to help rebuild Haiti", CBC News, 21 January 2010.

[iii] Editorial, "Today’s rescue is just the beginning", Globe and Mail, 13 January 2010.

[iv] Monique Garrity, "The assembly industries in Haiti: Causes and effects", Journal of Caribbean Studies, Spring 1981; Michael Hooper, "Model underdevelopment", NACLA Report on the Americas, May/June 1987 (World Bank); William Robinson, Promoting Polyarchy: Globalization, US intervention, and hegemony (New York:Cambridge University, 1996), p. 271 (poverty).

[v] National Labor Committee, "Haiti after the coup: Sweatshop or real development", April 1993, pp. 47-48 (USAID); Walter Fauntroy, "Haiti: What must be done", memorandum to President George Bush, 3 March 1989 reprinted in James Ridgeway (ed.), The Haiti Files: Decoding the crisis (Washington: Essential/Azul, 1994), p. 35.

[vi] National Labor Committee, "Haiti after the coup", pp. 77-78, 84.

[vii] National Labor Committee, "Haiti after the coup", pp. 45, 23-24, 31-32.

[viii] Lisa McGowan, "Democracy undermined, economic justice denied: Structural adjustment and the aid juggernaut in Haiti", Development Group for Alternatives Polices, January 1997, sec. 4; National Labor Committee, "The US in Haiti: How to get rich on 11 cents an hour", January 1996, pp. 17, 25, 26.

[ix] See Peter Hallward, Damming the Flood: Haiti, Aristide, and the politics of containment (London: Verso, 2007); Yves Engler and Anthony Fenton, Canada in Haiti: Waging war on the poor majority (Halifax: Fernwood, 2006); Athena R. Kolbe and Royce A. Hutson, "Human rights abuse and other criminal violations in Port-au-Prince, Haiti: A random survey of households", Lancet, 2 September 2006 and "Clarification: Human rights abuse and other criminal violations in Port-au-Prince, Haiti", Lancet, 3 February 2007.

[x] Jane Regan, "A national plan without the people?", Inter-Press Service, 21 July 2004; Republic of Haiti, "Interim cooperation framework 2004-2006", July 2004, p. 8.

[xi] World Bank and International Development Association, "Haiti briefing note", 2 July 2004, para. 10, p. 3 (poverty reduction strategy); World Bank, "Haiti – Economic governance reform operation project", 10 December 2004, p. 4 ('window of opportunity’).

[xii] "Canadian business mission in Haiti", Agence France-Presse, 22 October 2004; Lamar Litz, "Attacks against demonstrations in Haiti: A compilation of reports", Institute for Justice and Democracy in Haiti, September 2005 and Hallward, Damming the Flood, pp. 277-86 (period of repression); Brian Laghi, "Internal strife will undermine rebuilding plan, PM tells Haiti", Globe and Mail, 15 November 2004 (legitimacy).

[xiii] Office of the Prime Minister, "Prime minister to travel to Haiti", 12 November 2004; Laura Flynn, Robert Roth, and Leslie Fleming, "Report of the Haiti Accompaniment Project", 29 June – 9 July 2004.

[xiv] "Montreal-based T-shirt maker Gildan Activewear to close Honduran plant", Canadian Press, 15 July 2004; Bertrand Marotte, "Gildan takes T-shirt making to the cutting-edge of casual apparel", Globe and Mail, 3 July 2004; Carolyn Leitch, "Analysts upsize Gildan targets", Globe and Mail, 12 April 2005 (Schwarz).

[xv] Tavia Grant, "Firms see beyond disaster", Globe and Mail, 19 Janaury 2010 (executive); Deborah Sontag, "Defiant vow to rebuild amid ruins and bodies", New York Times, 19 January 2010 (rescue efforts).

[xvi] Yasmine Shamsie, "Export processing zones: The purported glimmer in Haiti’s development murk", Review of International Political Economy, October 2009. My quotes here are from a pre-publication draft.

[xvii] Neil Reynolds, "A dose of economic freedom will help heal Haiti", Globe and Mail, 20 January 2010 (laissez-faire); Ha-Joon Chang, Kicking Away the Ladder: Development strategy in historical perspective (London: Anthem, 2003) and Bad Samaritans: The myth of free trade and the secret history of capitalism (New York: Bloomsbury, 2008) (how the West developed); Henry A. Kissinger, "Domestic structure and foreign policy", Daedalus, Spring 1966 (experts).

[xviii] Paul Collier, The Bottom Billion: Why to poorest countries are failing and what can be done about it (Oxford: Oxford University, 2007), ch. 8 (military intervention) and Wars, Guns, and Votes: Democracy in dangerous places (London: Bodley Head, 2009), ch. 6 (coups).

[xix] Paul Collier, "Haiti: From catastrophe to economic security", Report for the Secretary-General of the United Nations, January 2009.

[xx] Laura Payton, "Haiti: Canada’s second-biggest aid recipient still needs 'everything’", Ottawa Citizen, 15 September 2009.

[xxi] Carlo Dade, "Haiti’s economic prospects 'hopeful’", FOCALPoint, March 2009 (frustration); Carlo Dade, letter-to-the-editor, Globe and Mail, 11 June 2009 (CIDA/Collier); Payton, "Haiti: Canada’s second-biggest aid recipient still needs 'everything’" (sweatshops).

[xxii] Editorial, "Four to help refound the state", Globe and Mail, 19 January 2010; Paul Collier and Jean-Louis Warnholz, "We need a Marshall Plan for Haiti", Globe and Mail, 13 January 2010.

[xxiii] Carlo Dade, "It’s up to Canada to grab the Haitian brass ring", Globe and Mail, 22 January 2010.

[xxiv] Editorial, "Four to help refound the state", Globe and Mail, 18 January 2010.

[xxv] "IMF chief calls for 'Marshall Plan’ for shattered Haiti", IMF Survey, 20 January 2010; Mike Blanchfield, "Harper-Clinton say accountability of funds key to Haiti recovery plan", Canadian Press, 25 January 2010.

[xxvi] Jorge Heine, "After the mayhem, the real challenge is to fix Haiti", Toronto Star, 15 January 2010. Heine is writing a book on Haiti’s governance.

[xxvii] Andrew Buncombe, "Discovered by Columbus, built by France – and wrecked by dictators", Independent, 16 January 2010.



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