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Haiti and the Ugly Side of Debt Relief

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In 1803, the slave rebellion in Haiti defeated Bonaparte and 1804 saw the birth of an independent nation. But just 20 years later, France exacted reparations for the loss of its colony totaling $20 billion in today's currency.

Between 1957 and 1986, the Duvaliers ruled Haiti with US backing ending in the popular overthrow of Baby Doc, the son. By the time he fled the country, the foreign debt amounted to over $750m. Since then, the debt continued to rise through interest and penalties. Meanwhile the Duvalier family seems to have over $900m in western bank accounts, the subject of a trial currently before the Swiss courts.

But the sheer cost of servicing these debts is crippling. The World Bank estimated that Haiti paid $321m just to service the debt between 1995 and 2001. Recently, the Paris Club announced debt relief for Haiti amounting to $214m. But the debt reduction includes an element for the interest they would otherwise have paid. When it is expressed as Net Present Value, the real figure is $84.9m.

Despite the finance packages being announced for Haiti, they are not gifts, but investments. Haiti will be paying interest on loans it has no choice but to accept. The European Network on Debt and Development estimate that Haiti will pay $16.2m in debt servicing this year. In the next four years to 2013 it will come to $130.4m and over the next 19 years it will amount to $661.5m.

And currently, the World Bank and the Inter-American Development Bank own 80% of the debt between them in equal measure. And there are rich pickings in a disaster zone because there will be major reconstruction projects. Haiti is forced to accept the loans and then to pay US corporations to carry out the reconstruction.

But it was US business that had such a major negative impact on the Haitian economy. Agricultural product dumping, including rice, meant that the rural economy of Haiti collapsed, sending two million people into the Port-au-Prince slums in the last 20 years. US companies took advantage of the cheap labour to set up clothing sweatshops.

The neo-liberal plan of massive loans and open markets overseen by puppet governments following the coups of 1991 and 2004 has destroyed the infrastructure and the rural economy. If there was any compassion at all in politics, or any sense of responsibility amongst the politicians who pushed such globalisation madness on a desperately poor country, they would cancel all the debts now, without conditions, and would restore sovereignty to Haiti.

But the sad fact is that when a nearby economy is so desperate, there are huge profits to be made. The construction companies will have a field day. We won't see the necessary infrastructure develop, just those parts needed for foreign companies to export the goods produced by the available pool of cheap labour. We won't see roads and hospitals, but we'll see privatisation of anything that has a hint of potential profitability.

Despite all the posturing about Haiti, the hand-wringing and the tearful comments to camera, the hard truth is that Haiti's parlous state is largely the responsibility of the policies of globalisation and the competitive accumulation of large corporations. And the only proposal on the table to help Haiti is more of the same poison.

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About Bob Lloyd

  • Jonathan

    I am actually quite shocked at the sums of debt that you have referred to in your article, although I shouldn’t be surprised that so called “Aid packages” are in actual fact merely ways to try and create an even greater dependency on various western governments. The truth is that reconstruction contracts are the key, just like they have been in Iraq. Whilst I accept that governments will always be in debt to some extent my personal view is that morally is a country the size of haiti ever going to compete economically with other western governments if we wiped out their debt? Answer: No. So why don’t we offer a true hand of friendship and wipe out massive chunks of debt so that they can get back on their feet.

  • pablo

    Hey Bob,

    Perhaps in this article had you actually went into some detail on the various nefarious and evil deeds and tactics of the World Bank and the International Monetary Fund you might have got some interest in your article. As it is, it is a very superficial article, lacking in any real substance altogether, not to mention the two outright falsehoods that I already referenced in some detail here. Unfortunately your warmer mongering is not helping your cause either. I would bet money that Mr. Pauchari head of the IPCC gets indicted within weeks.

    Try using a little depth in your article next time Bob, and you might pique some interest pal.

  • Pablo, you don’t even understand what you are quoting. Read Houghton’s book, then come back with your objections. In the meantime, you can give us all a rest. We can’t take on the task of teaching you basic science.

  • pablo

    The following headlines which refute everything your saying is hyperlinked below Bob.

    IPCC gate Du Jour – Antarctic Sea Ice Increase Underestimated by 50%

    Northern Hemisphere Snow Extent Second Highest on Record

    Greenland glaciers – melt due to sea current change, not air temperature

    What’s Up With That?

  • pablo

    Your funny Bob, and pathetic at the same time.

  • And here’s the verbatim interview.

    I’ll say no more on this thread about global warming, a relief to all no doubt 🙂

  • In case anyone else has been mislead by the absurd reports of what Phil Jones said in an interview, they might like to look at this.

    It is very clear evidence that the shoddy journalism so characteristic of the Mail is repeated over and over by those desperate to distort the science to back their prejudices.

    But let’s talk about Haiti and leave this global warming denial nonsense to one side.

  • Pablo:
    Your comments are truly pathetic. Read the article in the Mail again. Even if you are daft enough to take such articles on face value, you can see that there is nothing in the article to challenge the scientific view that global warming is occurring and is largely man-made.

    You are desperately clutching at any comment made anywhere to back the denier case. The article even itself says: “despite the controversies, there still appeared to be no fundamental flaws in the majority scientific view that climate change was largely man-made”.

    And far from a U-turn, he is making quite specific statements about the MWP. Read about it! Find out why all climate scientists are interested in it! Read what John Houghton has to say about it.

    Even supposing that the MWP wasn’t warmer than now, that says absolutely nothing about whether or not the present warming is man-made – even the Mail journalist realised that! You really do need to read the science and try to understand about the trends and how to analyse them. Trying to tag onto the MWP and draw such conclusions is like saying that it’s cold today so there can’t be global warming. Of course, it’s nonsense.

    Taking the Mail as your arbiter is hopelessly inadequate, though even reading their articles carefully would stop you making such nonsense claims. There are some excellent accessible books on all this stuff and one of the best is John Houghtons, Global Warming: The Complete Briefing. Reading that would help you understand why the MWP is seen as interesting though not problematic.

  • pablo

    Speaking of Climate Change Bob, did you see yesterday’s headline in the Daily Mail in the UK?

    You do know who Professor Phil Jones is don’t ya Bob? One of the guys at the center of the Climategate scandal that had to step down because of it.

    “Climategate U-turn as scientist at centre of row admits: There has been no global warming since 1995”

    “Professor Jones also conceded the possibility that the world was warmer in medieval times than now – suggesting global warming may not be a man-made phenomenon.

    I just love how you warmer mongers only select the information that is cherry picked.

    By the way Bob, you statement that bio-fuels have NOTHING to do with any food increases in Haiti, is simply not true, and I did provide a few urls’s that counter your OPINION.

    Also Bob, to say that there is no bio-fuels being grown in Haiti as you did in comment 14 is also untrue as a fact. You would be wise to use more accurate terms when making such assertions, such as “Haiti grows very little biofuels today” or “the reason that food has become so expensive in Haiti has very LITTLE to do with biofuels”.

    Again, both your assertions are untrue on their face pal. This is one of the reasons I have such a hard time with warmer mongers such as yuourself, you twist facts into fiction to suit your fancy. Nice try though :).

    And he said that for the past 15 years there has been no ‘statistically significant’ warming.

  • It’s worth looking at the climate science estimates of biofuel to get a more balanced understanding of their potential role in reducing emissions.

    Although there’s something of a bonanza in the industry, the optimistic assessment isn’t really justified by the figures. As John Houghton and Barrie Pittock have both stressed, biofuels actually release carbon that would otherwise have been stored in plants. The process of land-clearing puts that stored carbon into the atmosphere and biofuels would need to be used for close to a century for there to be any payback in terms of reducing atmospheric carbon dioxide.

    Most advocates of biofuels don’t take the land use into account. They see a lower carbon cost in producing it than traditional hydrocarbons. Climate scientists though have always been clear about this other part of the equation.

    This is a fairly good account.

  • It’s not a secret.

    The trade policies imposed by the IMF on Haiti were responsible for food dumping by the US. That’s what crippled the rural food economy. Tree quarters of rice consumed in Haiti now comes from the US at inflated prices caused by dought around the world.

    Because of the trade deals that Haiti is locked into, it has no choice but to pay those inflated prices. Fifty years ago, Haiti was self-sufficient in rice.

    Haiti doesn’t use its land to produce biofuels. And the reason for the price rises isn’t because biofuels are being produced.

    Biofuels incidentally are not the green panacea they’re made out to be. Climate scientists have repeatedly looked at the carbon cost. Although burning ethanol is better than other fuels, the carbon cost of production is high.

    Of course corporates jump on the green bandwaggon. If there’s a cent of profit in it, they’re there. But to pretend that people who are campaigning against global warming are complicit in genocide is prejudice and ignorance to the point of abuse.

    Campaigners against global warming are also campaigning against the causes of drought, which has been responsible for increases in food prices around the world.

    The sheer ignorance associated with comments from global warming deniers is breath-taking. They don’t bother to look at the science, don’t understand the carbon and water cycles, the heat sinks, the movement of water vapour, the ocean currents, the role of ice, and all that really important stuff. Instead they accuse people of complicity in genocide. Such self-satisfied prejudice, such smug ignorance, is pretty disgusting. These guys really just don’t want to know.

    In this case, the US is very largely responsible for the collapse of Haitian agriculture. There is no doubt about the economic effect of food dumping, nor the damaging effect of the conditions associated with the IMF loans.

    And no matter how much ignorant abuse is thrown around, it won’t change the facts.

  • Arch Conservative

    The people hustling the “green technology” are also corporatists, and are making a fortune looking “environmentally friendly”

    Ruvy…..now are you seriously insinuating that people like Al Gore have some type of ulterior motive? That they’re not in it for completely altruistic reasons? That they’re not trying to save the planet for the rest of us?

    I saw “An Inconvenient Truth.” I looked at all those climate charts with my own eyes as Mr. Gore explained them so I aint buying what you’re selling Ruvy. the debate is over.

    The science is settelled.


  • zingzing

    to say that the food prices are going up because of biofuels highlights a bit of human stupidity. let’s go ahead and start using our grains for things we haven’t used them for before, without upping the amount of grains we produce, and then let’s see what that does to supply and demand.

    i wouldn’t go so far as to say that environmentalists are “complicit in genocide,” but it does raise an interesting point with a pretty obvious, albeit difficult, solution: if you’re going to use grains to create biofuel, you’d better make sure that you produce enough grains to support both the food and fuel demands of the world.

    besides, biofuels, even without the unintended consequences, smack of a more of the same. while i’m all for cutting emissions, there are more productive ways of doing so.

    ruvy: “Bob, the problem you are encountering is that people like me and Paul is” a dose of self-righteousness.

  • pablo

    The main problem with the left as I see it, aside from wanting government to solve all problems, is that they are the last to realize just how co-opted their politics have become, and that is not an easy thing to admit to, that one has been had. The Nation Magazine is run by a CIA family, the Utne Reader’s editor is the grandaughter of Felix Warburg, and Amy Goodman is funded by the Rockefeller and Ford foundations, and The Daily Kos’s owner worked for the CIA and loves them.

  • pablo

    Yeah Ruvy!! Right fucking on!

  • Bob,

    The problem you are encountering is that people like me and Paul is that we’ll demand truth. It’s not enough that you make the corporatists in America look bad. You need to recognize – whether you like it or not – the role played by the so-called “green” technology in this evil mess.

    The people hustling the “green technology” are also corporatists, and are making a fortune looking “environmentally friendly”, when they – just like Monsanto with its seedless grain – create genocide among the poor by forcing the prices of food to rise out of reach of the really poor people – like those in Haiti.

  • pablo

    As a National Geographic Report confirmed, “With food prices rising, Haiti’s poorest can’t afford even a daily plate of rice, and some must take desperate measures to fill their bellies,” by “eating mud,” partly as a consequence of “increasing global demand for biofuels.”

    Sure Bob biofules have NOTHING to do with it.

  • pablo

    In April last year, World Bank President Robert Zoellick admitted that biofuels were a “significant contributor” to soaring food prices that have led to riots in countries such as Haiti, Egypt, the Philippines, and even Italy.

  • pablo


    To say as you did that biofuels have NOTHING to do with food prices increasing in Haiti is disingenuous at best. It does have an effect on the price there, and I would be happy to cite sources should you ask for them.

    Worlwide, biofuels is creating genocide, and you being the warmer monger that you are, the least you could do is acknowledge that fact, and try to bring light on the subject.

  • Pablo:

    The food dumping in Haiti from the US was as a result of the IMF conditions which forced Haiti to open its economy to imports of heavily subsidised US rice. At the same time the IMF banned Haiti from subsidising its own farmers, this crippling the rural economy.

    From 1980 until the end of the 90s, rice import went from nothing to over 200,000 tons per year. Even the IMFs own figures now show that half of Haiti’s under-5s are malnourished and per capita income has dropped by a third in the last 30 years.

    Nothing to do with biofuels, just corporate capitalist accumulation backed by US controlled world financial institutions.

  • pablo

    One of the biggest problems concerning the inability of many Haitians to feed themselves has to do with how much prices have increased for basic foods due to biofuels. This is one of the verboten subjects that most global warmer mongers do not like to talk about.

    There are credible reports out there that suggest that literally millions of people have died of starvation worldwide recently because of this phenomenon. If this is indeed true, then those that do support the use of biofuels in an effort to stop carbon dioxide emissions into the atmosphere are complicit in genocide.

  • Tony Mitchell

    Isn’t it the usual situation. Aid agencies battling to assist the Haitians with food and water with limited finances, while governments, banks etc. plunder the country again to payback debt. Greed is still alive and well! Excellent article Bob.

  • Excellent article telling some truths that are too often ignored or covered up. Whilst trying to appear to be the world’s saviours they too often hide their ulterior motives.

  • Bob,

    Nice, workmanlike job. Unfortunately, Americans do not want to hear of the real damage they do in the world economy. It hurts their image of themselves as great humanitarians. Individually, they are great humanitarians – but their corporate monsters undo all the good the individuals with good hearts do.