Good Governance and Corruption in the Caribbean: The Haitian Challenge

A version of this article was originally published by Global Americans on October 1, 2020.

Deepening Crisis in Haiti

The past decade has witnessed a decay of established democracies’ commitment to democratic principles, and in turn, a qualitative decline in the adherence to the norms and institutions of democracy worldwide. How does this relate to Haiti?

First, an alarming feature has emerged across the world—as well as in Haiti: the difficulty of governments to address the aspirations, let alone the fears, of their citizens. Much of this can be attributed to poor governance, which has energized revolts against real and perceived injustice and inequality.

Second, this corrosion of good, let alone democratic, governance has translated into frustrations at both the policy and local levels. In Haiti’s case, the breakdown of national governance has made it difficult to deal effectively with Haiti’s other issues, notably systemic corruption.

Third, Haiti has been marked by a pattern of dismal governance from political leaders of all factions since the late 1980s, coexisting with painfully disappointing outcomes from a variety of international donor efforts and direct interventions.

The combination of the above challenges highlights the country’s unresolved woes. It is not entirely surprising that foreign actors are viewed by portions of both Haiti’s intellectual and popular circles—and in Haiti’s extensive diaspora—as key players in the country’s mess. Because of their overarching role in shaping the international community’s engagement in Haiti, this targets particularly the United States and multilateral institutions, notably the UN system and the Organization of American States (OAS). Perhaps incongruously, there is an expectation that these same actors will readily support Haiti in times of need—and they do. Lost in this dynamic are the fatigue and frustrations evident among Haiti’s many friends. This leads to misjudgments and begins to explain the disappointments of Haitian governance.

Haiti’s Governance-Corruption Spectrum

Corruption permeates all sectors of Haitian governance. The magnitude of the challenge is confirmed by several overlapping indices. Transparency International’s 2019 Corruption Perceptions Index ranks Haiti as the second-most corrupt country in the Western hemisphere after Venezuela. The 2019 Global Competitiveness Report Index, measuring the quality of institutions and the ensuing human capital and economic ecosystem, ranks Haiti fourth from the bottom out of 141 countries (barely ahead of the Democratic Republic of the Congo and Yemen). Additionally, there is the World Bank’s Worldwide Governance Indicators (WGI), reporting across six dimensions of governance, including: government effectiveness, regulatory quality, rule of law, and control of corruption. It also ranks Haiti strikingly low. These statistics reflect a perennial challenge for successive Haitian governments to effectively merge human, financial, administrative, and legal resources to create sustainable development plans, and have eroded the government’s legitimacy in the eyes of Haitians.

Making sense of the scope of the problem may best be visualized through what amounts to Haiti’s governance-corruption spectrum. This includes four arenas of policy activity: (1) economic governance, (2) political norms and effectiveness, (3) rule of law and constitutional apparatus, and (4) international community engagement in Haiti. These four arenas can be paired with possible corruption triggers embedded in each policy activity: (a) financial resource flows and budgeting, (b) institutional mechanisms and management processes, and (c) levels of authority and action mandates.

Governance-Corruption Spectrum Conceptual Design

One can operationalize this framework by looking at three cases of the past decade, notable by their scope: the massive post-2010 earthquake reconstruction effort, the PetroCaribe embezzlement, and in a different context, the uncontrolled cross-border trade between Haiti and the Dominican Republic. In varying ways, each encompasses (a) the skewing of economic governance toward self-dealing through opaque mandates and administrative authority; (b) insouciance and resistance to achieving effective outcomes by tipping monetary flows, processes, and mandates toward corrupted ends; (c) a deceptive observance of formal rules, frequently degenerating into broader institutional and systemic political chaos; and (d) difficult interaction between Haitian actors and international community partners, leading to shortcuts and programmatic dead ends.

Post-2010 Earthquake Reconstruction: This natural catastrophe left an estimated 220,000 people dead, 300,000 injured, and an already weak national governance infrastructure facing destruction and a humanitarian tragedy. But this also opened an unprecedented flow of humanitarian aid—by 2015, approximately $13.5 billion in contributions and pledges, about three-quarters from public sector/country donors.

The optimistic notion of “building back better,” however, was derailed by overlapping initiatives, programming disconnected from the true needs that the catastrophe generated, and overreliance on foreign contractors bypassing the limited absorption capacities of Haitian public institutions. Adding to the frustrations, PetroCaribe funding was diverted to reconstruction projects with little accountability.

The situation was further complicated by headlines such as a major American Red Cross home-building project that could only account for six new homes by 2015. Multiple infrastructure (notably roads, bridges, and even sports facilities) and public building reconstruction contracts were issued to Dominican and other non-Haitian businesses that often appeared to have links to individuals within the Haitian public sector bureaucracy and political community with payouts often exceeding project deliverables. Muddying the waters further were political critiques of the roles played in reconstruction efforts by the Clinton Foundation (later expanded to the Clinton-Bush Haiti Fund, involving funding raised by both former U.S. presidents).

When the Covid-19 pandemic hit Haiti in March 2020, it was revealed that three of the modern facilities built in the aftermath of the earthquake were never opened. The general hospital in Port-au-Prince (primarily funded with U.S. and French government funding), a regional hospital in Gonaïves (with Canadian support), and a smaller site in Jacmel (with support from Japan) remained unused because the government had not yet appropriated the budget to staff these facilities.

PetroCaribe: The scale of the PetroCaribe embezzlement has been well documented—in the $2 billion range, derived from Venezuela’s discounted oil program and designed to support Haitian social and infrastructure projects, but also used for budgetary support. While demonstrating concrete civil society engagement to shed light on the deception of successive governments and their allies, the case also illustrates the limitations of pushing political leadership toward corrective action. Eighteen-month-long public disturbances culminated in what was essentially an economic shutdown in the fall of 2019. With a focus on the need for government transparency and effective anti-corruption measures, public pressure successfully pushed through several investigations.

The most significant effort included an initial report from the Cour Supérieure des Comptes et du Contentieux Administratif (CSCCA, similar to the U.S. Government Accountability Office but with more autonomous legal authority) issued in May 2019, accusing PetroCaribe and a large portion of Haiti’s government of embezzlement. This dovetailed with parliamentary investigative efforts that resulted in a 686-page parliamentary report issued in late 2017. Revelations have gone beyond targeting President Jovenel Moïse’s predecessor, Michel Martelly, and individuals in his government, several of whom transitioned to the current government—and suggested that Moïse himself might also be connected to the scandal.

After delays, the final installment of the CSCCA investigation was issued in August, adding further credence to the fact that between 2006 and 2016, every government ministry, a number of autonomous public institutions, as well as Haitian and foreign firms benefited from PetroCaribe funding which had no cost controls or budgetary oversight. The evidence is overwhelming, but in the context of Haiti’s dysfunctional politics and weak judiciary, it is uncertain what will happen next. Looking to late 2020 and into 2021, it is likely that the PetroCaribe scandal will remain unresolved.

Haiti-Dominican Republic Uncontrolled Cross-Border Trade: The Caribbean remains a bridge between North and South America, a reality that translates into several transnational threats, notably the trafficking of drugs, people, and weapons, as well as organized crime and terrorism. This is why an uncontrolled Haiti-Dominican Republic border has been a long-standing concern. This border is emblematic of the dysfunctional governance that shields corruption on an institutionalized scale.

report issued in 2019 by the Center for Strategic and International Studies (CSIS) makes the general observation that political, social, or economic development strategies in Haiti will not succeed without first addressing the enormous illegal border trade that kills employment, depresses economic growth, and robs government revenues. Working papers prepared for this CSIS report suggest that in 2015, Dominican exports to Haiti totaled $1.4 billion while exports to the Dominican Republic were less than $4 million. After some corrective action, by 2017 the trade balance has barely improved (Dominican exports to Haiti amounted to $853 million while Haitian exports were $42 million). For these years, lost income at the border for the Haitian government from Dominican imports has been estimated to be in the $350 million range, which would have been enough to cover Haiti’s fiscal deficit for 2015.

Key to facilitating Haiti’s corrosive fiscal environment is the collusion among layers of Haitian and Dominican beneficiaries in both the public and private sector. This includes relaxed customs controls on both sides of the border that enable contraband and illegal trade, made worse by trade flows occurring outside of formal border crossings. The endurance of this process also implies collusion that reaches back to the political leadership of both countries. Under-resourced Haitian customs and border control units are no match for the volume of daily merchandise and vehicle crossings. This also affects backup enforcement mechanisms responsible for monitoring and implementing anti-corruption regulations, as well as the application of penalties for failure to adhere to regulations.

The scale of dysfunction affecting Haitian trade extends into arenas deemed by most observers as relative success stories. An example of this is the Caracol Industrial Park in northeast Haiti, built from scratch after the 2010 earthquake with massive support from the United States and the Inter-American Development Bank. The park was designed to help tackle the country’s unemployment rate as well as create jobs away from the overcrowded capital, Port-au-Prince. It attracted major investors, notably South Korean textile companies. However, the government’s mismanagement of the park—corruption and concerns over security—has cast a level of uncertainty about the entire initiative.

Energizing Policy Initiatives

The era of Covid-19 in Haiti means living on an average of less than $2 a day. Many are still reeling from the effects of the late 2019 national shutdown, now coupled with the effects of the pandemic—including the return of nearly 100,000 Haitians from the Dominican Republic, and a reduction in remittance transfer payments from the U.S.-based Haitian diaspora. But what ultimately frames this picture is the country’s poor governance record and despairing sense that corruption permeates everything. In recent months there have been cases involving electric power breakdowns, water supply shortages, as well as fuel supplies scarcities—each with a history of mismanagement and the same refrain of government agencies operating with little oversight and budgetary controls. By the fall of 2020, this unstable edifice also faces a growing domestic constitutional crisis over the length of President Jovenel Moïse’s mandate, and how to facilitate credible elections that have been delayed since fall 2019.

U.S. Policy: These developments are weighing on American policymakers’ patience. One area of misjudgment is the degree to which Moïse is presuming to have unqualified support from Washington, when the latter’s key concern is simply preventing the ongoing political dysfunction from mutating into something worse, requiring greater U.S. action and resources. Despite this being an election year, Haiti keeps receiving attention on Capitol Hill, including two recent House hearings (December 2019 and March 2020). The bill introduced in the U.S. Congress earlier this year, HR 5586 Haiti Development, Accountability, and Institutional Transparency Initiative Act, specifically targets corruption, violence and impunity, freedom of the press, and requires updated reporting on funding related to post-earthquake reconstruction efforts.

This coincides with more long-term efforts, partially funded through USAID, focused on Haiti-Dominican Republic border security and contraband trade, and the ensuing loss of government revenues. There is concern that U.S. and international support is being misused as a budgetary gap-filler to compensate for this loss of revenue. These and other concerns are not likely to pay policy dividends unless a constituency in Congress gets energized. One promising proposal during last December’s hearing in the House of Representatives was to create a bipartisan working group of members in the U.S. Congress. Such a group would provide a more robust Haiti policy platform on Capitol Hill. This would be welcomed by Haiti’s civil society, which has provided much of the political energy pressing for greater transparency across the country’s political and economic institutions.

The governance-corruption theme may pair well with a less defined, but broader interest in U.S.-Caribbean policy going to the notion of resiliencyEffective resiliency is all about acting on anticipated changes or opportunities. In U.S. policy terms, this has traditionally referenced the Caribbean’s capacity for disaster management and overcoming political breakdowns—a definition that matches up with Haiti’s national struggles. In this regard, the U.S.-Caribbean Resiliency Partnership is a commendable endeavor that should give particular attention to Haiti. However, this requires robust engagement from Haiti’s political leaders, from both civil society and the private sector, and needs to go beyond what has until recently been framed mostly by short-term responses and infusions of resources.

Regional Policy Responses: Haiti should be given credit for pursuing investigations of the PetroCaribe scandal. However, issuing government audits and parliamentary investigations reports is not enough, and there is a need to develop more sustainable mechanisms to address widespread public sector corruption. Doing so could constructively channel the Haitian public’s anger and civil society activism with international support. This calls for a more robust judicial assistance program, supporting the investigatory capacity of key government and judicial units, but this will not be sufficient to circumvent political interference and requires creativity from the international community. The recent and imperfect experiences in Guatemala (the UN-backed International Commission Against Impunity in Guatemala, CICIG) and Honduras (the OAS-backed Mission to Support the Fight Against Corruption and Impunity in Honduras, MACCIH) can provide some lessons, but they are not easily transferable.

A more promising venue is to capitalize on Haiti’s membership in the Caribbean Free Trade Area, Caricom, and its institutionalized commitment to the rule of law. Haiti’s governance breakdowns have over the past three decades triggered engagement from its Caribbean neighbors. Although a new Haitian ambassador to Caricom was recently named, the Moïse government has resisted its neighbors’ appeals to assist in addressing the country’s governance/electoral crises. Nonetheless, Caricom has core competencies to develop an effective regional anti-corruption and transparency mechanism, which Haiti might find more approachable.

This aligns with existing technical and financial assistance initiatives on anti-corruption, and the emergence of regional and international enforcement mechanisms, notably the Caricom Implementing Agency for Crime and Security (IMPACS) and the Association of Caribbean Commissioners of Police as well as national enforcement capacities. The region also has several functional agencies that Haiti interacts with, such as the Caribbean Disaster Emergency Management Agency and Caricom’s public health arm, the Caribbean Health Agency (CARPHA). Beyond functional areas of expertise, this mix of institutions also represents a network of partnerships with international funding agencies, government donors, and philanthropy working on transparency and anti-corruption measures. Haiti has to take a more energetic approach to these partnerships in order to truly tackle its long-standing battle with corruption.

Georges Fauriol is a senior associate (non-resident) with the Americas Program at the Center for Strategic & International Studies in Washington, D.C.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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