Haiti: The Elements of a Crisis
July 23, 2018
The destructive violence that engulfed Haiti’s capital, Port au Prince, earlier this month was triggered by a spike in the price of gasoline, but the escalation was more likely a reflection of the brittle state of Haitian governance. Haitian leadership should have known better than to clumsily announce price hikes with no effort to prepare the public for what was coming, let alone fail to anticipate that the government’s political weaknesses could invite its critics to view the moment as an opportunity to inflict political damage. The last adjustment in fuel subsidies, in October 2014, came with a coordinated public campaign and outreach to civil society, but this time the government blundered into an announcement that overlapped with the World Cup quarterfinals between Belgium and local favorite Brazil.
The government of Jovenel Moïse—in office since February 2017 after a messy electoral cycle that took nearly 18 months to resolve—began his term with a constructive policy agenda focused on education, agricultural development, and infrastructure. Yet, the reality for most Haitians—living on less than $3 a day, with a youth unemployment hovering around 60 percent and a national currency that has lost half its value—remains largely unchanged. Nothing the Moïse government does seems to work. Since late 2017 the government has appeared dangerously rudderless in a number of different policy areas, unable to overcome key challenges.
For starters, the July 6th announcement of price increases on gasoline, diesel, and kerosene prices by as much as 51 percent was part of a policy squeeze that had been over a decade in the making. A price freeze on gasoline, combined with shipments of subsidized fuel under Venezuela’s PetroCaribe initiative, was ultimately economically unsustainable. PetroCaribe’s collapse, compounded by the rise in international crude oil prices, forced the government’s hand. Adjustments in fuel prices were also a key part of an IMF implementation agreement (Staff-Monitored Program or SMP). The agreement was designed to encourage economic and structural reforms that also included a push for improved tax collection. Yet, the positive aura surrounding the IMF’s late June visit to Haiti did not match the political and social reality in the streets. For now, the government has withdrawn its efforts to raise fuel prices, and the IMF has suggested that a gradual lowering of fuel subsidies may help. But the real challenge may be more profound than that.
Second, the crisis exacerbated simmering tensions regarding Haiti’s unpopular—and arguably ineffective—Prime Minister, Jack Guy Lafontant. An odd choice with no political experience leading a government whose president is himself perceived as politically timid, Lafontant was forced to resign on July 14th. This is likely to lead to an additional reshuffling of the cabinet, although whether this will have a material effect on policy action remains to be seen.
Moïse is playing a weak hand, surrounded by few strong political actors, while key figures in the prime minister’s inner circle, such as his chief of staff and principal adviser, Wilson Laleau (himself a former minister of finance under the previous Martelly government), bear part of the responsibility for the president’s political misfortunes. The government faces continuous pushback from a fluid parliamentary opposition that is often more eager to score points by playing on the Moïse government’s weaknesses than govern.
Third, the violent public outburst earlier this month is also rooted in the widely held perception that a deeply rooted network of corruption permeates all sectors of public governance in Haiti (Transparency International’s 2018 Index ranks Haiti as the second most corrupt country in the hemisphere after Venezuela). A perennial problem, it would be too easy to lay this issue at the doorstep of the current government. Nonetheless, the Moïse administration started off badly in this regard, with the president himself being accused of money laundering even before his inauguration in February 2017. Political chicanery quickly distracted the public’s attention from the issue, but the president probably did not help himself when he later fired the head of the government unit (UCREF) investigating the money laundering allegation.
But all of this pales against the wider political brawl involving PetroCaribe and an accounting of the whereabouts of more than a decade’s worth of funding. The ensuing allegations of mismanagement of funds—purportedly in the $3 billion range—and outright corruption is detailed in a 686-page parliamentary report issued last year. It targeted the Martelly presidency directly, as well as senior members of the current government. The parliamentary report is to a degree the handiwork of some of Moïse’s most powerful political opponents, but the government has nevertheless been unable to get ahead of this issue.
Fourth, the scale of the violence earlier this month also raises questions about the supposed improved capabilities of the national police (PNH). It likewise forces a review of the international community’s shift last year from its stabilization, peacekeeping, and basic police training mission (MINUSTAH—UN Stabilization Mission in Haiti) to the more narrowly focused mandate of MINUJUSTH (United Nations Mission for Justice Support in Haiti), intended to engage some of Haiti’s weakest points—strengthening the rule of law, monitoring human rights standards, and continuing to professionalize the national police. The issue of the national police is clearly in need of further emphasis—even the government agreed that during the recent violence the police were essentially ineffective, or worse, nowhere to be found. There is some speculation regarding deficient budgetary support for the police and delayed paychecks, and one wonders about the recent decision to re-establish the Haitian army (disbanded in the 1990s) and the distractions this may be causing regarding training and manpower.
Finally are Haiti’s foreign relationships. It remains unclear what effect the crisis is having on the Moïse government’s continued, almost suicidal infatuation with the Maduro regime in Venezuela. This is a sore point that continues to worsen Haiti’s relations with Washington. Close ties with Caracas had led to Haiti’s diplomatic isolation at the Summit of the Americas in Lima in April. Haiti did not help its case when it abstained in a vote at the OAS in June on the situation in Venezuela (rather than joining the six Caribbean countries that supported the resolution). Oblivious to the possible ramifications from the Trump administration and key congressional actors (notably Senator Marco Rubio), Haiti’s ministers of finance and foreign affairs were reported to have traveled to Venezuela earlier this month seeking financial support. Haiti does retain a reservoir of goodwill on Capitol Hill, ready to provide support for sorely needed initiatives, such as establishing a coherent Haiti-Dominican Republic cross-border trade controls regime—where the estimated loss of revenue for the Haitian government alone is estimated to be as much as $400 million a year.
Among U.S. policymakers generally, patience with the Haitian policy agenda may be wearing thin at a time when it is most in need of attention. In addition to the issues the recent violence in Haiti has highlighted, the provisional residency of some 46,000 Haitians in the United States under the temporary protected status (TPS) program remains an unresolved matter, and the summer hurricane season has begun in a region still recovering from destructive storms of 2016 and 2017. In the meantime, the political turmoil in Haiti looks likely to continue.
(This essay was originally published by Global Americans on July 19, 2018. It is reprinted here with permission.)
Georges Fauriol is a senior associate with the Americas Program at the Center for Strategic and International Studies in Washington, D.C.
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