[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

#4782: Slavin: On Economy and Reuters080400 Story (fwd)


While I always welcome a wire story on the economy, an important change of 
pace from the daily political grind, the 4 August Reuters dispatch really 
didn't get into why the gourde has depreciated. But then again, a wire story 
is a rough draft of history, a daily development with 300-700 words of 
explanation -- not a polished and well-rested academic paper that some on 
this list hold them to.

The last time I looked into it earlier this summer, pressures on the gourde 
were mounting in part because reserves at the central bank were getting bare, 
and President Préval and the Alexis Government were  running out of options 
to intervene. A reason for the dwindling reserves was that the Government as 
of May/June was subsidizing petroleum imports (I don't know what the current 
policy is)  -- with high global gas prices, prices at the pump remained 
unaffected. While a Godsend for Haitian tap-tap and red-ribbon taxi riders, 
and chauffeurs, the policy is now being felt yet again by a population who 
lived through the currency devaluation of the embargo years. Before the 1991 
coup,  the rate of exchange was about 7.5 to 1 (and 5 to 1 during decades 
leading up to 1986).  Today, it's back in the low 20s -- damaging an 
achievement of Préval and the governments of his Presidency that had 
stabilized the rate of exchange at about 17. While stabilizing the rate of 
exchange was important, I don't think economists have yet to tell us what the 
radical devaluation since 1991 has truly meant for the Haitian economy.

Patrick Slavin

Patrick Slavin