27953: Durban (comment): re. 27607 Gill's question on finance

[corbetre@webster.edu]

Lance Durban <lpdurban@yahoo.com> writes:

Mark Gill wonders (Corbett #27607) where any president will get the
financial help needed to move Haiti out of the ditch.  He seems to be
asking this question with a foreign aid/ IMF/ World Bank/ government
borrower's mind-set.

Let me ask a question in return.  How many third world countries have
managed to pull themselves out of poverty with the help of the World
Bank, the IMF, UNDP grants, and foreign aid?  Or, perhaps I could ask,
"How many beggers earn enough begging to be able to go into a different
line of work?"

Most foreign aid officials, PVO's, NGO's, government bureaucrats,
diplomats, central bankers, and even educators assume that this kind of
official funding is more important than it really is.  Moreover, they
have managed to convince the general public of the importance of this
kind of "development financing".

I would argue that this is about the most inefficient use of money you
can find.  All to often it is just big wads of money thrown at
meaningless studies or crazy projects that the donor may want for his
own reasons.  Lots of this kind of "investment" ends up pretty much
directly back in the donor countries OR in the pockets of government
officials and friends.

It was thus that a financially unsophisticated President Aristide was
convinced to spend oodles of time wailing about the World Bank loan
window being closed, the unfairness of it all, etc. etc. etc. What
little monies did come in tended to be poorly spent, getting less roads
paved than they should have.  Eventually a frustrated Aristide got a
better idea:  demand $23 billion in reparations from France.  A
pipedream thrown up for his audience in Haiti that had no chance of
doing anything other than upsetting France.  But, I digress...

My point is that the big money is not in this government-to-government
stuff, it is in the private sector, which looks at the risks and puts
its money where it sees the best return on investment.  Haiti looks and
is terrible.  No one is going to willingly invest in a risky, unstable
place that most people don't even dare to visit.

Solving Cite Soleil is the expensive (est. $60 million) exception, but
fixing much of what's wrong does not need much beyond the large sums
already programmed to come in with the U.N. peacekeepers.

Preval first needs to get everyone pulling in the same direction,
however.  Leadership, diplomacy, negociating skills, a willingness to
compromise, and no small amount of luck will more important than the
big bucks in the early stages.  If all of those things are moving in
the right direction, we may be pleasantly surprised to find that the
seemingly impossible burden of financing is surmountable.  There is
plenty of private sector money on the globe available to invest in a
winner.

Lance Durban

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