#634:Guy Antoine's query : from Dailey

[Robert Corbett <bcorbett@netcom.com>]

From: PETER DAILEY <HOLMES11@prodigy.net>

Guy Antoine has suggested that I elaborate on some 
statements I made in an earlier posting on structural 
adjustment (#548) that apparently were unclear.

I noted that by far and away the most profound of the 
various "reforms" had been the reduction or elimination 
of tariffs on agricultural imports, a measure taken early 
in Preval's term that attracted very little public 
discussion or controversy. I stated as well that various 
measures designed to help the Haitian farmer cope had 
been approved but never implemented. 

Guy asks what these measures were. My impression is 
that aside from technical assistance they primarily made 
credit available for mechanization, repair of irrigation 
canals, purchase of fertilizer, construction of storage 
facilities, etc. I'm sure Merrill Smith knows the answer. 
On reconsideration, however, I'm not sure how much, if 
any, of this was directed toward the Haitian peasant. In 
an interview with Fritz Longchamps on March 22, 1999, 
Max Blanchet's translation of which was posted on April 
8,  FL was asked what the Preval government was doing 
to stimulate economic growth. Longchamps said that 
they had done the unprecedented, and invested more 
than $200 million in agricultural loans. This, he notes, 
"is a way of boosting Haiti's productive sectors and 
streamlining the investment codes so as to increase 
exports," something, I think we would agree, distinct 
from aiding peasant farmers. "Unfortunately," Fritz 
notes, "this coincided with Prime Minister Smarth's 
decision in 1997 to resign. With the post unfilled, we 
couldn't implement the policies that we initiated and 
which the parliament approved."

I wrote as well that I doubted that the GOH, faced with 
the international lenders proposals, ever had a choice 
other than to dig in, negotiate the best deal 
possible, and move on. Guy asks if I believe that the 
Government's powerless resulted from an utter lack of 
capital or were there other equally important factors. 
The overwhelming factor, clearly, was an utter lack of 
capital.

I state that the privatization of Teleco appears to be 
pushing toward a conclusion, and Guy asks if I can be 
more specific about the outcome and whether I regard it 
as a good thing. I imagine that Teleco will be operated as 
a joint venture with the GOH retaining a minority 
interest but don't know for sure. Do I regard this as a 
good thing? Yes, I really really do. Quite apart from the 
gross mismanagement, incompetence, featherbedding, 
nepotism, corruption etc., the abysmal quality of  service 
really beggars description. The modernization of Teleco 
and extension of service will cost many hundreds of 
millions the only source of which is foreign and domestic 
private investors.

Guy asks whether I believe the many alternative 
proposals that have been put forth make more sense or 
less sense than the international lenders plan to 
restructure Haitian agriculture toward export. I believe 
that almost all of them make more sense but since none 
of them suggests a way whereby they might be financed, 
none of them can be regarded as real alternatives. 

Finally, I refer to amounts "tacitly set aside by the 
lenders for the satisfaction of the corrupt instincts of 
Haiti's rulers," and Guy asks a number of questions, both 
practical and philosophical, that I am unable to answer. I 
should start by acknowledging that my original statement 
was unfortunately phrased, and that I do not believe that 
Haitian politicians are any more venal than their 
counterparts elsewhere,  or less willing to subordinate 
their personal interests to the national good. At the 
moment, however, it is hard to believe in the future and 
"Make Hay while the Sun Shines" is definitely the order 
of the day. 

The negotiation of the loan agreements is an intensely 
political process. A typical U.S. budget contains obsolete 
or useless weapons systems the cost of which is in the 
billions included solely to insure the support of a crucial 
Senator. The representatives of the international lenders, 
it is my belief, take an extremely realistic view of the 
Haitian political situation and the importance of the 
cooperation and support or lack of opposition  of 
various actors and sectors and do what they can to 
accomodate them. I don't believe that it is a matter of 
suitcases of cash or Swiss bank accounts but of funding 
projects that do not make strict economic sense or have 
a lower priority than others. I imagine that they regard 
the total elimination of corruption as utopian and the 
question rather as one of degree, and that the total 
elimination is a lesser imperative than implementing a 
project that they believe will help the Haitian people. I 
also believe that the lenders have a pretty precise idea of 
which methods of funding or implementation of 
programs are susceptible to abuse, and when they employ 
them do so fully aware that abuse may occur. I hope this 
doesn't sound too Oliver Stone-ish!

Finally, it would surprise me extremely if the GOH 
received hundreds of millions to spend as it sees fit. I said 
that the international lenders would "misspend" the 
money because I don't believe it is possible for the World 
Bank or anyone else to restructure successfully on a 
macro economic level, and  because I believe that the 
goal of transforming Haitian agriculture toward export is 
a profoundly misguided one, for most of the same 
reasons that Josh DeWind elaborated on back in the 
Eighties. The aid contemplated will have some good 
effects and some bad effects. This, I think, is preferable 
to continued stasis, the prospect of negative growth, and 
the vortex of diminishing resources. I don't believe there 
can ever be any decisive change without responsibile and 
farsighted leadership from Haiti's government and civil 
sector, and at the moment there is very little sign of 
that.

Peter Dailey