#4928: Pina comments on inflation in Haiti (fwd)

[Bob Corbett <corbetre@webster.edu>]

From: kevin pina <cariborganics@hotmail.com>

Prices in Port au Prince were unofficially adjusted upwards in the area of 
%20 last Monday, August 21st, to keep pace with the falling gourde. The real 
effects of this increase will be felt within the next week as it spreads to 
the countryside adding to the existing misery index of Haiti's poor peasant 
majority.

In addition to Haitians buying US dollars as a hedge against inflation, 
there is growing evidence that the diminishing supply of US currency is 
compounded by large overseas transfers of capital by Haiti's entrenched 
business elite. In a small and vulnerable economy such as Haiti's, 
relatively modest withdrawals of US currency from circulation can have 
devasting effects.

The substancial capital holdings of Haiti's dominant business interests are 
traditionally invested into imports at a rate of almost 5-1 compared to 
investment in product development for exports. In this way they have 
maintained a high liquidity rate of assets and avoided long-term fixed 
investments dependent upon the generation of employment and infrastruture.

This high liquity rate based on imports, has also placed the business elite 
in a powerful position to exert tremendous influence on the daily lives of 
the majority of Haitians. It is no secret that a great many within this 
business oligarchy have close ties and contacts with allies in Washington. 
It is a very powerful weapon that is wielded as a reminder of where economic 
power resides in Haiti when the political climate requires a demonstration.




kp
________________________________________________________________________
Get Your Private, Free E-mail from MSN Hotmail at http://www.hotmail.com