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#4928: Pina comments on inflation in Haiti (fwd)
From: kevin pina <email@example.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
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
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.
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