Graffiti outside the International Monetary Fund office in Port-au-Prince: “Down with the IMF!”
Photo: Thony Belizaire
On July 19-20, international financiers convened an “aid conference” for Haiti at the headquarters of the International Monetary Fund in Washington, DC. More than $1 billion in loans and other financial aid to the hemisphere’s poorest country was dispensed. It was the world’s biggest banks’ stamp of approval for the illegally-installed Haitian government of Prime Minister Gérard Latortue.
It is only too fitting that the main participants in the conference were the very governments and “non-governmental” financial institutions that orchestrated the destabilization and Feb. 29 overthrow of the Aristide government—the United States, France and Canada. The Inter-American Development Bank and the World Bank, which spearheaded the embargo of democratically elected President Jean Bertrand Aristide, pledged $410 million. All of that aid is in the form of loans.
The July conference made no mention of the coup, nor did it involve any genuine representatives of the Haitian people. Instead of being used to develop a domestic economic infrastructure or social programs that would benefit the nation’s poor, the pledged aid will likely be used to break down existing obstacles to free trade and to service the debt. Prime Minister Latortue, a U.S. puppet with little popular support, has not been shy about his willingness to carry out in full the IMF’s Structural Adjustment Plan, which includes the privatization of all remaining state industries.
HAITI’S HISTORY OF DEBT
In the 140 years following its independence, Haiti’s beleaguered economy was saddled with an illegal debt to France, its former colonial power. Although Haiti finally paid off the debt in 1946, Jean-Claude “Baby Doc” Duvalier happily revived this financial burden in the mid-1970s, following the “U.S. Plan for Haiti.” That plan dumped surplus U.S. goods into the defenseless Haitian economy.
Unable to compete with the cheap prices of mass-produced, second-hand goods and U.S. agribusiness, farmers and sharecroppers were forced into the cities and the surrounding slums. When popular resistance finally overthrew Baby Doc Duvalier’s dictatorship in 1986, he left the nation with a $1 billion debt and its autonomous economy in ruins.
The movement that brought the Macoute police-military dictatorship to an end eventually elected Father Jean Bertrand Aristide as president in 1990. Aristide stressed the exploitative nature of “free trade” in Haiti, and advanced a nationalist and populist platform that drew heavily from his tradition of Christian liberation theology.
The Haitian elite and Washington policy makers did not waste time ousting Aristide as soon to he began to carry out parts of his radical program. With the first Bush Administration calling the shots behind the scenes, the CIA-trained Macoutes returned to power in a 1991 coup. Despite its pro-democracy rhetoric, Washington immediately extended diplomatic relations to the coup government.
When the U.S. government reinstated Aristide in 1994, it was not due to a change of heart or a devotion to global democracy. The Clinton administration had the same anti-worker, neoliberal agenda as the first Bush Administration. It hoped to push Aristide in the direction of the IMF agenda. The U.S. government hoped that with his history of mass support and a landslide electoral victory to his name, Aristide could improve the public image of both the U.S. government and the IMF in the Caribbean.
In case Aristide remained loyal to the poor peasants, the Macoute opposition was, as always, armed and ready. But the U.S. never fully trusted Aristide: he was not given back the time stolen from his term. In 1995 he left office, with a sigh of relief from Washington.
THE IMF INTERVENES
During Aristide’s second term beginning in 2001, Aristide’s Fanmi Lavalas party had abandoned much of its radical program. Nevertheless, it faced a U.S-funded alliance, the Democratic Convergence (CD), based on Haiti’s bourgeoisie and landed aristocracy. Determined to prevent Aristide’s return, the CD refused to participate in the 2000 presidential elections, claiming fraud in the parliamentary and municipal elections held the previous May. After Organization for American States election observer mission head Orlando Marville claimed that eight Senate seats had been faultily calculated, international banks refused to release aid to Haiti.
This marked an open political intervention on the part of international “aid” organizations against the Aristide government.
The OAS then called for Aristide to address the allegations of corruption. Aristide surely recognized the real objectives behind the CD claims, but agreed to negotiations nonetheless. The Lavalas senators resigned from the contested seats. But the tide had already turned.
While the Western media proposed the alternative to reform—a “peacekeeping” military intervention—the IMF pressured Aristide to crack down on labor unions, eliminate government jobs, give free rein to the U.S. military in Haitian waters and hand positions of power over to former Duvalier officials. The international banks took every capitulation as a signal to make more demands.
The Macoutes refused to negotiate, calling for Aristide’s resignation. But the major financial institutions struck the most critical blows, withholding $500 million in loans. Haiti’s debt to the World Bank and Inter-American Development Bank mounted to $60 million.
As Haiti plunged deeper into despair, the IMF refused to contribute, citing a policy of non-investment in any country already in arrears. To receive any aid package from the IMF—aid attached to its own set of crippling neoliberal reforms—Aristide needed to first repay the IDB. The World Bank added yet another flaming hoop for Aristide to jump through, withholding all aid until Haiti carried out the IMF reforms. Instead of taking high-interest loans from opposition-friendly private Haitian banks, Aristide emptied the Haitian foreign reserves in July 2003 to pay back the IDB.
Presenting starvation as the alternative, the IMF made continuous demands, expecting Aristide to fully conform. Regardless of his attempts at conciliation, the IMF withheld aid, effectively forcing Aristide to carry out the destructive elements of the neoliberal agenda without receiving its “rewards”: loans designed to further ensnare the Haitian economy in an inescapable web of credits and debts.
THE CARROT AND THE STICK
Once Aristide had eliminated the pretext for the embargo by meeting both the economic and political demands of the international banks, the opposition and U.S. NGOs attacked again. In the name of safe investment, the IMF disingenuously called for Aristide to stabilize the country.
Meanwhile, the U.S. government, through the CIA and Defense Intelligence Agency, began to arm and train former elements of the army and Macoute death squads in neighboring Dominican Republic. These thugs began to carry out attacks in Haiti.
When Haitian police clashed with these “rebels”—who openly advocated extinguishing the democratically elected Lavalas party—Western governments raised the cry of “state repression” and “anarchy.” The IMF, meanwhile, was not simply operating as an economic institution—it was pursuing a political agenda. Aristide could not appease it on strictly economic terms. No amount of compromise from Aristide could satisfy the IMF, precisely because its agenda included removing him from power.
In the developing world, the liberalization of trade clearly leads to the ruin of local production. In the 1980s, Haiti imported eight percent of the rice it consumed; now that figure is up to 68 percent. Forty percent of the rural population suffers malnutrition, while 70 percent of the urban population is unemployed. Even when the import of foreign capital provides a temporary relief, the accompanying structural adjustment plans leave countries more dependent and weaker than ever before.
The IMF works on behalf of multinational corporations, finding natural resources, sweatshop laborers, and consumers for Western capitalism’s surplus production. Instead of jumpstarting local economies, the IMF’s structural adjustment plans return the developing world to colonialism. The power of the IMF to withdraw aid or withhold loans at any moment, and therein inflict massive suffering, has an open political nature. It is a new-and-improved, streamlined weapon of greed, punishing its enemies through processes of deliberate starvation and destabilization.
This was the tactic of the IMF in Haiti. It imprisoned Aristide within the confines of the Structural Adjustment Program, and then manipulated the nation’s internal political and economic conditions until it had sufficiently confused, demoralized, and starved the Haitian people. In October 2001, when the U.S. demanded that the world submit to its “war on terrorism,” Aristide rightly denounced the aid embargo as a form of “economic terrorism.”
Given Aristide’s cornered position, it is not surprising that his verbal hostility to the U.S.-controlled banks did not translate into outright defiance. Remembering the punishment for his 1991 noncompliance, Aristide tried to placate the U.S. government. But the international financiers and ultra-right would have none of it. The Bush Administration recognized that Aristide could denounce a destructive economic policy in the future.
Just the potential to speak openly or to revive his populist platform—or worst of all, to call the Haitian poor into action—made him the target of another U.S. coup.
The case of Haiti shows that the IMF’s neoliberal policies are not just economic. In addition to earning vast profits for the banks, IMF loans are a political tool that act in coordination with imperialist powers to bring about their geopolitical goals.