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We must Learn to Be Bigger than Our Problems

Ericq Pierre, Inter-American Development Bank, 2004-07-13

Haiti Democracy Project web page item #2479 (http://www.haitipolicy.org)

In memory of Leslie Delatour

(The original French version of this article appeared in Le Nouvelliste, Port-au-Prince.)

Preparing an Interim Cooperation Framework (ICF) for Haiti, followed by a formal meeting of donors in Washington D.C. on 19 and  20 July, brings to mind the meeting of the informal consultative group that took place ten years ago in Paris, on 25 and 26 August 1994.

My intention is not to compare the two events, but to shed light on a few facts that the public knows little about and which had an impact on the current situation. The circumstances were not the same then as today, even though the issues were just as important. At the time, the president in exile wanted to obtain the support of the international community for the program he proposed to follow when (and if)  restored to office.

This distinction is important, since nearly three years after the coup d’état, doubts began to creep into in the Lavalas camp about the chances that President Aristide would be restored to office in the foreseeable future. In 1994, several members of his entourage who had obtained residency or political refugee status in the United States began to believe that the reinstatement was not a sure thing.

In his closest circle there were far more mundane concerns. They were afraid of losing his ear when he returned to power in Haiti. Others were more concerned with interpreting the smallest acts and gestures of Prime Minister Robert Malval, who had already resigned but, according to a persistent rumor in Lavalas circles, was suspected of seeking “unnatural” alliances in pursuit of a “ two  galaxies theory”, whose true objective, according to them, was to keep Aristide out of Haiti.

The Governors Island Accord did not keep its promises and persons close to the president continued to worry that he had still not been able to rid himself of the “red priest” label he had been tagged with long ago, when he was viewed as a supporter of the class struggle and liberation theology. Therefore, they insisted that he should publicly announce the program he intended to follow once he was restored. More specifically, he was supposed to unveil his new economic beliefs and clearly announce the colors of his government program.

The task of preparing an economic and social reconstruction strategy was given to Leslie Delatour, whose entrance into the Lavalas camp did not go unnoticed.

Leslie already had a well-established reputation as a fighter, an independent, and a liberal economist. He had proven himself with the fall of President Jean-Claude Duvalier in 1986 when, as Minister of Economic Affairs and Finance in the National Governing Council (CNG), he had resolutely adopted measures to promote a market economy, which led to huge demonstrations against a so-called American plan for Haiti and made the catchphrase “the country is not for sale” popular.

Leslie was politically correct in 1991 when, despite the access he had to the authors of the coup d’état, he was among the first to denounce this attack on democracy, in the name of respect for universal suffrage and the sovereignty of the people. He said afterwards that the coup was reprehensible, no matter what angle it was viewed from, and despite the subsequent drift in power by the Lavalas party and President Aristide himself. In short, he said that no a posteriori justification for the coup could be found in the fact that Aristide had installed a regime that was far from being a democracy.

In his opinion, if in 1991, instead of following its old knee-jerk reaction of organizing coups d’état, the army had played the constitutional card and made Aristide understand clearly that certain practices were unacceptable and that it would not let itself be pushed around, things would be different today.

At the time, it would have been necessary to restore unity of command in the army and reestablish military discipline, as it had existed before Prosper Avril’s coup. Unfortunately, this never crossed the minds of General Raoul Cédras and his team. If the army had put its own house in order and presented a united front and a strong chain of command, it could have quickly thwarted the totalitarian impulses of Lavalas populism and the country would have been spared many evils.

But that’s a different story, beyond the scope of this document.

To return to Leslie, by agreeing to coordinate an economic and social reconstruction strategy, was he  converted overnight to the Gospel according to Lavalas ?. Was he destroying what he had loved or loving what he had destroyed? I leave the question open. Leslie himself said “Father Artistide buried him in 1986, but President Aristide put him back to life in 1994.”

In any event, for him, it was a chance to get across ideas he believed in, to help modernize the State and to set Haiti on the road to the rule of law. After the fall of the Berlin Wall and the break up of the Eastern Bloc, followed by the adoption of the Washington Consensus on the need for a favorable macroeconomic climate, Leslie believed that no country, large or small, could escape the market economy. Also, he had some respect for universal suffrage and he thought that Aristide’s popularity at the time and the mandate he was given in 1990 were the occasion to sell the idea of progress and to reform the State. When he became Governor of the Bank of Haiti and pillar of President René Préval’s economic team, he introduced the same kind of reforms in the central bank as had been introduced 10 years earlier in the Ministry of Economic Affairs and Finance under the National Governing Council (CNG).

He had suggested to people who were close to the president in exile that they should convince him to take courses in economics to improve his understanding of the subject. A list of professors at Georgetown and George Washington Universities had even been drawn up. But apparently no one close to Aristide dared to make the suggestion to him.

Leslie was not really part of the team established by Aristide to prepare the document for the consultative group with him. I should also say that the members of the team, with one or two exceptions, never made any great effort to identify with him either. The ideological barriers that separated them seemed quite difficult to surmount. Also, almost all of them had a track record (wanting to remain faithful to their past or their future) as men of the left, who were too openly opposed to Leslie’s liberal beliefs yesterday to be able to support them in public today. Some agreed to work with him, simply because they considered it their duty since the president had asked them to participate, given the seriousness of the situation at the time.

In a way, the future would show that even President Aristide supported the economic and social reconstruction strategy the way a noose supports a man sentenced to the gallows.

My functions in the IDB and my professional relations with Leslie and the rest of the team gave me some degree of access and I participated in the meetings to revise the final text to be presented at the Paris meeting. I was unable to assess the true contribution of the team to the text, but the least I can say is that the other members did not claim authorship at the meetings I attended. Nearly everyone there, however, was a member of the official delegation sent by Aristide to participate in the meeting of the informal consultative group in Paris on 25 and 26 August 1994. (1)

The program was well received in Paris. It proposed a 180 degree turn from the populism that dotted the rhetoric of the Llavalas leader; it lent consistency to his discourse that went beyond the traditional commonplaces and tried to lift the debate toward a long-term vision of the country’s future.

In short, this economic and social reconstruction strategy could be broken down into three interdependent sections that covered economic and political governance, economic and humanitarian aid, and an emergency job creation program.

The guidelines as presented in Paris by Leslie Delatour were:

1. The fundamental objective of the government that will soon be restored is to irreversibly transform the nature of the State with a view to sustainable development based on social justice and democracy. The government assigns top priority to the fight against poverty and meeting the basic needs of the Haitian people.

2. The government will work to shift the balance of power out of the executive branch, which traditionally concentrates too much authority, and into civil society and local governments, which today are too weak to effectively offset the executive’s grip on power. Therefore it will undertake reforms to:

· Decentralize government and deconcentrate executive power.
· Establish an independent and impartial judiciary.
· Demilitarize public life and reestablish the supremacy of the civilian authorities.
· Reduce the size of the army, professionalize it, and create a new police force..
· Work to strengthen parliament, subnational governments and civil society organizations to make them all capable of playing a constructive role in preparing and implementing public policies.s
· Reform the government and the civil service to make them efficient.
· Reduce the involvement of government in the commercial production of goods and services and modernize State-owned enterprises.
· Implement a macroeconomic policy that is consistent with lasting, sustained growth, based on the key role of the private sector, market efficiency, true pricing, the elimination of tariffs, and use of the comparative advantages of the Haitian economy to boost productivity and create jobs.

3. President Aristide undertakes to renew and strengthen democratic institutions. Free, fair and transparent elections will be organized at all levels in 1995.

4. The key to Haiti’s future is to restructure, professionalize and separate the functions of the army from those of the police. The size of the army will be reduced significantly (no more than 1,500 officers and troops based outside the metropolitan area of Port-au-Prince) and redirect its activities to the tasks of civil defense and disaster relief. Based on the eligibility criteria to be determined, some soldiers who have been demobilized may join the new national police force, provided they have not been implicated in any illegal activities or human rights violations. Members of the army with entitlements will be paid the money in their pension plans prior to their return to civilian life.

5. The reform of justice is of prime importance. An independent judiciary will be established, able to fairly arbitrate conflicts between the members of society, to provide the necessary protection for private sector activities, including respect for property rights and basic human rights. Significant amounts of resources will be made available to improve the performance of the judiciary and heighten its prestige and independence .

6. Parliament, which has emerged from the crisis in a very weakened condition, has a key role to play in modernization of the economy and society. It needs to be equipped to meet its responsibilities. The same holds true of the Cour supérieure des comptes et du contentieux administratif [Financial and Administrative Tribunal]. These two institutions need to be strengthened significantly to be in a position to oversee the executive branch and act as the institutional counterweight that is indispensable for the balance of power.

7. On the economic and financial front, the government’s medium-term strategy is to eliminate financial imbalances, reduce the role of the public sector, liberalize trade, and eliminate restrictions on private investment .

8. It is also necessary to strengthen fiscal discipline and the quality of budgeting. The proliferation of revolving budget accounts that make effective control over government expenditures impossible will be halted and all budget expenditures will be made henceforth by the central government, based on the rules and procedures established by law.

9. The government will also give priority to the mobilization of domestic resources. It will make a sustained effort to improve the effectiveness of supervision and promote an increase in private savings. In parallel, it will improve the allocation of government resources, which will be used to provide better basic services to the public, particularly in education and health.

10. The government also plans to rehabilitate and modernize infrastructure to remove one of the main constraints on the development of the private sector, which should be a driving force in the resurgence of the national economy. The government is aware that the sector is virtually bankrupt and urgently requires assistance, particularly in export promotion. An appropriate policy will be put in place to promote long-term growth.

11. Haiti is a small, open economy, It must not be a ghetto. The country needs to export to prosper. Liberalization of trade will not only remove artificial barriers, it will also eliminate pure economic rent and monopolies.

12. As for State-owned enterprises, the government is holding talks with the International Finance Corporation (IFC) to assess their true condition and make recommendations on practical reforms so that the government could take appropriate steps and answer the question of whether the best way of serving the interests of Haitians is to keep those enterprises in the government portfolio.”

For nearly an hour, Leslie Delatour presented the economic and social reconstruction strategy in the above terms, covering virtually all aspects of national life. He also mentioned the need to update the emergency and economic recovery program prepared in 1993, which had identified the activities to be financed in agriculture, industry, energy, transportation, urban infrastructure, water, sanitation, education, health and nutrition. Emergency measures and the creation of labor-intensive jobs were included to combat the adverse impact of the embargo. The cost of the program for the next twelve to fifteen months was an estimated US$770 million, broken down as follows:

Governance                                    US$175 million
Budget support                             US$175 million
Emergency program and others  US$250 million
Humanitarian aid                           US$90 million
Arrears payments                          US$80 million

The thrity-odd international organizations, friendly countries and NGOs welcomed the strategy. The presentation was clear, direct and convincing. Leslie spoke very calmly, in a conversational tone. It was an elegant performance. The only dark cloud was that they were in Paris and he gave his presentation in English, which caused a stir.

The surprise came first from the Haitian delegation, not all of whose members mastered English to the same extent. In fact, the leader of the delegation may not have spoken any English at all. I found that out that because after he became a minister someone reported that when he was accused of “selling out the country to Paris” he defended himself by claiming that he bore no responsibility for what had happened in Paris, much less for selling out the country, for the pure and simple reason that the sales pitch was made in English and he didn’t speak the language. We never knew whether he was joking or serious .

The delegation from the host country did not view his speaking in English as a friendly gesture toward France. During the discussions, when the French representative insisted that the new government negotiate a confirmation agreement or a staff-monitored program with the IMF as a prerequisite for receiving financial support from France, some people interpreted that demand as a sign of discontent and even of reprisal against the Haitian delegation. That was evidently not so. But, as one of the members of the delegation said, “who knows?”

Actually, I think that Leslie spoke in English simply because the first draft of the text had been written in English and all the discussions in Washington with his colleagues from the World Bank and Aristide’s foreign advisors were in English. He felt more at ease in English and there was simultaneous interpretation in English, French and Spanish.

What should be remembered is that the informal consultative group of Paris achieved its objectives. Aristide unveiled his economic program, trying to erase his image in the eyes of the international community as a radical politician  .

In any event, coincidence or not, events were precipitated immediately after the meeting. One month after Paris,  20,000 marines landed in Haitii. Less than two months later, on 15 October 1994 , President Aristide returned to the country. In November 1994, a new government was formed with Smarck Michel as prime minister. The day after the government was sworn in, a committee of experts from different institutions, coordinated by the Inter-American Development Bank, traveled to Haitii. Working in close cooperation with the government on the basis of the economic and social reconstruction strategy, it prepared an emergency economic recovery program that would serve as the basis for the discussions of the formal consultative group held in Paris on 31 January 1995.

On 19 December 1994, arrears of US$81 million were paid thanks to contributions from the following countries: Argentina, Canada, the Dominican Republic, France, the Netherlands, Japan, Mexico, Sweden, Switzerland and the United States. Haiti contributed US$18 million from its international reserves. The day after the arrears were paid, the International Development Association, the World Bank affiliate that provides soft loans, approved a loan of SDR 26.8 million (US$40 million). On 11 January, the IDB approved an emergency loan of US$70 million for the economic recovery program.

At the donors meeting on 31 January 1995, the promises of financing from our international partners came close to US$1 billion .  The international community had responded in unison. It was at least interested in, if not enthusiastic about, helping Haiti to overcome this last in a long line of crises, which at the time was considered the worst ever to have hit the country. Contrary to the rumors that are still current today, between 1995 and 1996, disbursements to Haiti reached unprecedented levels. For example, in those two years, the IDB disbursed more money than it had in the previous twenty years .

With few exceptions, Haitians began to hope that their country would enter a period, if not of prosperity, at least of normalcy. Nothing appeared to indicate that other serious crises were already brewing and that in 2004, we would have to start over again. People thought we were at the end of a crisis when we were really already at the beginning of a new one.

Which brings me to making a few comments on the general issue of international aid for Haiti and the impact of these solemn high masses that are the meetings of the consultative groups.

There is no doubt that the meetings organized by donors on Haiti’s behalf in 1994 and 1995 have gone down in the history of cooperation in Haiti as models of success in the mobilization they led to, the interest elicited, and the results obtained. I would venture that the same conclusions will be drawn after the upcoming meeting in Washington D.C., particularly as the Interim Cooperation Framework is the result of real team work between a large committee of international specialists and a large number of Haitian technical experts. The international community has praised the quality of the Haitian experts and the support received from the interim government as a whole.

That being said, Haiti’s leaders and people need to understand that the success of the donors meeting does not mean that our international partners are cured of what has come over the years to be called “aid fatigue”. This idea, which began to appear in Haiti in 1995 is, unfortunately, still here in 2004. It will continue until the country is able to build a solid track record in economic and political governance.

In this regard, I take the liberty of recalling certain remarks made by the World Bank in an evaluation report dated December 2001, which covers fifteen years of assistance for Haiti (roughly from 1986 to 2001). Despite the pertinence of the responses by Marc Bazin, Minister of Planning and External Cooperation at the time (which I also suggest should be read), the World Bank has not changed its evaluation. We should not expect that it will alter it now, just because there has been a change in administration, regardless of how well-intentioned that administration is. The World Bank will not change its opinion until the country establishes a clear and sustained track record .

Given the importance of this evaluation report and the road map it appears to propose for the resumption of aid to Haiti, I would like to quote the following two passages:

1. “The international community has established three conditions for re-engagement in Haiti: a resolution to the political crisis, macroeconomic stability, and a commitment by the government to undertake critical sectoral reforms. These conditions have not been met. Even once they are met, the Bank should approach any re-engagement in Haiti with extreme caution. Any move toward re-engagement should proceed in close coordination with other donors at all levels: agreement on objectives, determination of responsibilities in line with comparative advantage, and establishment of consistent operational procedures. The means of re-engagement should be presented in a Transitional Support Strategy paper, with highest priority on the reform of governance and institutions. […]Re-engagement could be initiated through the use of grants to reestablish a dialogue with the government and with civil society. Any lending should be directed toward piloting activities that could contribute to institution building, possibly through the use of learning and innovation loans.”

2. “Without improved governance and greater stability, the Bank and other donors will be able to accomplish very little. Haiti needs not only the institutions of government, but also the processes and systems to enable them to work. Any strategy for a renewed assistance program for Haiti would have to start with measures to strengthen and to increase the accountability and transparency of the country's governing system, including the management of public expenditures and the judicial system. Past efforts to reform various aspects of governance have had little success. […] The country also needs to create a civil society that challenges public authorities to enhance their performance with responsiveness to the citizenry.”  (3)

This report dates from December 2001. The World Bank is currently very active in coordinating the upcoming donors meeting. The resumption of its aid for Haiti is one of the most hoped-for results of this meeting, provided that  the arrears of over US$40 million are  paid. The Interim Cooperation Framework is, perhaps, the equivalent of the Transitional Support Strategy mentioned in the report.

To return to the idea of “aid fatigue,” it should not be viewed as something sinister that applies specifically to Haiti. It undoubtedly reflects dissatisfaction, but it is also a wake-up call, a call to attention by the international community, which demands that we take concrete action and play by the rules of the game “to help it help us better.” It happens whenever we fail to shoulder our responsibilities and refuse to admit our mistakes.

“Aid fatigue” stems from the fact that we have not always honored our obligations or made on-time delivery of orders that we had agreed to, and because our words generally speak louder than our actions. It’s the result of the chronic political instability and fragility of our institutions.

It is also the fruit of the disenchantment that occurred after the great success of the consultative group of 1995 and negligence in implementing certain measures. The impression that prevailed was that the different administrations were only interested in budget support programs that gave them fresh and fast funds, and not in the real work of taking measures for transparency and good governance.

Timely implementation of infrastructure investment programs that could make a difference in the medium and long terms, and respect for procurement procedures are not always given the emphasis they merit. What generally leads to good results in development programs, apart from the availability of financial resources, is the political will to govern differently, to play by the rules of the game and to change things.

Let us look at one of many examples. On 29 November 1995, the IDB approved two emergency loans to which the government attached top priority. One was for US$50 million for the second phase of the emergency economic recovery program (PURE II) and the other was for US$ 20 million for an education program that included the distribution of textbooks to poor children .

The urgency was such that the loans approved in the morning were signed by the government and the IDB in the afternoon. However, ratification did not take place until 13 months later (on 19 December 1996) and the first disbursement of these loans, which were so urgent, didn’t take place until nearly two years after they were signed .

On account of these delays, these projects never truly achieved their objectives and had to be modified several times. During execution of the education program, the assistance for poor children was reduced considerably in amount. The PURE II , which was supposed to be completed in two years, took nearly five years.

That program, administered by the Central Implementation Unit (CIU), is generally considered in Haiti to be a great success. However, the project completion report prepared by the IDB, while recognizing some positive results in conditions in Haiti and the performance of the CIU officials, did not come to the same conclusions as the Haitian project directors.

Scheduled to be executed in 24 months during a post-conflict period, it was executed during a crisis and instead of the two years that had been planned, it took nearly seven years to complete, with all that implies in terms of increased costs. The result is that the indicators reviewed by the Bank for the final classification of the program were not positive, as can be seen from the following excerpt:

Project implementation               Final classification: weak
Development objectives            Final classification: unlikely  (4)

At that time, the executive and legislative branches belonged to the same political family. However, they were unable to reach a compromise to ratify the loans within a reasonable time. Afterwards, other loans totaling close to US$200 million, considered priorities by the government, would languish for more than five years without being ratified.

It is not surprising, then, that the international community sometimes gets the impression that giving aid to Haiti is like “seé laveé men souyeié a te,”  as one of our proverbs says. (5)

Some of the agreements reached at the consultative group meetings in Paris have not been honored and are once again on the table in the Interim Cooperation Framework and the discussions with the IMF (problems with the multiple revolving budget accounts, the independence of the judiciary, decentralization, fiscal discipline, governance, corruption, aid coordination, etc.). As much as they represent milestones, they are also evidence of broken promises and the failure to honor commitments.

Aid fatigue is all that and more.

Paradoxically, aid fatigue is also the result of the tendency of Haitians to always speak badly of their country and their colleagues. Some make it a point of honor never to say anything good about their leaders or public officials. Spreading rumors that are often false has grown to such an extent that diplomats and international officials in Haiti are instructed “never to believe anything they hear and only half of what they see,” which is a great embarrassment for the credibility of their Haitian contacts and Haitians in general.

I believe that the time has come for us Haitians, while remaining vigilant, to get control of ourselves and stop thinking of our leaders as supermen who should have been able to solve all our problems. Of course, there is always room for a government, as for an individual, to improve. However, given the conditions under which the present government has come to power, it has not yet committed any mortal sin that would warrant throwing it to the dogs.

We should recall that we are in a situation of limited sovereignty for a period that has still not been precisely determined but which “friends of Haiti” have begun to estimate unilaterally as at least 15 years. We are therefore on the threshold of a long transition in which the current government is only the first step. We will need patience, self-control and moderate language. Above all, we will need to make compromises among ourselves and find common ground for understanding.That would at least help us get ready for the day when we can say that we too are tired of a certain type of aid.

Be that as it may, the practice of organizing consultative groups on its behalf has enabled Haiti to gradually accept the principle that financial institutions can also be supportive. For the time being, it has also muted the conspiracy theory that has haunted us since independence. This theory has long prevented us from following the rules and asking for assistance from institutions that we have helped to create.

Even now, something seems to be preventing us from appropriating these institutions, which has distorted our relations with them. Sometimes we act as if we were embarrassed to apply to the institutions we belong to. This is why, instead of working to institutionalize relations, we try to personalize them to an extreme.

The fact that some fellow Haitians, intellectuals, journalists, by ideology or by choice, have become used to making ironic comments about the begging bowl that we, Haitians,  walk around with at international forums seems to offend us greatly and we  do not take kindly to insinuations of this kind. We end up giving the impression that we are negotiating nonchalantly.

Haiti has always been very active in the creation of the most important international institutions and almost completely absent from their operation. Despite our status as a founding member of most international organizations, we continue to approach them as a poor relative that fails to exercise its rights and privileges, forgetting that individually and collectively, privileges that are not exercised are generally lost.

It is also true that when we participated in 1944-45 in the creation of the Bretton Woods institutions and the UN, we were not yet the poorest country in the western hemisphere. But we were already what we are now: a good people, proud, burdened with history, living in a small country with big problems. Sixty years after we participated in creating these institutions, 10 years after the informal consultative group in Paris, our problems are worse. The challenge we must rise to, regardless of the results of the next consultative group meeting, is apparently quite simple. We must learn to be bigger than our problems. Can we do it and do we want to? That is the question!

Notes
1. Unfortunately, two members of the delegation have died – Renaud Bernardin and Leslie Delatour. The other five or six members are still active professionally and there is no need to mention their names in this text.

2. The first passage is taken from the Executive Summary and the second from paragraph 5.5 of the Haiti Country Assistance Evaluation published in December 2001 by the World Bank.

3. This analysis is shared by the Inter-American Development Bank. However, it resumed its activities in Haiti after July 2003 and will attend the meeting on 19 and 20 July with a pipeline of projects underway worth more than US$300 million and projects in preparation for approximately US$200 million.

4. The complete report is available on the IDB’s website.

5.  “Washing your hands only to wipe them off on the ground.”

The author is special counsellor to the executive director for Argentina and Haiti at the Inter-American Development Bank.