Originally: Aristide?s ?different? capitalism is the same old story
Aristide?s ?different? capitalism is the same old story
Dollars and Sense
November/December 2002
BY CLARA JAMES
The Maribaroux Plain spreads out along the Massacre River, a broad swatch of green on an otherwise arid, brown and exhausted landscape. Rice paddies, corn fields, rows of potato and bean plants are punctuated by stands of mango and other trees up and down the riverbed, which is also the border dividing northeast Haiti from its eastern neighbor, the Dominican Republic. But early this year, a strange delegation appeared on the plain. Haitian officials, Dominican business people, and surveyors were pacing the field, looking through their instruments, gesturing. They did not bother to talk to Verniot Pierre, who farms a small family plot; this made him even more suspicious that something was in the works. Only months later did he learn he was about to lose his only source of livelihood.
?This land is what keeps the Northeast alive,? Pierre said, referring to the fertile plain spread out around him. ?But now they want to cover it with asphalt to make ?free trade zone.? I don?t even know what that word means.?
?They? is the government of Jean-Bertrand Aristide, for decades labeled ?firebrand? and ?radical? by enemies and supporters alike. Yet this same Aristide is leading the charge to set up a new industrial park on one of the few irrigated plains in the arid northeast. It is the first of 14 projected free trade zones Aristide?s administration and the parliament – controlled by his Lavalas party ? have in the works. As elsewhere, these zones will offer investors cheap infrastructure, extended tax holidays, easy repatriation of profits, and ? in Haiti ? the lowest wages in the hemisphere.
The story of Maribaroux free trade zone ? from its origins to the benefits it will offer to Dominican capitalists ? offers trenchant testimony to the orientation of Aristide?s government. And contrary to how he has been portrayed in the mainstream and even alternative press, his implementation of the neoliberal ?Washington consensus? is not a sudden change of course. The wiry priest might have called capitalism a mortal sin when he first took office in 1991, but within weeks he was signing up for a structural adjustment plan with all the trimmings.
A TROUBLESOME ?CHILD?
For months following the surveyors? visit, and even as newspapers in the Dominican Republic were running articles on the projected development, Pierre and his neighbors ? and the Haitian public in general ? remained in the dark about the fate of the Maribaroux Plain.
That changed last April when a bulldozer arrived to plow down crops on a neighbor?s land and then, without announcement or explanation, Dominican soldiers set up camp. The next day, they were joined by black-helmeted security guards from the Haitian National Police, a Haitian anti-riot police unit, and the SUVs, buses and a helicopter which delivered the official entourages: President Aristide, Dominican President Hipólito Mejía, a Dominican bishop, Dominican industrialists, and Haitian peasants and townspeople with pro-Aristide signs.
After the bishop?s blessing, it was Aristide himself who announced that he and his Dominican counterpart were breaking ground on a 200-acre free trade zone or, as he put it, ?baptizing ? the first child? of a ?marriage? between the two countries, which he hoped would produce ?many more children.?
An ironic choice of metaphors. Relations between governments are contentious due to the Dominican army?s massacre of over 15,0000 Haitians along the border, generations of racism, and decades of brutal forced repatriations of Haitian immigrants and laborers. More ironic still, Dominican authorities still refuse to grant citizenship to the thousands of children born to Haitians toiling on Dominican farms, sugar plantations, and construction sites.
Aristide got the metaphor wrong in other ways, too. The Maribaroux project is in fact the result not of a ?marriage,? but of what might more appropriately be called a highly secretive ménage à trois among Haiti, the Dominican Republic, and the United States, with one partner clearly subordinate to the other two.
The Maribaroux free trade zone is slated to be the first fruit of the Hispaniola Fund, a concoction of the Dominican, US, and Haitian governments. Haitian and Dominican debt repayments to the United States (and, in the case of Haiti, to the Interamerican Development Bank) are being transferred into the Fund, whose stated aim is to develop the 185-mile long border zone, about 300 square miles. Generous commentators say the Fund will develop projects which protect the environment, provide jobs in both countries, and promote cross-border exchange and understanding; critics say the real goal is to assure a more efficient way of exploiting cheap Haitian labor while keeping Haitians in Haiti.
Aristide?s Maribaroux ?child? definitely favors one of its ?parents? ? the Dominican government and Dominican business people ? much more than the other. First of all, the deal is in no sense a debt cancellation or even a debt-for-development swap, as some of its champions have claimed. Instead, debt payments ? still made with the sweat of Haitian and Dominican workers ? will build the infrastructure that will enable Dominican capitalists to exploit Haiti?s workers.
This is something they have been doing for nearly a century in their cane fields, but which they will now be able to do without having to let Haitians into their country. It?s not unlike the Mexico-United States maquila plant model where US companies locate their plants on the Mexican side of the border to take advantage of lower wages, fewer environmental rules, and weaker unions.
But more importantly, while Aristide and his government trumpet the project for its promised 500 to 1,500 jobs, Dominican newspapers laid out the real story when they proclaimed last April: ?The Dominican Republic will benefit from Haitian quotas.?
So far, the only factories slated to open on the former farmlands are Dominican textile assembly plants, led by the multinational Grupo M, which already employs 13,000 Dominicans in 24 plants where they produce apparel for clients like Tommy Hilfiger, Banana Republic, the Gap, and Abercrombie & Fitch.
Grupo M spearheaded a massive expansion of textile assembly industries in the Dominican Republic over the past decade, but the sector recently hit a wall. Operating in 52 free trade zones with 200,000 workers and producing $4.7 billion of textiles mostly for the US market, Dominican companies have reached the limit of their annual US textile quota and cannot sew another stitch. (The protectionist US quota system offers a telling example of the kind of ?free trade? Washington likes.)
If the final stitching on Dominican blue jeans and T-shirts is done across the border, these products can be labeled ?Made in Haiti? and thus enter the United States under the unfulfilled Haitian quota; meanwhile, the Dominican companies can save up to 90% on labor costs and effectively compete with their Asian rivals. Compared to the average $13 a day they pay their own free trade zone workers, Haiti?s minimum wage of $1.25 ? which was set in 1995 by the first Aristide administration and barely covers one day?s meals ? looks very inviting.
The Haitian address will also take care of another problem looming on the Dominican horizon. Under World Trade Organization (WTO) agreements, in 2007 the country will no longer be able to grant businesses and investors the standard free trade zone incentives like 15-year tax holiday, duty-free import and export, and tax-free profit repatriation provisions. Since Haiti is a much poorer country, WTO policies will allow Dominican businesses to continue to enjoy such benefits there for decades to come.
?THIS CAPITALISM WILL BE DIFFERENT?
The Maribaroux and other free trade zones Aristide announced in his February 2001 inaugural speech are just one ingredient in the standard neoliberal recipe he has followed for the impoverished country since his first term as president.
Elected in 1990 after a campaign characterized by anti-imperialist slogans, Aristide revealed his lack of an independent economic vision only a few months later when he told journalists that while capitalism was, as he titled an LP of his songs, ?a mortal sin,? ?now we have a democracy going up and this capitalism will be different.?
Aristide made free marketeer Leslie Delatour part of his team and traded in his fiery pulpit vocabulary for a lexicon much more pleasing to the international financial community?s ears. In August 1991, his government promised lenders and donors ? the IMF and World Bank, the United States, Canada, France, and other countries ? to enact the usual slew of neoliberal policies: slash the public payroll, privatize state-owned industries, cut tariffs and government petroleum subsidies, and remove controls on Haiti?s currency. In return, the fledging administration was promised over $400 million, nearly $100 million more than it requested. US Ambassador Alvin Adams expressed his appreciation for the new government, which he called ?open and pragmatic [and] ? serious about implementing sound economic policies.?
A month later a coup d?état interrupted the administration?s implementation of these policies, but it also offered the United States and other promoters of the Washington consensus an opportunity to push for continued and deeper reforms from the weakened Aristide. Three years later, once again in Paris in August, and once again meeting with bilateral and multilateral donors, Aristide had Delatour on his team again, helping craft the document which became known as the Paris Plan. And once again, Aristide signed on the dotted lines; this time, he made Delatour head of the Central Bank.
?Aristide should not have come back under those conditions. He should have stayed outside and let us continue the struggle for democracy,? said Clement François, a member of the executive committee of Tèt Kole Ti Peyizan Ayisyen, a national peasant association involved in Haiti?s democratic and popular movement since the 1980s. ?Instead, he agreed to deliver the country on a platter so that he could get back into office.?
Once back in the National Palace, Aristide followed through on his Paris promises. In 1995, for example, he lowered most tariffs to under 10% and initiated the privatization of state enterprises. His successor, René Préval, elected in 1995, continued with a reduction in the state payroll and further deregulation. What remained for Aristide when he took power again in 2001 was to continue applying the Caribbean version of the neoliberal policy: promoting tourism, focusing on specialty crops for export rather than agricultural production for local consumption, and marketing Haiti?s ?comparative advantage,? its rock-bottom wages.
?In the area of industry, according to the experts, Haiti has an extraordinary potential to transform herself into a pole of attraction,? Aristide said from the inaugural podium on February 7, 2001. He promised that 14 new free trade zones would create 140,000 jobs. At the same time, the president pledged to increase Haitians? access to water an electricity, to augment food self-sufficiency by 30% (agricultural production contracted by over 5% last year), to increase the GNP by 4% (it fell by 1.2% in 2001), and to reduce the annual inflation rate from 15% to 10% (in 2001 it averaged 16.8%.)
The government blames the stark contrast between promises and realities on what it calls an ?aid embargo.? For the past year, international lenders and donors have been withholding some $500 million in promised loans and aid due to an ongoing political dispute over the outcome of the May, 2000, elections and the deterioration of the human rights situation. More fundamental than the loss of aid, however, was the rapid liberalization of the Haitian economy under ten years of Lavalas administration devoid of any coherent development program.
?The Lavalas government has no vision, no real economic plan,? said Colette Lespinas, director of the Refugees and Repatriated Support Group (GARR). ?The government is in a tough spot, with no legitimacy and a lot of unfulfilled electoral promises. It hasn?t received the foreign money it counted on, so when the Dominicans expressed interest in setting up the free trade zone it was like manna from heaven, because now the Palace can say it is creating new jobs.?
Offering up Haiti?s cheap manual labor under favorable conditions is nothing new. Both François and his son Jean-Claude Duvalier basically sold Haitian labor to the Dominican Republic, getting a cut for each worker their regimes supplied to dictator Rafael Leonidas Trujillo?s sugar cane plantations. Aristide?s promotion of Haiti?s ?pole of attraction? is little different.
This past August, he was at it again during the visit of Taiwan?s Prime Minister Yu Shyi-kun. ?2000 new jobs in the offing? the government newspaper trumpeted after a Taiwanese businessman promised to open a hat assembly factory and invest $6 million in the country, and after Aristide crooned about ?numerous and succulent ? fruits of solidarity.?
Taiwan business people are not in Haiti because of some new Asian-Haitian solidarity movement. What Aristide calls Taiwan?s ?philanthropy? is undoubtedly more a matter of Haiti?s long allegiance to the breakaway state. Haiti is one of only 28 nations ? 13 of them in the Caribbean basin ?, which formally recognize Taiwan. Since Haiti did so in 1954, Taiwan has provided it with a continuous flow of aid and technical assistance. While in exile during the coup, Aristide also asked the UN General Assembly to admit Taiwan as a member. According to the Taiwanese ambassador to Port-au-Prince at the time, it was a gesture few other heads of state have made and one that would not be forgotten.
In addition to that diplomatic support, Taiwanese business people surely also appreciate Haiti?s Indonesia-level minimum wage, its proximity to the US market, and its unused US textile export quota.
Lacking any kind of coherent development plan of its own, the Aristide administration has resorted to mimicking discourse discredited even in many economists? circles today: the recreation of Taiwan?s so-called economic miracle. Aside from having occurred in an entirely different international political and economic context, Taiwan?s economic development policies ? including land reform and heavy protection of some domestic industries ? were a far cry from Haiti?s obediently neoliberal ones.
Haitians certainly need jobs, and the country needs to redevelop its small industrial base, which has largely been destroyed by imports. But minimum-wage jobs with no unions in industrial parks with no environmental protection, no tax revenues for the government, and no integration of production into the local economy are not the answer.
And while every developing country is under pressure to adhere to the ?Washington consensus,? Aristide and his supporters in Haiti?s business class have never even tried to forge a constructive path; in fact, they have openly embraced the neoliberal model to such an extent that officials and business people on neighboring islands have criticized the country for its rock-bottom tariffs.
?Even when you look at the Dominican Republic, which is also applying a structural adjustment plan, there are a series of economic sectors they continue to protect,? according to Camille Chalmers, executive director of the Haitian Platform for Alternative Development (PAPDA). ?What we have [in Haiti] is a government that completely submits itself to the orders given by the United States, a government ready to do whatever it takes as long as it can remain in power.? But as the Dominican ambassador to the United States himself recognized in a public statement earlier this year, free trade zones and tourism are ?a dead end? for national development.
PAVING PARADISE
Back in Maribaroux, the Aristide administration has chosen one of the few fertile and irrigated spots in the arid northeast for its free trade zone. The plain produces rice, corn, beans, manioc, avocados, mangos, plantains and bananas, feeding not only its inhabitants and the nearby town of Ouanaminthe, but also sending truckloads of produce across the border to the Dominican Republic. The site was clearly chosen without an impact assessment or consultation with local residents or officials.
Alberta Jean-Charles, another Maribaroux Plain landholder, is clear about the value of her land. ?I have four children. I have a little piece of land. That land is the mother and father of my children. It pays for their school. Now they want me to accept a little pile of money and walk away,? she said. ?Once it?s spent, that money won?t do anything for me, but we can always eat the rice we plant.?
Overall, the projected free trade zone will cause the annual loss of $1 million to $2.4 million worth of agricultural production, according to Abraham Shepard of the Haitian Agronomists Association, since a total of about 1,200 acres will be affected by the planned industrial zone through a ?shock wave of roads, service buildings and expanding shantytowns.? A recent study indicated that with proper irrigation, credit and agricultural support, the plain would produce even more.
?It is a scandalous choice and it shows this government?s orientation and that the policies it is enacting are not in the interest of peasants or the country; that they are more to please foreigners,? said PAPDA?s Chalmers. ?All of the economic activity will be controlled in the Dominican Republic,? he continued, adding that because assembly factories usually hire people who can read and write, the displaced peasants will not even have a chance at the new jobs.
Chalmers, Shepard and other experts predict that in a country with 60% unemployment and underemployment, the promise of jobs will attract tens of thousands of internal migrants, just as the Port-au-Prince industrial park did in the 1980s. The results will inevitably be shantytowns, pollution, prostitution and crime. And according to Shepard, in anticipation of the eventual loss of their land, peasants are already cutting down their trees to make charcoal, contributing to Haiti?s devastating deforestation.
Today, grassroots organizations including PAPDA, GARR, and Tèt Kole are mounting a small but determined effort to combat not only the Maribaroux free trade zone, but also the administration?s economic policies in general.
While police succeeded in keeping protesting peasants and their supporters away from the April 8 groundbreaking, May 1 saw peasants and supporters gather once again, this time in nearby Ouanaminthe. Several organizations had planned a protest rally, but Port-au-Prince authorities got wind of it and announced a counter-demonstration with music, free drinks and the distribution of free agricultural tools for the exact same time and place. As in April, government truckloads of peasants from other communities were delivered, while heavily armed riot police did their best to intimidate the protestors.
Still, some 400 people held a rally and march with signs and chants like ?Down with the free trade zone! Long live integrated land reform!? and ?Down with Aristide, country-seller!
Similar mobilization in the 1980s kept a planned free trade zone from opening in nearby Fort Liberté. While the Haitian democratic and popular movement is weaker than it was in those days, the Maribaroux free trade zone is still a winnable fight, especially given the disastrous results of Lavalas?s other liberalization measures thus far.
Since May, a number of peasant, church and other associations have held meetings, published articles and spoken out on radio programs against the Lavalas?s neoliberal project. The free trade zone law breezed through parliament in June, but deputies did add a weak clause saying that siting decisions would ?take into account? factors such as the need to protect agricultural areas.
The Aristide administration continues to lose support due to its policy choices, a deteriorating economic and social situation, and the continued political impasse. At the same time, the conditions for the development of a stronger movement are maturing. The Maribaroux free trade zone offers a good rallying cry, but it will be up to those organizations who have survived the past decade?s repression, cooptation and demobilization to seize the moment and organize a revitalized and radical anti-neoliberal movement, something Tèt Kole?s François understands: ?The only thing that will end the country?s suffering is for peasants, workers and other exploited people to struggle together. One person is not the answer. Elections are not the answer. We need real change.?
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Clara James is a freelance writer who worked at a non-governmental
human rights organization in Haiti during much of the 1990s. She now
works in London.
Resources ? Abraham Shephard, ?Zone Franche dans la Plaine de Maribaroux: L?expression d?une crise de souveraineté et de direction dans un pays en panne de modèle,? Le Nouvelliste (Summer 2002); Economic Commission for Latin america and the Caribbean, Current Conditions and Outlook. Economic Survey of Latin America and the Caribbean 2001 ? 2002; J. P. Slavin, ?Global Donors Pledge $442 Million,? Haiti Insight (National Coalition for Haitian Rights, September 1991.)