Preval seizes Bolivia as economic model

Haiti Progres, This Week in Haiti,
Vol. 14, no. 4, 17-23 April 1996

In a desperate attempt to sell his project to privatize Haiti's state industries to the outraged and resistant Haitian people, President Rene Preval has mounted a major propaganda offensive using formerly nationalist political figures and foreign government officials.

However, the salesmen are not likely to win the confidence of the Haitian people. For example, on April 12, Preval hosted a press conference with the Bolivian minister of privatization Jose Valdez at the National Palace. The Bolivian gave glowing predictions of the miracles that privatization will bring to his nation, South America's poorest. We have 2000 public telephones now, and we will have 4000 in one year, Valdez prophesied. Every little village with at least 300 people should have one telephone and two public telephones.

These marvelous developments will all be thanks to a simple Bolivian privatization formula called capitalization whereby private capitalists are given 50% ownership -- and profits -- of a company and management control. The state retains the other 50% ownership, funneling its dividends, in theory, to a pension fund for Bolivians, according to Valdez. We can say that 'capitalization' gives 2 very important things, Valdez claimed. First, it brings money and technical knowledge into the most important companies in the country; secondly, it distributes the wealth of the country to everybody in the country, and with that, we will have companies which function very well.

Unfortunately for Valdez -- and for Preval, who would like to import this miracle formula -- the Bolivian people are fiercely opposed to capitalization. Tens of thousands of state workers took to the streets of La Paz again [Mar. 27], chanting anti- Government slogans, hurling rocks at the police and blocking traffic, reported the New York Times' Calvin Sims on Mar. 28. They were continuing a two-week-old strike demanding higher wages and protesting the Government's plan to sell off state- owned industries. Valdez dismissed such resistance as the work of some leftist unions who are siding with the left and ultra- left as well as disgruntled beneficiaries of state enterprise contracts. But Sims says that opinion polls have shown that people in this economically depressed nation of 7 million people are generally opposed to privatizations, which they equate with the loss of national independence and with corruption. Just like in Haiti!

The Bolivian authorities have declared a state of emergency and arrested hundreds of protestors several times in the past year to quell (temporarily) opposition to the government's capitalization project. Does Preval also intend to meet the Haitian people's protests with repression? Apparently so. Last week, National Police chief Pierre Denize announced the formation of a special unit for rapid intervention which will be able to confront the disorders arising in the country. Surely to be considered a disorder will be the massive May 1 anti- privatization demonstration being called by a large coalition of major popular organizations including the National Popular Assembly (APN), the Collective for Mobilization Against the International Monetary Fund (IMF) and World Bank, and Solidarity Among Youth (SAJ).

Ironically, Preval's privatization a la bolivienne would above all hurt the Haitian peasantry, the program's supposed beneficiary. In 1985 the Bolivian government began to implement, with the assistance of the World Bank and IMF, a structural adjustment program, which it called the 'New Economic Policy' (NEP), reports the Development Gap, a Washington-based research group, in a 1995 report entitled Structural Adjustment Programs At The Root of the Global Social Crisis: Case Studies from Latin America. Bolivia's NEP has been absolutely devastating for the poor, especially small peasant farmers, the report states. The remedy which is killing Bolivian peasants is the same one that has been killing Haitian peasants for the past 2 decades. Bolivia's adjustment program has emphasized export production through the redirection of credit towards export producers. Most peasant farmers in the country lack the necessary capital to engage in the production of export crops and have difficulty securing credit... Furthermore, fuel subsidies have been cut, leading to significant increases in the cost of the transport of agricultural products... Adding to Bolivia's agricultural crisis has been the U.S. 'Food for Peace' program, which has provided subsidized food from the United States that undercuts local producers unable to compete with the flood of cheap food entering the country. Meanwhile, foreign-grown wheat [in tropical Haiti, it is foreign-grown rice - HP] has been able to enter local markets more easily due to the NEP's creation of a single flat tariff rate on imported goods, which is among the lowest in Latin America. This adjustment in Bolivia has resulted in a dramatic rise in coca production, which has been met by the deployment of U.S. military forces to burn peasants' fields. Is this the model Preval wants for Haiti?

In any case, Haiti's cement plant and flour mill would not be eligible for capitalization, Preval conceded in his April 12 press conference, because they are already in the process of being sold off, a step which violates Haiti's 1987 Constitution prohibiting the sale of state property. Realizing this, Preval called on the parliament this week to pass a law to permit the sale. But even if the parliament were to comply, the law could not take effect for five years -- in 2001 -- when the next Haitian president (presumably) assumes office. Preval will probably try to backhand this Constitutional detail.

Preval has also been summoning unions and other privatization critics to the Palace for dialogue and sending out emissaries to convince the population that the country has no choice but to follow World Bank dictates. I am 100% agreed with privatization if it will allow [Haiti's] mayors to meet their financial obligations, Port-au-Prince mayor Emmanuel Manno Charlemagne, declared on April 15, in one of many interviews he gave to radio and television this week. It would be irresponsible for us to stand by without doing anything while we watched the country disappear. (Charlemagne has distinguished himself in recent weeks by leading squads of Uzi-waving heavies in crackdowns on and evictions of destitute market women in the capital's teeming marketplaces. His once-great popularity has plummeted.)

Charlemagne's words were echoed by Chavannes Jean-Baptiste, a prominent member of Preval's private cabinet and a leader of the Papaye Peasant Movement (MPP), at a meeting in the southern city of Les Cayes on April 15. When you have a budget or a business and it fails, what do you do? Chavannes asked the leaders and mayors of the 18 communes of the Southern Department, whose opinions on privatization he was supposed to be sampling. You have to close it. Can you close a country? The clear inference: Haiti must privatize.

Of course, Haiti can neither close nor disappear. It can only comply to the World Bank's structural adjustment program, or resist. This will be the showdown unfolding in the coming weeks, as a delegation of IMF, World Bank, and Inter-American Development Bank officials arrived in Port-au-Prince on April 15 to cross the t's and dot the i's on the privatization plan Preval signed up for during his trip to Washington, D.C. in late March.

Preval, and his Prime Minister Rony Smarth, have postured that they are going to negotiate with the international lenders. However, experiences around the world over the past two decades demonstrates that the World Bank and IMF do not haggle with their borrowers. They impose conditions for loans and strict plans for reorganizing a debtor nation's economy.

Ironically, the U.N. Conference on Trade and Development (UNCTAD) issued a report this week that predicted an already painfully obvious reality: that the 48 Least Developed Countries (LDCs), of which Haiti is the only member in the Western Hemisphere, would never be really competitive in the Darwinist New World Order which international capital is trying to construct.

The ability of LDCs to take advantage of the emerging opportunities in world markets depends crucially on their ability to foster the development of internationally competitive industries which can meet exacting standards of cost, quality, reliability and delivery schedules, the UNCTAD report says. Supply capacities in LDCs are, however, very weak for a variety of reasons and this is likely to be the major constraint on their ability to exploit the opportunities arising from globalization.

The inhuman dynamics of the capitalist free market are pushing people the world over, from Haiti and Bolivia to Paris and New York City, to resist the austerity measures being imposed by the illegitimate overlords of the world's wealth and to aspire to a truly New World Order which is just, democratic and progressive. How are we supposed to live on such low salaries, cried demonstrating Bolivian teacher Javier Gonzales in La Paz on Mar. 26. We won't stand for it. Fight, fight, fight!