Free Market Left Haiti's Rice Growers Behind

By Michael Dobbs, Washington Post,
Thursday 13 April 2000; Page A01

PONT-SONDE, Haiti - Last month, several dozen impoverished rice-growers and their families decided they could bear life in Haiti no longer. They pooled their meager savings, bought a rickety boat and headed northward to the British-administered Turks and Caicos Islands. Halfway into the 150-mile trip, the vessel capsized, killing all 60 on board.

We are mourning now, because we lost so many members of our families, said Emince Bernard, one of the villagers who remained behind, and who heard about the disaster on the radio. But the same thing is going to happen over and over again, because the people here no longer have any hope.

The plight of Haitian rice farmers provides a human dimension to the debate over the costs and benefits of globalization as Washington gears up for protests to coincide with the annual meetings of the International Monetary Fund and World Bank. Organizers of this weekend's demonstrations have cited the rice growers' struggle for survival as a prime example of the failure of free-market policies advocated by the IMF with the strong backing of the United States.

The IMF forced Haiti to open its market to imported, highly subsidized U.S. rice at the same time it prohibited Haiti from subsidizing its own farmers, declares the Web site of Global Exchange, one of the Third World advocacy groups organizing the Washington protests. Haitian farmers have been forced off their land to seek work in sweatshops, and people are poorer than ever.

Over the past two decades, a period of growing IMF tutelage over the Haitian economy, exports of American rice to Haiti have grown from virtually zero to more than 200,000 tons a year, making the poverty-stricken country of 7 million people the fourth-largest market for American rice in the world after Japan, Mexico and Canada. According to U.S. and Haitian economists, the result has been a massive shift in local consumption habits, with many Haitians now choosing cheap imported rice at the expense of domestically grown staples, including rice, corn and millet.

While IMF officials acknowledge that the transition to a market economy has caused wrenching social disruption for Haiti and other developing countries, they argue that it will prove beneficial in the long run, provided governments stay the course. Officials accuse their opponents of exaggerating the influence of lending organizations, oversimplifying and distorting the issues, and playing down systemic problems such as corruption, political instability and insecurity.

It is naive to suggest that the IMF has had a dominant role in the development of Haiti, argued Patricia Brenner, the IMF's mission chief to Haiti. She noted that Haiti had an average of one government a year in the 10 years following the collapse of the brutal Duvalier dictatorships. The economic situation must be seen against the background of political chaos, military takeovers and governments being formed and replaced before they have time to establish a real economic program.

From a grass-roots perspective in Haiti, the poorest country in the Western Hemisphere, it seems undeniable that millions of people have been left behind in the rush to globalization. That much is evident from the distended stomachs of children in villages like Pont-Sonde, the throngs of women seeking jobs at 30 cents an hour in sweatshops owned by U.S. clothing manufacturers and the daily street demonstrations through the slums of Port-au-Prince by laid-off government employees.

According to the IMF's figures, roughly 50 percent of Haitian children younger than 5 suffer from malnutrition. Billions of dollars in international assistance have done little to improve conditions in the countryside, where two out of three Haitians live. Per capita income has dropped from around $600 in 1980 to $369 today.

But the real question, say IMF supporters, is not whether a majority of Haitians are worse off than they were 15 or 20 years ago, but whether there is a realistic alternative to free-market policies. Globalization is a fact, not a project, said Richard Coles, president of the Manufacturers' Association of Haiti. The world has shown it works in a certain way. Why should we Haitians think we can invent the wheel all over again?

As a leading rice grower in Haiti's fertile Artibonite valley, Charles Suffrard has a vivid memory of what happened after 1986 when the country began opening its markets to foreign imports at the behest of the IMF and other international lenders. Jean-Claude Duvalier, the son of Haiti's longtime dictator, Francois Papa Doc Duvalier, had just fled the country for a gilded exile in France, to be replaced by the first of several military leaders supported by Haitian business interests.

American rice invaded the country, he recalled. It was sold for so little that we could not compete. There was a very serious struggle. When they brought the [American] rice up from Port-au-Prince, they had to escort it in military convoys, to prevent us from seizing it. By 1987 and 1988, there was so much rice coming into the country that many of us stopped working the land.

Although the IMF was not directly involved in sending cheap American rice to Haiti, its policies accelerated the breakdown of the old subsistence economy, and its replacement by a cash economy. Through a series of structural adjustment programs, beginning in the late 1980s, the IMF encouraged Haiti to adopt some of the lowest tariffs in the Caribbean. The IMF's influence was magnified by its role as the gatekeeper to funds from other international organizations, including the World Bank and the European Union.

IMF officials insist that many Haitians, particularly those living in cities, have benefited from lower tariffs. Because of the influx of cheap American rice, food prices have remained fairly stable. Maintaining a relatively low inflation rate has been the IMF's main achievement in Haiti over the last few years.

According to free market theory, nations should specialize in areas where they have a comparative economic advantage. Poor countries should be able to take advantage of the abundance of cheap labor to increase their exports of manufactured goods, as well as certain agricultural items like mangoes and coffee, to markets including the United States.

But there is a gap between free-market theory and Haitian reality, as the rice conflict demonstrates. Development economists point out that the competition between Haitian and American rice growers was hardly fair, since U.S. rice production is subsidized through a wide variety of mechanisms. Furthermore, most of the American exports were handled by a single U.S. corporation--American Rice Inc.--which has enjoyed an almost monopolistic position in Haiti.

The prospect of dynamic, export-driven growth seems distant, to say the least. Although wage levels are lower in Haiti than elsewhere in the Caribbean, manufacturers have been scared away by the unstable political climate. At present, there are only 25,000 jobs in the light-manufacturing sector, compared with a peak of 60,000 jobs prior to the 1991 military coup.

At the Caribbean Apparel Factory on the northern outskirts of Port-au-Prince, women line up every day, desperately hoping to be hired to sew T-shirts for the American market. Home to several dozen American manufacturers, the industrial zone is virtually autonomous from the rest of the Haitian economy.

I come here every day in the hope that one day there will be work, but there never is, said Caroline Ezebeie, 33, who left her village as a teenager, lured by the promise of a better life in the city. When I leave the house, my children hope that I will earn enough money to come back with food. But very often, I have to walk home because I don't have enough money for a bus.

We are waiting for our deaths, yelled someone else in the crowd. We are starving. There is no work for us here.

For the anti-IMF protesters and Third World advocates now gathering in Washington, the answer to Haiti's problems, and the problems of many other developing countries, resides in measures such as debt relief, land reform, small-scale projects specifically geared to the needs of the rural population and selective tariff protection for agriculture and fledgling industry.

You can't expect a country like Haiti to compete on world markets immediately, said Mark Weisbrot, co-director of the Center for Economic and Policy Research in Washington. If you look at those countries that have succeeded in dramatically increasing their per capita incomes--countries like Japan, South Korea and Taiwan--you will find they all did it under some kind of protection.

This country is not Korea, retorted Eric Verreydt, the IMF representative in Port-au-Prince, pointing out that Haiti's greatest single economic advantage is its close proximity to the huge American market. Haiti desperately needs investment, and the only people who are likely to invest here are foreigners and rich Haitians living in the United States. That is a fact of life.

Since the reestablishment of democracy in 1995 following a U.S. military intervention, Haiti has been receiving around $125 million a year in international assistance, much of it contingent on an IMF seal of approval. But because of instability--the country has been without a parliament for the last year--IMF attention to Haiti has been sporadic. The last structural adjustment program petered out in 1997 because of a domestic political crisis following the disbursement of only $21 million of a planned $120 million loan. The IMF has since persuaded the government to implement an informal staff program, focusing on macroeconomic goals such as a balanced budget, tight monetary policies and low inflation.

Even left-wing Haitian politicians acknowledge that the country can hardly survive without the support of international lending organizations.

We don't take the position that we don't need the IMF and the World Bank, and that IMF policies are diabolical, said Yvon Neptune, a spokesman for former president Jean-Bertrand Aristide, who has described capitalism as evil. We are saying we want to sit down and negotiate with the IMF, and adjust their policies to the reality of Haiti.

Attempts to promote alternative models of development in Haiti in recent years have run aground from political infighting, lack of funds and impracticality. A pilot land reform project in the Artibonite valley has failed to increase rice yields, and in some ways even made matters worse, leading to the breakup of relatively efficient farms and the decay of irrigation systems.

Unable to produce enough rice to satisfy domestic demand, or even feed their own families, the rice growers of the Artibonite are close to despair, and caught in a seemingly unresolvable contradiction.

The introduction of American rice has hurt us terribly, said Claudes Derilus, a 29-year-old rice farmer in Pont-Sonde. But if it wasn't for this rice, Haitians would die of hunger.