For debt relief without conditions

By Melinda Miles, <haiti@quixote.org>,
Haiti Progres, This Week in Haiti
Vol. 17, no. 32, 27 October - 2 November 1999

A recent article in the Washington Post quoted Leslie Voltaire, an urban planning advisor for the government of Haiti, as saying that the informal economy is a survival system. The informal economy in Haiti is a direct result of the policies and programs that have been forced on the country by the government of the United States and the international financial institutions, most notably the International Monetary Fund (IMF). The recent announcement by President Clinton at the annual meetings of the World Bank and the IMF, which ushers in a new package of debt relief putting the IMF in charge of poverty reduction, creates a crucial moment for us to talk about what these policies of the IMF really mean.

Walking through downtown Port-au-Prince's boulevards is a lot like walking through a yard sale in North American suburbia. Everywhere you look you see second hand clothes, and piles of old shoes and leather belts. These items, used and thrown away by consumers in the U.S., are what constitutes the majority of the merchandise in Haiti's informal economy. They undercut local products and cause tailors and shoe makers to lose their livelihoods. These now unemployed skilled craftspeople find themselves peddling lower quality products. The informal economy in Haiti has really become a viscous cycle - the very items keeping the unemployed alive through informal labor were what cost them their jobs in the first place.

But perhaps the first question should be: why are the streets of Haiti filled with used American goods? Plans to make Haiti the Taiwan of the Caribbean began in the 1980's, and money was loaned on the condition that it be used to set up export-oriented industries, more closely linking Haiti with the international economy. Today these industries are championed as the saviors of the economy. They have added 40,000 jobs in the last five years, but there is a 70% unemployment rate among the population of eight million.

In fact, the emphasis on export-oriented development contributes to the larger problem that includes the dumping of used U.S. goods on the Haitian market. It also explains the growth of the informal economy as the only means of survival in Port-au-Prince and throughout the country. It causes massive migrations of people from rural areas to urban centers in search of jobs and the consequent overcrowding of the worst slums in the world. It helps us understand the lack of social spending by the Haitian government since most resources go to servicing the external debt.

The nature of the interactions between countries in our global community is evident in President Clinton's symbolic promises to alleviate poverty and his subsequent announcement that this relief would be carried out by the IMF. The results of the IMF's policies in Haiti are crystal clear. The lowering of import tariffs is a strategy to make the export-oriented industries of Haiti more profitable (as most of them are owned by U.S. corporations) and to create a market for used foreign goods. But it has also been the immediate and absolute cause of Haiti's rising unemployment rate, the growth of the informal sector, and the loss of food security. Haiti has the lowest import tariff in the hemisphere at 3%, and also the lowest percentage of food security in the world. Neoliberal policies ignore the rural sector, forcing people to migrate. This creates a larger and more desperate work force, which arrives in cities where there are too few jobs at U.S.-owned sweatshops. At the same time, programs of privatization are pushed ahead, and labor rights are ignored. The informal economy is institutionalized through credit programs. These are the defining features of the neoliberal economy and structural adjustment policies which the IMF is imposing on Haiti.

President Clinton announced a package that would supposedly have the IMF work to reduce poverty and relieve the debt of heavily burdened countries... but only if they commit to restructuring their economies. We should all be ashamed of the debt burden on the Global South. Servicing debt is one of the main reasons that countries like Haiti have cut social spending, causing a disproportionate weight of the debt to be carried on the backs of children. Structural adjustment programs, central to the IMF's reduction of poverty efforts in the past, have not only caused greater debt, but they have increased poverty and human suffering.

The day after President Clinton's announcement, a group of representatives from Jubilee 2000 campaigns throughout the world came together to discuss his speech. Clinton's debt reduction package was discussed, and the Jubilee 2000 representatives formulated a statement which declared that the package does not meet the demands of the movement. The conditions set for debt cancellation were rejected by this group for all of the reasons mentioned above.

The poverty in Haiti is directly linked in many ways to the very program Clinton is making a condition of debt cancellation. Let us hear the voices of the people suffering from structural adjustment around the world and demand something better. Let us demand that debt cancellation be de-linked from structural adjustment and that the key to poverty relief be taken out of the hands of one of the ultimate creators of that poverty: the IMF.

*The author is Coordinator of Haiti Reborn, a project of the Quixote Center. E-mail: haiti@quixote.org.

Here is the Jubilee 2000 Statement, signed by several national campaigns including Jubilee 2000 Haiti, following the Annual Meetings of the International Monetary Fund and the World Bank in Washington, D.C., September 29, 1999:

The agreement on debt reduction made at the Annual Meetings of the International Monetary Fund and the World Bank in Washington this week does not meet the demands of the Jubilee 2000 international movement, as set out in its Rome Declaration of November 1998.

In particular, we reject the conditions set for debt cancellation and the enhanced role of the international financial institutions in imposing and policing the implementation of those conditions. Furthermore, the level and breadth of the proposed debt cancellation is woefully inadequate. The Declaration is attached.

We call on leaders to recognize the urgency of the debt crisis and to meet in order to address the need for definitive debt cancellation before the end of the Millennium.

Signed

Jaime Atienza, Campana Deuda Externa, Deurda Eterna?, Spain
Juergen Kaiser, Erlassjahr 2000, Germany
Anna Awimbo, Jubilee 2000 Afrika Campaign (USA)
Martina Neuwirth, Jubilee 2000 Austria
Adrian Lovett, Jubilee 2000 Coalition, United Kingdom
Robert Reid, Jubilee 2000 - Debt Action network (Aotearoa/New Zealand)
Riikka Kamppi, Jubilee 2000 Finland
Camille Chalmers, Jubilee 2000 Haiti
Angela Temple, Debt and Development Ireland (Jubilee 2000 Ireland)
Greetje Witte-Rang, Jubilee 2000 Netherlands
Kjetil G. Abildsnes, Jubilee 2000 Norway
Humberto Ortiz, Jubilee 2000 Peru
Jose Rebeblo, Jubilee 2000 Portugal
Alejandro Bendana, Jubilee 2000 South
Olle Soderman, Jubilee 2000 Sweden
Vincent E. Edoku, Jubilee 2000 Uganda Campaign
Violet Sampra-Bredt, Jubilee 2000 Zambia, Ecumenical Steering Committee
Mrs. Barry Aminata Toure, National Coalition of Mali/Jubilee 2000
Carlos Pacheco, Nicaragua Jubilee 2000 Coalition

Also Signing

Janet Gottaschalk, Alliance for Justice, Medical Mission Sisters
Jim Matlack, American Friends Service Committee, Washington Office
Johan Fryns, ASEED Europe
Barbara Larcom, Casa Baltimore/Limay
Susan Thompson, Columban Justice and Peace Office
Cornelio Rivera Centeno, Cooperativa de Servicios Multiples,
Campesinos Activos de Jalapa, Nicaragua
Doug Hellinger, The Development Gap
Njoki Njoroge Njehu, 50 Years is Enough Network
Melinda Miles, Haiti Reborn/Quixote Center
Jack Moynihan, Maryknoll Affiliates
Marie Dennis, Maryknoll Office for Global Concerns
Rita Clark, Nicaragua US Friendship Office
Nancy Small, Pax Christi USA
Rev. Terry Provance, Preamble Center
Tammy Williams, Quest for Peace/Quixote Center
Rev. Douglas B. Hunt, United Church of Christ Network for Environmental and Economic Responsibility
Rosanne Rustmeyer, US Catholic Mission Association
Steve Bennett, Witness for Peace/Accion Permanente por la Paz