Controversy over privatization

Haiti Update, 8 November 1995

During the first week of October, the Government of Haiti declined to sign a letter of intent which was required for the release of $100 million from the international financial institutions to the Government.

Immediately after the Government of Haiti refused to sign the letter, the U.S. Agency for International Development suspended $4.6 million in balance of payments support. The Government is now functioning without any budgetary support from the international community and has been relying solely on limited domestic revenues.

A principal concern of the Government is that privatization needs to be decided through a democratic process. New Prime Minister Claudette Werleigh stated the need for a national debate to find a solution [regarding the future of the state-owned enterp rises] acceptable to the interests of the nation. Another concern is that property ownership be democratized not further concentrated. This was part of the understanding upon which the Government of Haiti received commitments for assistance from the international community in Paris in August of 1994 and January of 1995. Plans included provisions that: pThe privatization law be debated by the new parliament; pPrivatization occur within the context of anti-trust regulations to be passed by the new parliament; pA special effort be made to ensure that the state enterprises not fall into the hands of Haiti’s small and historically anti-democratic circle of elite families which currently monopolize much of the economy—a major fear expressed by the Haitian people. Instead, ownership is to be diversified and democratized.

Popular organizations in Haiti as well as the newly elected parliament have been critical of both the Government and the international financial institutions for the lack of transparency in the debate about privatization. They have been outspoken in the ir concern over the loss of control of key national economic assets just as the Haitian people have gained democratic control of their country for the first time.

Seated only on October 18, the Parliament has not yet had the opportunity to debate and pass a privatization law, anti-trust legislation, or debate specific proposals for the various state-owned enterprises. With a new Parliament and Cabinet, and with a population determined to be part of the decision-making process, time will be needed to make a sound and democratic decision on such vital national issues as privatization and economic reform.