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Haiti GROWTH AND STRUCTURE OF THE ECONOMY
After Christopher Columbus's discovery of Hispaniola
(La Isla
Española) in 1492, Spanish mercantilists generally
neglected the
island and instead focused their endeavors on the more
richly
endowed areas of Mexico and Peru
(see Spanish Discovery and Colonization
, ch. 6). In 1664 France successfully
converted the
western third of Hispaniola into an unofficial territory;
over
the next 140 years French colonialists transformed the
colony of
Saint-Domingue into a slave-based plantation economy known
as the
"pearl of the Antilles." By the late eighteenth century,
SaintDomingue boasted thousands of profitable plantations: 800
produced sugar; 3,000, coffee; 800, cotton; and nearly
3,000,
indigo. Haiti became France's most lucrative overseas
possession.
In his classic 1776 publication, The Wealth of
Nations,
economist Adam Smith declared Saint-Domingue "the most
important
of the sugar colonies of the West Indies."
The Haitian Revolution (1791-1803) devastated
agricultural
output. The leadership of the new nation faced the
daunting task
of reviving economic activity without relying on slavery.
After
the 1806 assassination of Haiti's first national leader,
JeanJacques Dessalines, Haiti operated under a dual economy,
with
forced labor on large plantations in the north and
small-scale
farming in partitioned land in the south. The 1820
unification of
the nation entailed the abandonment of plantation
agriculture and
the establishment of a peasant-based agricultural economy
(see Boyer: Expansion and Decline
, ch. 6). Although policies of
land
redistribution and limited social and economic reform
improved
the lives of the former slaves, the policies also produced
a
severe and ultimately irreversible decline in agricultural
production.
Successive Haitian presidents gave priority to selfenrichment and to the payment of a controversial debt with
France, which left little capital for improving the
standard of
living. The rigid social stratification and the political
disparity between mulattoes and blacks further widened the
gap
between the rich elite and the poor.
The nineteen-year United States occupation of Haiti
(1915-34)
brought unquestionable economic benefits. United States
administrators controlled fiscal and monetary policy
largely to
the country's benefit. The United States military built
major
roads, introduced automatic telephones in Port-au-Prince,
constructed bridges, dredged harbors, erected schools,
established clinics, and undertook other previously
neglected
public works. The troops departed in 1934, but economic
advisers
remained in Haiti to manage the national treasury until
1941. The
Haitian economy enjoyed some growth in the 1940s and the
early
1950s, partly because of improvements in the country's
infrastructure, but mostly because of improved prices for
its
exports.
François Duvalier fashioned the modern Haitian economy
into a
system dominated by personal patronage, institutionalized
corruption, and internal security concerns. Bent on
retaining
power at all costs, Duvalier heavily taxed the citizenry
to
finance the military, the paramilitary security forces
known as
the tonton makouts, and his family's vast expenses.
His
subordinates, from cabinet ministers to rural section
chiefs
(chefs de sections), followed Duvalier's example,
essentially plundering the peasantry at every level of the
economy. The most notorious example of Duvalier's overt
corruption was his administration of a tax agency, the
Régie du
Tabac (Tobacco Administration), for which no accounting
records
were kept. Although he proclaimed himself a champion of
black
nationalism, Duvalier almost completely ignored the
impoverished
rural black population in his government expenditures. As
a
result, many Haitians--rich, poor, educated, and
uneducated--left
the countryside or fled the country altogether. "Brain
drain"
became a serious problem. In 1969, for example, some
observers
believed that there were more Haitian health professionals
in
Montreal than in all of Haiti.
Overall, Duvalier's policies had no positive effect in
Haiti.
According to the United Nations (UN), Haiti was the only
country
in the world that did not experience real economic growth
for
most of the 1950s and the 1960s, a period when the world
economy
expanded at its most rapid rate in history.
During the 1970s, Haiti enjoyed a 5 percent annual
economic
growth rate as foreign aid, overseas investment, and
higher
commodity prices buoyed the economy. A key factor in this
growth
was the 1973 renewal of foreign aid from the United States
and
other donors after a ten-year suspension. The rapid
development
of assembly manufacturing that began in the late 1960s
also
stimulated economic expansion. Higher prices for coffee,
sugar,
cacao, and essential oils boosted previously depressed
cash-crop
production. Infrastructure development proceeded,
construction
boomed, banking prospered, and tourist arrivals more than
doubled. Haiti modernized considerably, especially in
Port-au-
Prince and the major provincial cities. Agriculture
stagnated,
however, and per capita food production in real terms
continued
to decline. Jean-Claude Duvalier showed some interest in
developing the nonagricultural sectors of the economy
during his
regime, and the state slowly expanded its role.
Haiti's fortunes soured in the 1980s, as real economic
growth
declined by 2.5 percent a year from 1980 to 1985.
Inflation rose
over the same period from 6 to 8 percent, and official
unemployment jumped from 22 percent to more than 30
percent.
After an interval of positive growth in 1986 and 1987, the
negative growth trend continued in 1988, when the economy
contracted by 5 percent. Although the country's poor
performance
in the 1980s to some extent reflected hemispheric trends,
Haiti
faced its own peculiar obstacles, many of which stemmed
from
decades of government indifference to economic
development.
Uneven foreign aid flows, resulting from disputes over
human
rights violations and a lack of progress toward democracy,
hampered government spending.Worsening ecological problems
hindered agricultural development, and tourist arrivals
plummeted
because of negative media coverage of the island's
political
situation and the high incidence of AIDS among Haitians.
The most fundamental problems of the Haitian economy,
however, were economic mismanagement and corruption. More
avaricious than his father, Jean-Claude Duvalier
overstepped even
the traditionally accepted boundaries of Haitian
corruption.
Duvalierists under Jean-Claude engaged in, among other
activities, drug trafficking, pilferage of development and
food
aid, illegal resale and export of subsidized oil,
fraudulent
lotteries, export of cadavers and blood plasma,
manipulation of
government contracts, tampering with pension funds, and
skimming
of budgeted funds. As a result, the president for life and
his
wife lived luxuriously, in stark contrast to the absolute
poverty
of most Haitians. Allegations of official corruption
surfaced
when Duvalier appointed a former World Bank official, Marc
Bazin,
to the post of finance minister in 1982. Bazin sought to
investigate corruption and to reform fiscal accounting
practices
in connection with a 1981 International Monetary Fund
(IMF--see Glossary)
economic stabilization agreement. More zealous
than
Duvalier had anticipated, Bazin documented case after case
of
corruption, determined that at least 36 percent of
government
revenue was embezzled, and declared the country the "most
mismanaged in the region." Although quickly replaced,
Bazin gave
credence to foreign complaints of corruption, such as that
contained in a 1982 report by the Canadian government that
deemed
Duvalier's Haiti a kleptocracy.
After the fall of Duvalier, the provisional National
Council
of Government (Conseil National de Gouvernement--CNG)
enacted
numerous policy reforms mandated by structural adjustment
lending
programs from the IMF and the World Bank. These reforms
included
the privatization of unprofitable state-owned enterprises,
trade
liberalization, and export promotion. The CNG, however,
never
fully implemented the economic reforms because of nagging
political instability
(see Background: From Duvalier to Avril, 1957-89
, ch. 9). At the close of the decade, the economic
direction of the military government, led by Lieutenant
General
Prosper Avril, remained unclear.
Data as of December 1989
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