Haiti's Latest Coup:
Structural Adjustment and the Struggle for Democracy
Multinational Monitor, May 1997
An interview with Camille Chalmers
Camille Chalmers is the executive secretary of the Haitian
Platform for Alternative Development (PAPDA), the leading Haitian
organization analyzing the impact of structural adjustment. Chief
of staff to then-President Jean Bertrand Aristide from 1993 to
1994, Chalmers resigned over disagreement with the development
policy mandates of international donors. Chalmers has been a professor
of economics at State University in Haiti since 1983. He was arrested
and brutally beaten by the Haitian military regime in the early
Multinational Monitor: What do you mean when you say the U.S.-favored
political model is based on the premise that Haitians cannot govern
Camille Chalmers: The U.S. view is, "If we leave them
to their own device, it will be total anarchy." They came
to this conclusion because there was a very vibrant Haitian popular
movement calling for very radical democracy. One where people
would really participate, one which is not based on a few politicians
making decisions for the country while everyone else is a spectator.
We have very concrete manifestations of what that meant. After
the downfall of Duvalier, in many sectors of the country, the
population created popular tribunals. The tribunals would call
on Tonton Macoutes and Duvalierists, ask them questions and try
to get justice. This is a formula that was very active, very vibrant,
but does not fall within the U.S. concept of democracy.
The U.S. vision of democracy is to create a "democracy"
without the participation of these people, since they do not know
how to govern themselves. The view is to construct a democracy
that would remove the people from the political scene.
The coup d'etat played a very significant role in accomplishing
that objective, through killing, through destroying popular organizations,
through granting residency status in the United States to many
leaders of popular organizations. As a way of decapitating the
popular movement, there were interviews made with a lot of people
during the coup; about 12,000 leaders of popular organizations
were taken out of Haiti and given permanent residence status in
the United States.
This is an important aspect of the present institutional crisis.
The international community has attempted to install institutions
molded after those of the United States without examining our
people's experience. Today, as proven by the results of the April
6, 1997 elections, there is a growing breach between the dynamics
of the popular movement and the new institutions which the international
community attempts to install.
MM: Why have you been so critical of the structural adjustment
emphasis on supporting the private sector to generate growth?
Chalmers: In Haiti, we are a very polarized country. One percent
of the population has 50 percent of the wealth. Ten to 15 families
control practically all phases of production and they engage in
all parts of the economy. Supporting the private sector means
supporting these families.
However, this private sector is not one that invests in the
country. It is one that engages in pillage and speculation. They
buy coffee in Haiti, sell it somewhere, and put the money in a
foreign bank. They do not invest in productive capacities of the
country. Their economic activities cannot lead to development.
The structural adjustment model also asserts that the Haitian
peasantry has no future in agricultural production, that the peasantry
should not engage itself in producing rice or corn, because it
can get those things from the United States.
Instead, the peasants are told to work in the assembly industry.
U.S. AID documents dated 1990 to 1991 state that the "natural
advantages" -natural!-of Haiti are two things: its proximity
to the U.S. market, and its cheap labor. We do not believe it
makes sense to base a development plan on exploitation of low
salaries, however, because while cheap labor can offer temporary
advantages, development itself means we have to do what is necessary
so that the wages can increase. We have to very actively invest
in human capital development. That would lead very rapidly to
undermining the comparative advantage of Haiti, its cheap labor.
Even when there is growth in the assembly sector, it has absolutely
nothing to do with the productive capacity of the industry or
the economy, since the assembly sector is an economic enclave
without backward and forward linkages. Take for example 1991:
we exported $150 million worth of goods, but of that $150 million,
$134 million was spent on goods imported. So the value added by
the Haitian economy was very small.
We think that development is possible only to the extent that
it uses the historic productive capacities of the country-of its
4 million peasants (800,000 farmer families), 300,000 artisans,
12,000 peasant organizations, 8,000 cooperatives, many tens of
thousands of small and micro enterprises and a very dynamic informal
sector. This approach calls for courage, for relying on what are
truly the most dynamic sectors of the country. Only they could
lead to a break with the past, to an eradication of the economic
apartheid that we now have in Haiti.
MM: Why have you so strongly opposed the IMF's call for shrinking
the state and for privatization?
Chalmers: Reducing the public role of the state is absurd
in Haiti. We have 47,800 state employees for 7 million people.
Compare that to the Dominican Republic; with the same population,
they have 400,000 state employees.
Of the 47,800 employees, 20,000 work in the education or health
sectors, as police and at the university.
In the countryside, the state is basically absent. Outside
of Port-au-Prince, you see there is no state; there are few hospitals,
there are few schools. Traditionally, the state has been a force
only present in its terror; it has never lived up to its obligation
to provide services to the population. There is an important deficit
in providing social services. In Haiti we have the highest rate
of illiteracy, infant mortality and maternal mortality in the
In spite of that extreme situation, the IMF has called for
reducing the size of the state by 50 per cent. We think it is
necessary to redefine the mission of the state so that it accepts
the obligation to deliver universal access to basic infrastructure,
health care, education, electricity and communications. In terms
of privatization, the state controls 33 enterprises. This is small
compared to other Latin American countries, where the state typically
controls thousands of enterprises.
In a document that was presented in Paris in August 1994,
the IMF called for the sale of nine of the most important public
enterprises. These enterprises include the telecommunications
company, the electric company, the National Bank of Credit, the
Popular Bank of Haiti, the port, the flour mill, a Haitian cement
company and a food oil-producing enterprise. No arguments were
offered for why these enterprises, the most profitable, would
At stake is the question of national sovereignty. With privatization,
if all of these things are sold to multinational corporations,
we'll have the banks, the national cooperative, the telephone
company, the electricity company-all strategic sectors- in the
hands of multinational corporations.
In general, we think the criteria to privatize or not should
be the following: What is the best way to create a network that
could provide services to the vast majority of the population?
Second, how can services of the best quality be provided? Third,
how can we create the kind of management that will prevent waste
of the country's resources? Fourth, what is the role of this enterprise
or this sector in a strategy of national development?
MM: How do you apply those criteria?
Chalmers: Consider the enterprise that produces cement, for
example. In Haiti over the past 30 years, the construction sector
has grown rapidly, even when the economy is shrinking. That means
cement is a sector which is always likely to operate at a profit.
Second, building infrastructure - roads, airports, irrigation
systems-will be a central component of any development strategy,
and this construction will create a very high level of cement
consumption. Third, in Haiti, the primary element in cement exists
in abundance in the Central Plateau. Even the World Bank recognizes
that with a 30-year reserve of this material in the Central Plateau,
Haiti could produce a very high quality cement that could be competitive
even on the world market. All this leads us to believe that cement
is a very strategic good; and, as such, we need to have public
control of it. The price of this material will play a crucial
role in the feasibility of infrastructure investments. If this
strategic good is controlled by a multinational corporation, obviously
the first priority is to maximize profits, not to support a national
Public or private ownership of the electric company will also
influence how national resources are used. All of the World Bank
investments to increase electricity production have been in oil
burning factories. But there are other ways we could generate
electricity in Haiti; we could use resources-like solar, wind
and hydro-that would make us less dependent on petroleum and that
are also more compatible with our environment. This also links
directly with the problem of erosion that we have in Haiti. The
more that we are able to use other sources of energy, the less
the population will use charcoal for energy.
But this kind of reasoning can only be made by a state that
is preoccupied by the overall interests of the country. A multinational
company would never be interested in this kind of reasoning. The
only thing that would concern a multinational company is making
Generally, as regards performance records of privatized companies,
it has been demonstrated in Latin America that service provided
to the general population has worsened following privatization.
Service has deteriorated the most for those with the least purchasing
power; the multinationals who acquire privatized enterprises target
their services at those who can afford them.
Privatization has also led to very catastrophic results in
places where the state did not have the capacity to implement
regulations to prevent the growth of big private monopolies.
MM: Can the state-owned companies be operated viably.
Chalmers: In the case of the telecommunications company, Teleco
earns between $40 million and $80 million every year. Teleco's
profits financed the government in exile of Aristide during its
three years in exile. The profit from the telephone company was
deposited in U.S. banks.
Teleco only services 65,000 lines. There is an effective demand
for 120,000 additional lines. So it is a company that has enormous
expansion capacities, and it could easily expand and modernize
using its own income. Profitability could be increased still more
if management were improved and corruption curtailed.
Several other enterprises such as the National Bank of Credit,
the National Airport Authority, the cement company, and others
would undoubtedly be able to grow and expand while remaining in
the public sector. One of our many requests from PAPDA is for
an extremely detailed study which would allow the Haitian government
to make the best possible decisions.
MM: Which multinationals are interested in acquiring the state
Chalmers: The process is not transparent, so we do not know
everything. During the last four months of 1996, of the 10 enterprises
on which bids were placed, foreign corporations bid on nine. Bell
Canada, MCI and Telecom France are very interested in the telephone
industry. EDF of France and Hydro Quebec are interested in the
We know a foreign company has already purchased cellular rights
in Haiti. It was estimated by an expert to be worth $18 million-and
it was purchased for $500,000.
MM: Does former President Jean-Bertrand Aristide broadly share
the PAPDA critique.
Chalmers: Aristide has on many occasions been very critical
of the economic policies of structural adjustment. But many people
ask why it is that when he was in power, he did not go further
than he did. Even at times when former Prime Minister Claudette
Werleigh had a strong critique of the structural adjustment package,
the general orientation of Aristide's program was not radically
different than what is being proposed right now. Many in the population
think that his critique is merely expedient-that it is only something
for today, and is linked to his aspirations to be president in
2001. He has a new political party, Lavalas Family, which has
the goal to recapture the presidency. In any case, the concerns
addressed by President Aristide are generally just. I must however
stress the fact that PAPDA is an independent organization of civil
concern which has no relationship with the political party directed
by the former president.
MM: Would Haiti benefit from Aristide returning to the presidency.
Chalmers: It is very difficult to say today. It depends upon
the positions and alliances of the Lavalas Family Party until
the coming elections. As of now, the Lavalas Political Organization
(directed by Gerard Pierre Charles) and the Lavalas Family seem
entangled in a power struggle which has estranged the popular
What is important for me is to note that the popular movement
has matured a great deal. We went from a period after Duvalier
where everyone united against the Tonton Macoutes. We passed through
another period where everyone was for Aristide, because of what
he represented-a new state, justice, transparency.
But the two periods of the Aristide presidency differed. Before
the 1991 coup, the economic policy was based on the priorities
of the population. After the return, the program was one totally
dictated by the international financial institutions.
I think now the Haitian people are ready to move to a third
level, where there will be unanimity for a societal project, for
a project that goes beyond an individual. The Haitian population
has learned what can happen if they tie their aspirations to an
individual. I think the popular movement is ready to construct
a project that responds to their social and economic needs.
MM: Why did Aristide change his basic policy orientation?
Chalmers: One of the conditions of the United States to support
the restoration of Aristide in Haiti was his acceptance of a program
of structural adjustment.
During the second period of his presidency, Aristide had less
space to maneuver. I'll give you a concrete example. In August
1991, Aristide and his team of advisers were going to Paris to
negotiate with the international financial institutions. Before
they went, Aristide called all of his ministers and advisers,
and they had a daylong meeting with popular organizations at the
national palace. There were 800 representatives of popular organizations
at the meeting, and it was televised live. At this meeting, the
popular organizations were able to ask questions of the ministers;
and the ministers had to respond and explain the economic policies
of the government and what they were going to do in Paris. This
is something that was not possible after 1991. It was not possible
in 1994, because the space was totally occupied by the United
States and the international financial institutions.
The coup d'etat marginalized the population with respect to
the government, and they have remained marginalized. That is why
we say the structural adjustment program in Haiti is a veritable
MM: Did Aristide make a mistake in accepting the U.S. principles
Chalmers: Yes and no. The error was in the application. Aristide
was like a prisoner of war in Washington. An accord signed under
such conditions could not be valid. Aristide was separated from
the population. He could not consult with them. What he should
have done, once he returned to Haiti, was to submit these accords
to the Haitian people. The error that the Aristide government
made was to continue the process of marginalizing the population,
and to allow only the politicians to participate.
We must also recognize, however, that for both the Aristide
and Preval administrations, the strategic options are limited
because of the government's financial dependence on international
institutions. In November 1995, when Prime Minister Werleigh courageously
attempted to bring about certain changes, the response from the
international community was brutal. U.S. AID abruptly withheld
the funds already approved for food aid and the international
financial institutions followed suit by withholding funds (for
support of the balance of payments account) which had been previously
MM: Could Haiti forswear aid, conditionality and go its own
Chalmers: For the Haitian people, saying yes to this question
is also making a choice to change the traditional way the state
has been governed. Haiti depends on foreign donors for 85 percent
of its investment budget and 45 percent of operating expenses.
For example, they talk a lot about austerity measures, but
there are people in government who are paid $10,000 to $15,000
every month. Usually after these people serve as ministers, they
are guaranteed some kind of consultative position with the International
Monetary Fund or the World Bank and will be paid very high salaries
for the rest of their life. If it turned down aid, Haiti would
have to make the political choice not to maintain these sorts
of salaries and arrangements.
It is estimated that the operating budget of Haiti is roughly
$1 billion. An economist friend of mine (M. Webster Pierre) calculated
that a restructured Teleco could earn $1.2 billion a year.
So there are ways to get out of this cycle of dependency,
but they involve a serious striking of an alternative development
plan. In Haiti, we have been fortunate to have very serious, rigorous
thinkers who have come up with the best econometric models to
calculate alternative approaches that would break the cycle of
To realize these alternatives, we need to develop the political
alliances at the national and international levels so that we
can launch a new development plan-not one within a logic of autarky,
but one that addresses the national priorities of the country
and that could lead to our participation in the world market.
Years Is Enough
World Bank, Structural Adjustment
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