THE LOAN THAT WASN’T

Part One of a Series

By William Fisher

In Haiti, now close to the one-month mark since the devastating earthquake of January 12, victims continue to perish from a variety of causes, including death by red tape: they fall between the cracks of a still-poorly- uncoordinated aid effort. The physicians working in Haiti call these “the stupid deaths” – by which they mean avoidable.

Yet amidst the chaos and suffering that inevitably accompanies natural disasters, there are people who are beginning to plan for Haiti’s future. And, for many, their optimism is rooted in the miserable performance of international assistance in the past. Against that background, they say, they have nowhere to go but up.

It is an unusual combination of optimism and realism that is driving development experts to try to shed the blemished history of international aid to Haiti, rid the issue of a generation of devastating politicization, and think way outside the conventional development paradigm.

The fate of one particularly important project is emblematic of factors that have consistently and severely reduced the effectiveness – even the existence – of viable development projects.

Eric Michael Johnson of the Department of History at the University of British Columbia, told IPS, “The US role towards Haiti can best be understood as a kind of abusive paternalism, at times condescending and at others domineering depending on how fully Haitian governments obey the patriarch's dictates.”

To illustrate his point, Johnson told IPS what happened after the first coup d'etat and reinstatement of President Bertrand Aristide in late 1994 to a term that ended in 1996. This was followed by five years of René Préval (who is also President today). In 2000 Aristide once again won overwhelmingly in the Haitian elections. Aristede’s second election did not please the new American President, George W. Bush.

Johnson then recounts how the Bush Administration conspired to cut off funds already appropriated for a vital infrastructure and public health project.

An award of $146 million dollars from the Inter-American Development Bank (IDB) had already been approved, but at US insistence was not being disbursed. Some $54 million of this loan was intended for desperately needed water and sanitation projects. Johnson says, “This decision likely resulted in the needless deaths of an untold number of poor Haitians.”

In 2006, the Robert F. Kennedy Center filed a Freedom of Information Act Request to force the US to release documents related to this decision. According to the documents, “there was clear evidence that the United States blocked the loans because they objected to the election of Aristide,” Johnson says.

The IDB approved these loans between 1996 and 1998, and Haiti paid around $10 million in interest even before the loans were dispersed. By 2001 there was no reason for the IDB to continue blocking these loans. But block them they did.

The loans were not disbursed and, on November 8, 2001, the Congressional Black Caucus wrote to President Bush stating that "it is wrong to impose an inflexible policy which conditions US relations and aid, be it loans or grants, entirely on a country's political process" and insisting that "it is imperative that the US remove its blockade of essentially all aid to Haiti, particularly the loans currently held up at the Inter-American Development Bank."

The US – the largest contributor to the IDB -- continued to put roadblocks in the way of disbursement of these loans, even while Haiti was paying interest on the loans it hadn't received. In 2002 Haiti stopped payment.

A study published in the journal “Health and Human Rights” stated: "Public statements by US government officials soon explicitly linked non-disbursement with political concerns. In early 2002, the journal concluded that the IDB did not intend to disburse the loans, and the Haitian government suspended interest payments.

Haiti’s loan arrears rendered the loan ineligible for disbursement meaning, Johnson says, “the US government’s plan to slow disbursement succeeded in blocking the loans indefinitely."

The bottom line, Johnson says, is that these loans were denied to Haiti “because the Bush Administration objected to Haiti’s internal politics, a decision that violated the IDB’s charter.”

He adds, “The development loans were being used as a weapon to oppose the government of Jean-Bertrand Aristide. Even after the loans were finally approved in 2003 (primarily because of Congressional pressure) the water projects were only moving into their implementation stage by mid-2007.

The lack of clean water has seriously impacted health, Johnson says, noting that at least 84.4 per cent of households had experienced at least one case of infectious illness.

This is a situation, Johnson says, “that could have been different.” He believes, the U.S. “shares significant responsibility for this and owes the people of Haiti for the decisions of past administrations.”

Writing in The Huffington Post, Johnson notes that "Haiti has a historically unhealthy dependence on foreign commerce and finance, from the colonial days of the sugar trade to the current assistance provided by developed countries."

"Now the same politicians and financial elites that helped create this mess are proposing an even larger program following the same mode," he says.

But he is quick to point out that “the Haitian people are not children and they can effectively manage their own affairs if given the chance to do so.”

Johnson’s point of view is echoed by USAID itself, which says, “It will be important that Haitians themselves assume responsibility for and full ownership of their future. Government, civil society and the business sector should lead the setting of the national development agenda.”

An encouraging variety of Haitian and International development professionals is now working to craft ideas for rebuilding projects that are necessary, practical and fundable. Most development professionals say that, unlike projects in the past, these initiatives should not be U.S. creations alone, superimposed on Haitian needs or programs that favor the elites only; participants are hopeful they will bear the fruit of sustained cooperation between ordinary Haitians and the international community.

The next installment of this series will describe some of the specific development initiatives undertaken by the U.S. and international institutions and donors.