Saturday, September 16, 2006

Capital's priorities in Haiti.

There is a useful resource for investors provided by the PRS Group, who supply annual reports on individual countries for businesses all over the world. The PRS group analyses risk factors for investment, and merely proceeds with the understanding of what capitalists require. It isn't politically biased in the conventional sense, but its value judgments and analyses reflect the interests of the class it serves. This isn't a free service, but you can get access through colleges and universities via the 'Business Source Premier', a sort of LexisNexis for curious capitalists. Their Political Risk Yearbook: Haiti Country Forecast for 2006 (which in fact is updated only to late 2005) makes inspiring reading and, although they insist that reproduction without their written permission is "strictly prohibited", I can quote with fair use provisions. Not that I give a flying fuck in a high wind at any rate.

One of the big problems for investors in Haiti is the post-coup electoral procedure. They worry that "Were Lavalas to participate fully, there is a good chance that the party could win against the now-fragmented parties that helped to force Aristide from power." They add that "the climate for business is dim" because legislators will "resist making any moves that threaten to increase unemployment, which is already running in excess of 60%", so "The most that can be expected is some new legislation providing additional incentives and tax breaks for foreign investors". The US coup produced the highest regional inflation rate next to the Dominican Republic, and a massive contraction in the economy, but the business community can look forward to some decent economic results either from a "divided government" or a "reformist coalition".

They are disappointed by the UN's performance, lauding the "impressive body count" ratcheted up by the Minustah forces against the "armed radicals affiliated with FL", but noting that it hadn't brought about "stability". They note that the US has relied upon a "robust approach from Minustah" but insist that American troops may have to be sent in much larger numbers.

They are particularly anxious for the passage of "modifications of the Commercial Code, the Customs Code, and the Investment Code. Other bills awaiting passage concern tax and banking codes that will favor foreign investment." They enthuse that "Privatization has been proposed for firms in the telecommunications and electricity sectors, as well as port and airport facilities", but await "legislation to create a regulatory framework for the telecommunications sector, a prerequisite for privatization of the national telephone company, Teleco". There is a remarkable political realism throughout: FL was overwhelmingly supported prior to the coup, they note, with the poor embracing "Aristide's criticisms of the economic reforms proposed by the US and
international financial institutions" and that "the FL held all but one of the 20 filled seats in the 27-member Senate, and all but 10 of the seats in the 82-member Chamber of Deputies".

The report discusses the country's ruling class, an elite comprising "only 1% of the population": "A few mixed-race families control the country's industrial parks and its facilities for manufacturing and assembly. The majority flourished during the US occupation of the 1930s and survived the terrorism of the first Duvalier regime under 'Papa Doc' Duvalier. Some of these families control sumptuous assets, divided among investments in Haiti, the US, the Dominican Republic, Puerto Rico, Panama, Venezuela, and France."

It openly speaks (with some distaste) of the class struggle which has frustrated the implementation of the reforms that the international capitalist class (or 'global investors' or 'the business community' or whatever euphemism you prefer) demand, but notes that the post-coup regime "has taken initiatives in economic and monetary policies as well as governance and transparency to pave the way for new investments. Such actions include reducing interest rates to facilitate access to credit, the implementation of a trade facilitation unit, and an effort to enhance the dialogue between the public and private sectors." The Haitian parliament was already on its knees in 2002, they note, passing "an investment law prohibiting fiscal and legal discrimination against foreign investors", but sadly some industries "still require special government authorization. Investments in electricity, water and telecommunications require both government concession and approval. Additionally, investments in the public health sector must first receive authorization from the Ministry of Public Health and Population." Still, taxes are terribly low, and most people can expect to pay hardly anything at all. Only incomes over $750,000 will pay as much as 30%. IMF programmes and WTO recommendations are discussed in some laudatory detail.

None of this is especially revelatory, although the detail is interesting. The capitalist class gets a relatively realistic picture of situation in Haiti from such reports, as compared to readers of the US press or viewers of British news channels. This report at points reads like some samizdat publication with value significations reversed. They're open: they want to crack open Haiti's markets, suppress the insurgent working class, enforce neoliberalism, beef up 'property rights' and sell off all state assets. They want US troops in there, and they want either a divided government or a 'reformist' coalition that will deliver what they want. Written before the elections that saw Preval's remarkable victory, despite rigging attempts, they anticipate that the capitalist class's most sympathetic political allies will easily lose and that any result will be marred by fixing allegations, and so they rely upon the likelihood of a divided government, and the armed suppression of the Haitian working class. It is in this light that one should understand the World Bank's Latin American and Carribean director and her demands that security and development should go hand in hand.