GOLD! (and other Haitian liabilities)

Haitian road worker near Trou-du-Nord

So for those who don’t keep up with the news on Haiti, gold and copper have been found in promising sample quantities following test drilling in the north.  Estimates for the total recoverable value of the find range up to $20B.  Ironically, this sum is almost identical to the inflation-adjusted $21B that Haiti’s former president and international gadfly, Jean-Bertrand Aristide, demanded from France in 2003 as reparations for a 19th-century debt imposed upon the Haitian government for having stolen French property, including themselves, as they had been slaves.   (Many speculate that Aristide’s importunate demand may have piqued the international community into supporting the “revolt” that toppled the government early the following year.)

Responses to the find have ranged from the naively enthusiastic (“[h]ere’s praying this recent find of precious metals will be the long-awaited windfall the country needs to finally get on its feet”) to the skepticism underpinned by the phenomenon that is the namesake of this blog.  Falling into the latter category is the well-researched AP news story which, of necessity, quotes UCLA’s Michael Ross (“The great irony of mineral wealth is that those countries that most desperately need infusions of mineral revenue — low-income countries with weak governments — are also least likely to manage these resources wisely”), and dwells quite a lot on the question of corruption in the Haitian government and how it might affect the likelihood of environmental disasters and the benefit ordinary Haitians will see from the mining boom.  To its credit, the AP story even makes allusion to the gold trinkets that the native Tainos (called Arawaks in the article) wore when the Spanish arrived, and the brutal genocide brought about largely as a result of forced labor in gold mines.

Strikingly, a Canadian mineral exploration firm was able to buy on the cheap all the shares in the Haitian mining company with the appropriate permits in the immediate aftermath of the 2010 earthquake.  The AP article cites an almost unbelievably bald statement by the company’s president:

“Investors want to get in at the bottom,” said Dan Hachey, president of Majescor Resources, the Canadian company, “and I figured after that earthquake, Haiti was as low as it could get.”

The media emphasis has been on the economic improvements that Haitians may see, or even have already seen, in terms of construction jobs and new roads – even though many of these “new roads” presumably lead only to remote mountains, soon to be turned into remote, heavy metal-contaminated lakes upstream of less-remote tailings dams.  And though that may sound cynical, the lack of regulatory environmental protections (or even the officials and agencies to enforce them) in Haiti is worrisome.  Dan Hachey believes that the earthquake will have the effect of tightening regulatory corporate oversight and improving government accountability, because of the “$10B” in aid that the international community has pledged to the country for recovery efforts.  That argument might hold if (a) the $10B in aid were actually going to the government of Haiti in the first place, and (b) the international community had ever cared about the Haitian government’s accountability (at least in the sense of being accountable to its own citizens).

On the first point, see this.  Basically, the World Bank is the arbiter of how, and on what projects, those monies get spent.  The disbursements are made through a majority-foreign Commission Intérimaire pour la Reconstruction d’Haïti.  The country that came to be known in the 1990s as “the Republic of NGOs” is now “the Republic of NGOs and Other Republics,” its sovereignty once more trampled beneath the heavy hooves of foreign interests.  This time, though, the international community can feel better about itself for having done so: after all, it was a natural disaster (bad luck!), and it crippled the (already weak/ corrupt/ inept) government.  It’s just lucky Haiti could count on us!

On the second point, the “international community” has always cared far more about having a Haitian government that was favorable to ownership of Haitian property by foreign corporations, low or no corporate taxes and import tariffs, and low minimum wages, than about accountability to the people of Haiti.  These were the motivating factors behind the blatantly racist US occupation of 1915-1934 (during which time the 1918 law rescinding the ban on foreign property ownership was passed by way of a “plebiscite”), and they were the same in the decades of US support for the Duvaliers, père and fils.  How else to explain that regular and substantial embezzlement of state funds that occurred under both regimes and with the knowledge of the international community, went completely without remonstrance.  For instance, of a 1981 IMF disbursement of $22M, $20M was withdrawn for the personal use of “Baby Doc.”  A US Department of Commerce report once indicated that fully 63% of Haitian government revenues were misappropriated each year, and yet the US continued to support Baby Doc right up to the point of facilitating his sumptuous 1986 exile in the south of France.

The same motivations underpinned the US’s 1994 reinstatement of Aristide on the conditions of government retrenchment, “flexible fuel pricing,” and overall “structural adjustment” that, in combination with domestic American agricultural subsidies, so predictably and entirely devastated Haiti’s rice agriculture, drove up consumer inflation, and deepened the already-grave poverty in the country.  Aristide eventually proved too troublesome, however, refusing to budge on the World Bank’s privatization scheme for nationally-owned companies, and later embarrassing France with his call for reparations, and so was dismissed.  After a 7-year exile, he is now finally back in his country, but too late to have run for office in 2010.  In his place is a man called a “stealth Duvalierist,” accused by the Left of supporting the Doc-era military and the  reactionary groups that carried out the 1991 coup and cracked down so brutally on Aristide supporters and the populace at large, and obviously favorable to the idea of inviting foreign corporations to “help” in the wake of the earthquake.

So is the exploitation of Haiti’s new found gold by foreign corporations going to change things in Haiti for the better?  Here’s praying.

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Filed under Economics/ Economic Development, Politics/ Political Economy

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