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There's Real Hope From Haiti and It's Not What You Expect
When people live so close to the edge, even small price increases can break them
In the weeks after a disaster like the Haiti earthquake, journalists always search for an upbeat twist to the tale. You know it by now – the baby found alive after a week under wreckage. But this time, a shaft of light has parted the rubble and the corpses and the unshakeable grief that could last for years. In the middle of the Haitian people's nightmare, a system that has kept hundreds of millions like them poor and broken might just have shown its first fracture.
To understand what has happened, you have to delve into a long-suppressed history – one you are not supposed to hear. Since the 1970s, we have been told that the gospel of the Free Market has rolled out across the world because the People demand it. We have been informed that free elections will lead ineluctably to people choosing to roll back the state, privatise the essentials of life, and leave the rich to work their magic for us all. We have seen these trends wash across the world because ordinary people believe they offer the best possible system.
There's just one snag: it's not true. In reality, this gospel has proved impossible to impose in any democracy. Few politicians have believed in its core tenets more than Ronald Reagan and Margaret Thatcher – yet at the end of their long terms, after bitter battles, the proportion of GDP spent by the state remained the same. Why? Because these doctrines are extremely unpopular, and wherever they are tried, they are fiercely resisted. There are majorities in every free country for a mixed economy, where markets are counter-balanced by a strong and active state.
The gospel spread across the poor world because their governments were given no choice. In her masterpiece The Shock Doctrine, Naomi Klein shows how these policies were forced on the world's poor against their will. Sometimes rich governments did it simply by killing the elected leaders and installing a servile dictator, as in Chile. Usually the methods were more subtle.
One of the most marked came in the form of "loans" from the International Monetary Fund(IMF) and the World Bank. The IMF would approach poor countries and offer them desperately needed cash. But from the 1970s on, they would, in return, require the countries to introduce "structural adjustments" to their economy. The medicine was always the same: end all subsidies for the poor, slash state spending on health and education, deregulate your financial sector, throw your markets open.
Here's a typical example of what happened next. In Malawi, the country's soil had become badly depleted, so the government decided to subsidise fertiliser for farmers. When the IMF and World Bank came in, they called this "a market distortion", and ordered Malawi to stop at once. They did. So the country's crops failed, and famine scythed through the population. Tens of thousands starved to death. The Malawian government eventually listened to the cries of its people, kicked out the IMF, and reintroduced the subsidies – and the famine stopped that year. The country is now an exporter of food again.
When people are living so close to the edge, even small increases in prices can break them. The IMF systematically disregards the fact that every country that has lifted itself out of poverty has done the opposite of its commands. For example, South Korea went from poverty to plenty in just two generations by protecting and heavily subsiding its industries and jacking up state subsidies – to the IMF's horror.
Even Professor Jeffrey Sachs – one of their former lackeys – calls the IMF "the Typhoid Mary of emerging markets, spreading recessions in country after country". So why do they carry on like this? Primarily, it is because IMF programmes work very well – for the rich. They ensure that we get access to the cheapest possible labour and can help ourselves to the glistening resources that inexplicably ended up under their soil.
The serve-the-rich ideology that caused our economy to crash in 2008 has been crashing poor countries for a long time. But there's a sting. After decades of ordering poor countries to slash subsidies and state spending, the IMF reacted to the recession by urging rich countries ... to spend a fortune subsidising the banks, and to increase state spending. They wouldn't dream of drinking the medicine they have been serving out to the poor for so long. It's not as if the IMF has learned from its mistakes: it has just forced countries from El Salvador to Ukraine to Pakistan to sign deals committing themselves to leave the state inert in the face of severe external shocks to their economies. No: the IMF only imposes its deadly prescriptions on those too weak and too distant to matter.
Here's where Haiti comes in. The IMF agenda has often been forced on populations when they are least able to resist – after a military coup, a massacre, or a natural disaster. For example, the people of Thailand fought for years against clearing their locals off their beaches to make way for holiday resorts, and voted against the privatisation of water and electricity. But immediately after the tsunami, both were pushed through.
After the earthquake, something similar was poised to happen to Haiti. The IMF announced a $100m loan, stapled on to an earlier loan, which requires Haiti to raise electricity prices, and freeze wages for the public-sector workers who are needed to rebuild the country. So when people emerged from the rubble, they would find an economy rigged even more heavily against them.
There is no doubt about what the Haitian people would think: they know the IMF. Until 1994, the country at least grew its own staple crop: rice. But the IMF came in and ordered the government to cut its rice tariff from 35 per cent to 3 per cent. Suddenly the market was flooded with rice grown in the US by hugely subsidised farmers, and Haiti's rice farmers went bust. Hundreds of thousands swelled to the slum-cities and sweat shops of Port-au-Prince, where they built mud huts – and were buried in 2010. The IMF reduced the country from self-sufficiency to dependency, in a move known locally as "the Plan of Death". It was one of the external political earthquakes that made this natural earthquake far more deadly.
But something new and startling happened this month. For the first time, the IMF was stopped from shafting a poor country – by a rebellion here in the rich world. Hours after the quake, a Facebook group called "No Shock Doctrine For Haiti" had tens of thousands of members, and orchestrated a petition to the IMF of over 150,000 signatures demanding the loan become a no-strings grant. After Naomi Klein's mega-selling exposé, there was a vigilant public who wanted to see that the money they were donating to charity was not going to be cancelled out by the IMF.
And it worked. The IMF backed down. It publicly renounced its conditions – and even said it would work to cancel Haiti's entire debt. This is the first sign that exposing and opposing the IMF's agenda works. Klein says it is "unprecedented in my experience, and shows that public pressure in moments of disaster can seriously subvert shock doctrine tactics." Of course, the IMF needs to be watched vigilantly. Already it seems to be rolling back some of its panicked initial rhetoric and saying that "beyond the emergency phase" it may go back to business as usual. Very powerful interests want the IMF to continue to dance to their tune.
But thanks to all the ordinary Europeans and Americans who pushed back, Haiti will not be IMF-ed up now, in its darkest hour. Not this time. Not these people. Not again. These should be the first baby-steps of a campaign to finally stop the IMF's poverty-promoting machine steam-rolling across continents. On the political Richter scale, that would mark a 7.0 – for the causes of democracy and justice.
30 Comments so far
Show AllThank-you for a fine, straightforward account of what the "libertarian" program of "free market" structural adjustment does to the worlds poor. The global anti-capitalist movement, the Spirit of Seattle, Goteborg, Genoa, Quebec, and Porto Allegre, needs to re-awaken from it's 8 year slumber. Onward to popular democracy!
If we could tally the number of people who have starved, died of dieease, or preventable natural disaster deaths from this and other capitalist predations, it would exceed those "death toll of communism" tallys that right-wingers like to compile several times over at least.
And, we aren't even including the state-crimes, military and other, that are part-and parcel of the capitalist syatem. That alone amounts to over ten million killed since the end of WW2 - most directly attributable to the United States.
It certainly is heartening to hear that a progressive critique of neo-liberalism goes beyond the blogosphere into the policymaking board room of the IMF. Sometimes when you can label a thing that has had only a vague reality in the minds of people, you can open up new possibilities of countering that "thing." Who can really feel indignant about such diffuse concepts as "neo-liberalism" and "structural adjustments?" (Don't they even have the sound of something very good?) But, thanks to Klein, the same realities can be re-labelled as "shock doctrine" applied in a time of "disaster capitalism." Who could be sympathetic with vultures hovering over the dead meat produced by wars or natural disasters? By "calling out" by name the IMF's intentions for Haiti, there has been a temporary (at least) suspension of that agency's normal mode of operation. As Hari notes, the IMF shows already the signs of reneging on their agreement to put aside structural adjustments for Haiti, but with these and other vultures continuing to hover above the carnage in search of "opportunities," this may be one skirmish won in a lengthy war to restore to people in third world countries their birthright of self-determination.
Right On!
International populist response and activism may well be the answer to many of the world's deepest problems. It's wonderful to see (and to have the world see) how ordinary caring citizens from near and far CAN make a difference in what is OUR world, after all.
International response and activism is the *only* way these problems will be solved. In fact without the people on the other end on board, that is, the Haitians in this case, nothing lasting will ever happen. Though the events in this article are good news, the IMF and neo-liberalism survive. It will take much much fundamental change to defeat them. And we should expect that change to come from the places that are suffering the most as a result of these policies. Places like Haiti.
If I remember correctly, the US Senate also proposed loans with conditions. There was public opposition and some legislators proposed grants instead. I am not sure how that came out. Anybody know?
Ray Berthiaume
I really enjoyed reading of this victory. Very heartening!
We need to be vigilant. I read Shock Doctrine and once you understand Naomi Klein's thinking it's very easy to see how a catastrophe like the tsunami led to theft of the Indonesian coastline for development; how the 7.0 earthquake in Haiti can and will lead to further deepening of Haitian misery and further wealth of western nations as we steal their resources; how the shock of war in Iraq, Afghanistan, soon to be Pakistan and Yemen will lead to shocks that will create tremendous imbalance for citizens while their resources are being stolen by the U.S. I can't believe what my country is doing.
Wonderful article. Too bad it has to come from the UK, and not published in the American press. I bet not one word of this enlightning story is told anywhere in the MSM in the US. Most Americans do not even know what the IMF is and the international crimes they commit. Most people here think Reagan was one of the greatest modern-day presidents. Need I say more?
On further consideration (Department of Cold Water):
As welcome as this "news" certainly is, it is almost identical with the "news" about the IMF and Haiti's debt which tracks back at least as early as July 1, 2009. At that time the same Jubilee Network USA group that is now celebrating the victory of Naomi Klein's facebook operation in pressuring IMF's lifting "structural adjustments" requirements of their Haiti loan extension (or grant) was already celebrating a similar decision at that time to cancel Haiti's international debt.
http://omiusajpic.org/2009/07/01/haitian-debt-cancellation/
Maybe IMF's recent statements and actions are something different, but it smells like the same "victory" that was achieved (or was it?) at least 7 months ago: way before Klein started her Facebook operation which was motivated by the January earthquake. At the very least this apparent vacillation of IMF between what it says it is going to do and what it actually does indicates that these peiodic "victories" will be meaningless unless attention is continually repaid to what the IMF does as well to what it says it is going to do. (Somewhat as if the IMF were the Obama administration.
You are right, phoenix20. The mendacity of these financial exploiters does rival that of the Obama administration.
I can remember an instance around 1992, when the then head of either the IMF or the WB (I don't remember which), a Mr. Preston, made a statement carried in the press, to the effect that the neoliberal policy of forced structural adjustment was having a negative effect on developing economies and societies and would have to be changed.
I silently applauded the wisdom of this statement, and here we are 18 years later, still waiting for the revised policy to be put into place.
I sincerely hope I'm wrong in expecting the same lying business as usual from these vampires in this Haitian situation.
The problem is not the IMF and the World Bank (or, for that matter, the WTO or the BIS -Bank for International Settlements). The problem is the governance structure and leadership and voting-power profile of these organisations. It is simply a sin of intellectual laziness to argue that the IMF and World Bank are, per se, the cause of recessions or the culprit for the perpetuation of less-developed countries in poverty. Even Malawi and Malaysia and Turkey and India, countries that have, at certain times, successfully defied the IMF and World Bank, have also benefited greatly from these istitutions' advice and funding at other times. Economists (I am talking of practitioners of mixed-economy economic theory -- which is the type that underpins IMF/WB prescriptions most of the time {agreed, maybe not all the time, but most of the time, depending on the agenda of the Execitive Directors of these institutions' board that hold the largest bloc of votes), cannot rely, in the exercise of their art-cum-science, on the beneficiaries of their prescriptions to cooperate in their healing, the way medical doctors can rely on their patients and their body's immune system to do. On the contrary, the more articulate operators of an economic system try to outsmart the policy-maker for their own material advantage. So, there is both the science and the art and the strategic manipulatios and politics that come into play. The array of instruments, intermediate goals and ultimate outcoes that the policy-designer or programme-designer is subject to acceptance, rejection, modification and pervert twists by the Executive Directors who hold the largest power bloc. They IMF/WB liberalisation programmes have enabled India and Chia to propel themselves to the high-growth path which have lifted hundreds of millions out of debilitating poverty. These countries chose liberalisation the same way that Brazil, Argentina, Mexico, Turkey, Malaysia on certain occasions did and on other occasions rejected. At one point, Claudio Loser and his team, at the IMF designed a mixed economy structural adjustment programme for Argentina to both manage its foreign debt and engineer growth quite similar to the oe that current letist idol Cristina Kirschner is now pushing and has caused her Central Bank Governor to resign. But it was shot down by the high-voting bloc Executive Directors (the US and Western Europe), who sent back Claudio Loser to work on a Reaganite/Thatcherite programme. When that programme went sour after a few months or a couple of years of implementation,it was Caludio Loser and his team who got the boot. The culprit Executive Directors went back to Washington or London or Berlin or Paris to be promoted to even more powerful positions.
So, blaming "the IMF and World Bank" is disingenouous. Even Joseph Stiglitz, who had been Chief Economist at the World Bank would not mke sch blanket statements. Even blaming the Head of these institutions won't is criminal. Recently, soon after Domique Strauss-Kahn, Head of the IMF, expressed his sympathy with China's position that the voting power structure and other governance dimensions of the IMF/WB should be revisited to reflect the new importance of emerging countries in the world economy, obscurantist forces pulled out on him a supposed scandal about a minor tryst e had with one of his feamle colleagues. Nobody has any proof that A caused B. But Strauss-Kahn was chastened -- to the detriment of smoother adjustment of the global economy to world financil turmoil!
You are entirely wrong. They are the problem.
Judge by the results. Every country that has followed their prescription (reduce tariffs, open up the market for competition, reduce spending on infrastructure - paricularly education - to service their debt, and so on) has gone down. Every country that has done exactly the opposite has improved.
This is not to say that every economist that ever represented them fits the robber baron profile. There are a (depressingly) few people who have realised what is going on, and try to change things, but they either resign or are more likely resigned. The organisations were set up to rob from the poor and give to the rich, and they do it very well. They are not going to change -- they are not democratic, their constitutions (perhaps with the exception of the WTO, but it isn't going to) do not allow it. They must be disbanded. There is a better system, or many, which does or do not involve playing beggar-my-neighbour.
Your compulsive sophistry and deliberate obfuscation, not to mention your thoroughly inept spelling/typing, aren't gaining any converts here to the purity of heart of the IMF or World Bank. I've never read such inflated bureaucratese in my life, and I've read some. Go back to your IMF cubicle. The Haitians will hopefully burn down your evil house one day.
Thanks. But, I don't have time to preview my comments and edit. I am not even interested in writing books after the event to collect royalty. I did my very best while on the job, without even worrying about advancement. But, we need a critical mass. Read "Critical Mass : How Things Happen", instead of HOPING that, one day, Haitians will "burn my evil house".
Sioux Rose
EPHRAIM: It's probably one of "the usual suspects" wearing a new screen name. What's amazing is that these imbeciles put their stupidity on display like grossly overweight contestants in a swim suit contest! UGH.
Sioux Rose,
I welcome your rebuke "imbecile". I have another comment dated February 7th, 2010 at 9:29 am, but you would not care.
"The problem is not the IMF and the World Bank (or, for that matter, the WTO or the BIS -Bank for International Settlements). The problem is the governance structure and leadership and voting-power profile of these organisations."
Well *there's* a fine distinction to draw! What *is* the IMF, anyway, if not its governance structure, leadership, and voting-power profile?
Haiti's economy was already at or past the optimal neoslavery point just before the quake. The quality of the buildings was all hollowed out, "government" is a synonym for a loose association of crooks, the people were all hungry except for the prostitutes working the Yankees in the pleasure dome zones, the Tonton Macoutes gangs were in full commmand with the CIA's blessing, killing anyone who objected to their nation's slavery or hunger, and every tree had already been stripped from the country forever, except at the Dominican border where a few seeds might blow back into Haiti. Haiti is already a global warming paradise.
The IMF is merely guilty of overkill. They backed off this month, knowing that they can impose all of their newer ideology-driven tariffs onto the prostate slave population in three months, after all the ruckus dies down and people once again live under plastic sheets and eat 500 calories a day.
Those 10 American missionaries who are all charged as a group with human trafficking, maybe their entire church back home is a massive wacko kidnapping cult, or maybe the Haitian "government" just wants a big bribe. We'll see.
It could be that the flaming corruption in Washing-town licks and lights up the corruption in other corners of the globe.
"Those 10 American missionaries who are all charged as a group with human trafficking, maybe their entire church back home is a massive wacko kidnapping cult, or maybe the Haitian "government" just wants a big bribe."
My guess is both.
Joe
Fuzzytruth: your command of specifics is impressive. However, the obvious fact of free vs. fair trade is that there are a few of us who feel entitled to far more than our fair share of the world's goods and will use natural disasters to further their hold on getting more for the have-mores.
The IMF, WTO, and World Bank are vehicles of manipulating people and government so that the powerful stay powerful and become ever more wealthy.
The heart of the world's people runs quickly with pity for Haiti's dead and the survivors. Not even the IMF, WTO, and World Bank would be so ignoble as to further embarrass Haiti.
Wouldn't it be wonderful if this impulse leads us to see that we must denounce our previous lies about Mr. Jean-Bertrand Aristide and allow his return to the Presidency.
Thanks for the compliment. But I am afraid that, if Aristide is allowed to come back, the abuses that he had been guilty of during his second term of office (his first term in office was, overall, constructive for Haiti's development, including red8uction of inequality) will be repeated, if not aggravated. What happened bewtween his first term and his second term is a phenomenon that happens to many so-called leaders -- the phenomeneon that "the ancients" have captured in the age-old wisdom that "power corrupts". In Africa, it happened to both Milton Obote of Uganda and Dos Santos of Angola -- very encouraging first term, disastrous second term.
It is a very-deeply hurting insult to the people of the developing world to assume that their younger generations cannot produce better leaders than those who have so badly fouled up in the past.
Elections are due in 2011. Haiti may be blessed with the return of the many capable and honest people among its diaspora. Among those who have struggled inside the country, there may be even more capable leaders that will emerge. Why insist on a flawed Aristide?
Why insist on a flawed Aristide? Because they elected him and it's their business. Any alleged flaws of a leader, good, bad or indifferent, cannot be an excuse for an outside imperialist country to depose him and install a puppet kleptocracy.
Joe
Thanks for the article. It speaks truly, except for one point, namely IMF=USA. It is the USA that has oppressed, suppressed, extorted, stolen, forced these people to remain slaves for over 200 years, not IMF, USA. Only if the push-back you spoke about becomes permanent will this issue have a chance of being settled, and one has to wonder if it ever can be settled with Bill Clinton, Mr. IMF USA, in charge down there (via the UN, another extension of the US government).
There's a chaotic churn of activity among global elites, large and small, jockeying to sink their mob fangs into the downed beast. Meanwhile average USans think it's the beasts' fault for not running fast enough.
We should not forget who/what the IMF really is: an American organization strictly defending American interests - no more, no less. IMF = Instant Misery Follows
I completely accept the analysis of Naomi Klein and John Perkins (Confessions of an Economic Hit Man). But they both leave out one important thing: some leader of a government the IMF later imposed austerity programs on, pledged his country's future/the workers' wages to borrow the money in the first place. Maybe like the maid who purchased a $400k house with a subprime loan, through some wishful thinking, he thought they'd be able to pay it back. Or maybe he just didn't give a shit.
But some "leader" took out the loans. Unless those leaders took out the loans for some devastating disaster, those leaders are the real scoundrels.
PS: Do you have any concept of the huge debt our US scoundrels have taken out in our names? (and what disaster have we had--the loans weren't taken out after Katrina)
You make a very good point, miamigreek. What Naomi Klein and John Perkins are not completely candid or thoroughly logical about is : writing off the debt that poor countries and or countries that had been ruled by dictators/authoritarians implies asking where does the money come from. The IMF/WB borrow on internationl capital markets and have to repay the debts they themselves contract. One answer would be to seize the assets of dictators who have stasjed the money in accounts in offshore tax havens. But this would recover only a small fraction of the misused funding that IMF/WB originally provided. The bulk of the funding, sadly, went into puschasing weapons to fight insurgencies and providing bribes to powerful militray-forces-linked cronies and other high officials to secure their loyalty. Reframed in this light, the problem of development becomes the trite but inescapably true proposition : how to turn guns into plowshares? how to stop human greed and corruption? We are making progress in engineering the tools to achieve that age-old human ambition, but it is a project that will take decades to achieve. It takes that long because it involves changing what some evolutionary biologists call "memes" -- a putative unit of cultural ideas, symbols and practices, akin to the biological unit gene, which can be transmitted from one individual mind or "collective mind" to another through speech, gestures, rituals or other imitable phenomena. Most professionals working for the IMF and World Bank, and indeed, for their regional equivalents (The Asian Development Bank etc) consent an unbelievable amount of time, energy and goodwill, sometimes exposing their lives to danger, to help developing societies graduate up the ladder of economic well-being. But they have to work within the boundaries of mixed-economy frameworks, because there is no other better form of economic organisation.
Your analogy with the purchase of a $400k house with a subprime loan is appropriate. These loans were on offer, and still there are those of us who were wise enough to adamantly refuse them. After having worked for the African Development for about thirty years and retired to Canada five years ago with savings two-thirds of which were wiped out in the Wall Street debacle (which I saw coming but could do nothing about even for my own investments), I am living on a reduced pension that does not allow me to run a car of my own. Fortunately, I don't need one and my wife, who is still working, pays for my three childrens' college eduication. But, for decades to come, my children will pay taxes to reimburse the debt that has been contracted in order to avoid the Great Recession turning into the second Great Depression.
The ongoing, centuries-long, nearly-completed clear-cutting of entire cultures and the deaths of tens of millions every year by brutality and neglect, invasion, impoverishment, enslavement and toxic dumping isn't a devastating disaster?
Then what is?