IMF to Haiti: Freeze Public Wages (The Shock Doctrine Begins)

[tekisui]

Source: The Nation

Since a devastating earthquake rocked Haiti on Tuesday--killing tens of thousands of people--there's been a lot of well-intentioned chatter and twitter about how to help Haiti. Folks have been donating millions of dollars to Wyclef Jean's Yele Haiti (by texting "YELE" to 501501) or to the Red Cross (by texting "HAITI" to 90999) or to Paul Farmer's extraordinary Partners in Health, among other organizations. I hope these donations continue to pour in, along with more money, food, water, medicine, equipment and doctors and nurses from nations around the world. The Obama administration has pledged at least $100 million in aid and has already sent thousands of soldiers and relief workers. That's a decent start.

But it's also time to stop having a conversation about charity and start having a conversation about justice--about recovery, responsibility and fairness. What the world should be pondering instead is: What is Haiti owed?

Haiti's vulnerability to natural disasters, its food shortages, poverty, deforestation and lack of infrastructure, are not accidental. To say that it is the poorest nation in the Western hemisphere is to miss the point; Haiti was made poor--by France, the United States, Great Britain, other Western powers and by the IMF and the World Bank.

Now, in its attempts to help Haiti, the IMF is pursuing the same kinds of policies that made Haiti a geography of precariousness even before the quake. To great fanfare, the IMF announced a new $100 million loan to Haiti on Thursday. In one crucial way, the loan is a good thing; Haiti is in dire straits and needs a massive cash infusion. But the new loan was made through the IMF's extended credit facility, to which Haiti already has $165 million in debt. Debt relief activists tell me that these loans came with conditions, including raising prices for electricity, refusing pay increases to all public employees except those making minimum wage and keeping inflation low. They say that the new loans would impose these same conditions. In other words, in the face of this latest tragedy, the IMF is still using crisis and debt as leverage to compel neoliberal reforms.

For Haiti, this is history repeated. As historians have documented, the impoverishment of Haiti began in the earliest decades of its independence, when Haiti's slaves and free gens de couleur rallied to liberate the country from the French in 1804. But by 1825, Haiti was living under a new kind of bondage--external debt. In order to keep the French and other Western powers from enforcing an embargo, it agreed to pay 150 million francs in reparations to French slave owners (yes, that's right, freed slaves were forced to compensate their former masters for their liberty). In order to do that, they borrowed millions from French banks and then from the US and Germany. As Alex von Tunzelmann pointed out, "by 1900, it was spending 80 percent of its national budget on repayments."

more: http://www.thenation.com/blogs/notion/517494/

[anonymous171]

1. Oh fuck me Klein was right.

:banghead:

[inna]

13. Of course, she was, and she is.

Have you seen any of her latest?

:(

[anigbrowl]

15. So how does last year's debt forgiveness fit into this?

As even the OP's article mentions, the majority of Haiti's external debt was cancelled just a few months ago. Contrary to what's being asserted above, international financial institutions have actually been working to lighten Haiti's fiscal burden even before this quake struck.

I think they should seriously consider going ahead and cancelling the rest of it in the light of recent events, but having written off something like 2/3 of the debt last year suggests that the World Bank, IMF etc., might not be such monsters as people perceive them to be.

[anonymous171]

16. Yes, but at the time I thought that she was just being overly paranoid

As I said before, fuck me.

[EFerrari]

20. Nope. And sending Junior, and forgive me, Clinton out there

as fundraisers just shows you how far down that road poor Haiti is.

[dotymed]

34. Naomi Kleins SHOCK DOCTRINE

has been spot on about everything that I am aware of. She has the blueprint that the greediest capitalists use. She is an amazing person.

[Odin2005]

2. WTF?

[louis-t]

3. Already, rumors have Wyclef Jean in 'scandal'.

Somebody, somewhere started a rumor that he was "keeping the money". Sound familiar? rusty limbaugh told his listeners that Obama was gunna "keep the money".

[Spider Jerusalem]

24. Actually it's more like his 'charity' had its financial documents come out.

And he comes off looking rather sketchy. Yele Haiti is in debt by hundreds of thousands of dollars and of the money it has brought in hundreds of thousands more have gone to paying Wyclef Jean's appearance fee for a 'charity' concert (which is fucking cosy if you ask me, a charity he runs paying for him to do a benefit show...and I sort of thought that the fees were usually *waived* for those? 'Charity concert' and all)...and paying money to a sound and video production company owned by, guess who? Wyclef Jean and his business partner for 'outreach services'. Things may change in the current tragic environment, but until now Wyclef Jean's so-called charity has the appearance of being more a vehicle for transferring money to himself than to the people of Haiti.

http://www.thesmokinggun.com/archive/years/2010/0114102wyclef1.html

[anigbrowl]

28. It's not a rumor, but based on a reading of IRS filings for his charity

Consider that the charity has been in operation for 12 years, but filed tax documents with the IRS for the first time in August...2009. Not so cool.

[louis-t]

48. Yikes.

[Ken Burch]

57. Let's face it, folks...this is STILL about punishing the home

of the world's ONLY successful slave revolt. The global white power structure still can't forgive Haiti for throwing off its chains.

Even when that white power structure has a black figurehead.

[happy_liberal]

4. K&R

nt

[tblue]

5. "Haiti was made poor--by France, the United States, Great Britain, other Western powers"

We owe them everything. We should be in their debt, not the other way around. I fear for the future of Haiti. Naomi's been proven right every time.

[dotymed]

37. AMNESIA

Certainly, since my memory is not really good, everyone remembers the 2004 Coup that was pulled off, by America,under King George. Haiti's President Aristede, who was a populist, (unfortunately, there were many warring factions in Haiti) Democratically elected President, was basically targeted for "extraordinary rendition" by Bush and his elite base. In 2004 our CIA staged a coup, advertised it as a grassroots movement, placed a hood on Aristedes head and had him sign away power while he was on the flight. Yes, Haiti has had a very volatile history, mainly because of the international elite's desire to manipulate this beautiful island nation. Aristedes major crime? It was refusing to abide by IMF rules that were imposed on Haiti as a loan stipulation.These stipulations included "privatizing" the islands utility companies, water, electricity..etc.., ya know, allowing the international corporations ( our Gods) to prosper from the misery and poverty of the poorest country in the Western Hemisphere. Exactly like our earlier failed CIA coup attempt in Venezuela, we turned up the propaganda machine. We attested to the Aristede corruption and the ensuing killing and torture (us?) of all dissenters. Amazingly, even after all of these crimes against humanity were revealed by our propaganda machine, a solid 2/3 majority of Haitians called for the return of Aristede. That must have been a mass incidence of "Stockholm Syndrome." Of course, Aristede, under penalty of death, was not allowed to return. Now, with this (much needed) $100 million "loan" from the IMF,after the horrendous (Devil induced) Earthquake that killed so many and devastated (again) this tiny island; the so far hapless bush puppet regime, will have to squeeze even harder. To insure that these grossly impoverished people (now there are quite a few elite, mainly ex-pats, who reside(d) there also). I mean, who else are these people going to pay for all of their privatized services? Gangster Capitalism is still alive, well and destroying the world. Change we can believe in? Pepsi, catch the wave. I'd like to buy the world a Coke.....

[truedelphi]

6. The information presented here is all good information

And the same reasoniong can be applied to how "the Greatest Middle Class on Earth" is kicked around until destitute by the continual loans from itself to the Biggest Bank fraudsters on earth.

We may well end up to see our nation rival the poverty and despair of that one. Give the Geithner/Bernanke policies another twenty years and I assume we will arrive at Haitian status.

[dixiegrrrrl]

44. I fear you are too too correct.

This country is so far in debt that we cannot repay it. It is as simple as that.
There is not enough money to pay what we owe along with basic minimal services to keep
the lights on, so to speak. And half that debt is the military machine, a growing expense.
For decades the USA and multi-national coporatists have enslaved whole countries with debt.
And now, yes, it does look as if we in America are becoming the new serfs.

[Mika]

7. In Haiti The Shock Doctrine has been underway for a long while.

What we are seeing re: the lack of representative government capable of organizing anything productive, is the result of ongoing and long term Shock Doctrine tactics.

---

[tekisui]

8. You are right, I should have said it continues.

[malaise]

11. 100% correct

We have a wage freeze in Jamaica as well.

[malaise]

12. By the way Naomi and Spitzer are on

Zakaria.

[truedelphi]

27. What is Zakaria? is it an internet radio show

Would love to know what you mean. I like seeing andhearing those two whenever possible.

[EFerrari]

30. He has a show on CNN on Sunday mornings.

http://www.fareedzakaria.com/

[EFerrari]

19. You bet. n/t

[malaise]

9. Meanwhile the French are in the process of canceling Haiti's debt

although that is a bit of a joke given how much France owes Haiti.

http://www.jamaica-gleaner.com/gleaner/20100117/lead/lead7.html
<snip>
France's Finance Minister says she has asked creditors of earthquake-ravaged Haiti to speed up plans to cancel its debt.

Christine Lagarde says she "made contact with all Paris Club members so we accelerate the cancellation of the government of Haiti's debt".

France is president of the Paris Club of creditor nations, an informal group of industrialised countries.

Lagarde said Friday she is also asking non-members Venezuela and Taiwan, who are owed significant amounts by Haiti, to help in debt reduction.

France was owed €58 million (US$84 million), of which €4 million was already cancelled. The rest was due to be cancelled in stages over several years until 2014. This will now be sped up.

[anigbrowl]

14. Actually, the IMF and World Bank already cancelled $1.2 billion (>60%) of their debt last year

http://www.dominicantoday.com/dr/poverty/2009/7/25/32705/World-Bank-and-IMF-cancell-Haitis-12-billion-debt

Kinda the opposite of the shock doctrine, in fact. So the picture is rather more mixed than the OP's article makes out.

[glitch]

17. Have you actually read the book? nt

[anigbrowl]

18. Yes. What's your point? /nt

[glitch]

21. It's an excellent read and you could learn a lot about how the process works.

Perhaps you should read it again.

[anigbrowl]

23. Maybe I already know about that and just don't share your opinion.

I'm not writing a press release for the IMF or world bank, both institutions suffer from numerous flaws and deserve plenty of criticism. But it's equally misleading to suggest they never do any good - $1.2 billion of debt relief (which is >60% of the country's debt) is a Good Thing.

The IMF isn't imposing new restrictions on Haiti as a condition of this loan. There's a loan facility in place with a variety of public administration conditions attached. Haiti's economy has been improving in recent years, despite disasters, partly as a result of the fiscal discipline they have been sticking to. That's why they had over 2/3 of their debt forgiven recently. The IMF extending more money by using the terms of the existing loan is because it's the fastest and simplest and least bureaucratic way to allocate them more money. Usually more money would come with additional strings to make sure it was spent wisely.

I mean look, suppose you were in debt to the bank, and you were skeptical of your bank's integrity. But suppose that in return for paying your bill on time every month, they actually stuck by a promise of theirs and wiped out 2/3 of your debt, and that when you suffered an accident through no fault of your own shortly afterwards, they immediately increased your credit limit. I wish my bank were like that.

Indeed, Haiti has historically been saddled with a bunch of debt it doesn't deserve. But on the other hand, the IMF and World bank were set up in 1945, they're not responsible for what France did in 1804. These institutions are like the UN of finance. They are often ineffective and it's fashionable to blame them for international problems, but they're not necessarily part of an evil conspiracy, any more than the UN is secretly plotting to subject the United States to some sort of international communist control.

[GreenTea]

58. Read Klein's book - No bullshit! Or get it on CD's so it can be read to you!!

Yes indeed, you do sound like a cheerleader for the slimy capitalist lying fucking IMF & World Bank creatures.

True democracies are GREAT and capitalism does SUCKS...it sucks the workers dry...anit no two ways about it!!

The only true socialism is among the wealthy and their collusive corporations!

[Hannah Bell]

38. not exactly. in "stages". & after delaying the process since 1996.

From a 2007 analysis: Debt Cancellation for Haiti: No Reason for Further Delays

Executive Summary

Haiti is the most impoverished country in the Western Hemisphere, with 76 percent of its population below the poverty line and a life expectancy of 53 years. Yet it was originally excluded from the International Monetary Fund (IMF) and World Bank’s Heavily IndebtedPoor Countries (HIPC) initiative for debt cancellation in 1996, because of a technicality relating to its debt service burden.

Although it was subsequently included (in 2006), because of this delay Haiti is currently struggling to meet the requirements for cancellation of most of its total $1.54 billion foreign public debt. Thus, while the other HIPC countries in the Western Hemisphere (Bolivia,Guyana, Honduras, and Nicaragua) have already received debt cancellation under the HIPC and Multilateral Debt Relief Initiative (MDRI) – Haiti still has to reach the "completion point" under the HIPC initiative in order to receive debt cancellation.

If this completion point is not reached by September 2008, as now appears likely, Haiti would have to pay an additional $44.5 million in debt service payments to multilateral institutions (mostly the World Bank and the Inter-American Development Bank). This is equivalent to about 26 percent of Haiti's spending on public health, where there are many vital unmet needs. Furthermore, this total does not include bilateral debt service of $11.4million, some cancellation of which can also be expected.

There are other reasons to avoid delay. There is little reason to believe that the conditions set by the IMF and World Bank for further debt cancellation are likely to benefit Haiti.Although the experience of HIPC debt cancellation is positive with regard to the funds freed up from debt cancellation being used for poverty-reducing expenditures,1 the conditions attached to such debt cancellation do not have a positive track record.

For example, in Aprilof this year the IMF's Independent Evaluation Office released a report that examined the experience of 29 Sub-Saharan African countries that underwent Poverty Reduction and Growth Facility (PRGF) programs, and were therefore subject to IMF conditions, from 1999-2005.

The report was highly critical of the IMF's role, and among other findings noted that nearly three-quarters of the aid money reaching these countries was not spent. Rather, at the IMF's urging, this money was used to pay off debt and to add to reserves.2

Another reason that these institutions should grant immediate debt cancellation is that they contributed to enormous economic damage in Haiti by cutting off all disbursements from 2001 – 2004. There is considerable evidence that this cutoff of aid was part of a deliberate effort by the U.S. government to destabilize and ultimately topple the elected government of Haiti.3

...For a country as poor as Haiti, the aid embargo was enormously destructive to the economy,and the violence during and after the coup inflicted further damage and cost thousands oflives. Because of the multilateral creditors' participation in this destruction, and for the other reasons noted in this paper, Haiti's debt should be cancelled without further delay.

http://docs.google.com/viewer?a=v&q=cache:QZ01D112r-AJ:www.cepr.net/documents/publications/haiti_debt_relief_2007_12.pdf+haiti+debt+cancellation&hl=en&gl=us&pid=bl&srcid=ADGEESirAQCxPlAdncjWvZ-CWT5taQ35924ixqUhwz5Ipen_xFV1t3VAkIpw4JavdfGZVcUTnTi094TvPeNk9wKEzBoTp7JMMPfLsk9wzNz7j63XmEznB9t1Ybtqk7zIfY6bBB9I4Tat&sig=AHIEtbSTI8KowCmCZmMrGI77x7yXGqKi0g




But it wasn't.

So spare me the "IMF/World Bank are really pretty nice" fairy tale.

Haiti has been a cash cow for Europe and the US for 200 years.

[Overseas]

47. One would almost think that was the purpose of the debt cancellation.

When the IMF's privatization policies end up bankrupting the countries they are "helping," they "forgive the debt" and can at least get a little positive PR out of the deal.

[nadinbrzezinski]

10. WATCH the UN Security Council Emergency Meeting tomorrow

that will tell us if the fight has started or not, over this.

Why I say that? UN officer floated a Marshal Plan idea on Wendesday.

Depending on what happens tomorrow...

I have the sneaky that a few members of the Security Council are NOT in the mood.

[jonathon]

22. Shameful and typical

[bertman]

25. Lest we forget, Haiti's indigenous leaders have a sordid history of piling up fortunes in

Swiss bank accounts. There's more than enough blame to go around here.

Maybe the IMF sees that trying to suck more blood out of the proverbial turnip is a lose-lose proposition. Should be interesting to see what the UN says.

[malaise]

36. You mean those bribes from foreign multinationals

and Western governments? Puppets come with a price.

[bertman]

40. You can only be a puppet if you are willing to accept the bribes. If we are ready to assail

a U.S. leader for accepting bribes, why would we give a pass to a Haitian leader?

[Hannah Bell]

39. Haiti's "leaders" have a history of being hand-picked by the US & toppled at will by the US.

We like corrupt leaders.

[bertman]

41. You are correct. My point is that Haiti's past leaders have been all too willing to go along

with the plan. National pride and resistance did not seem to enter the equation during the 20th century.

[TexasObserver]

26. Recommend

[maryf]

29. Call it Democracy

Too apt, have to share Bruce Cochburn's lyrics here: K&R

Call it Democracy

Padded with power here they come
International loan sharks backed by the guns
Of market hungry military profiteers
Whose word is a swamp and whose brow is smeared
With the blood of the poor

Who rob life of its quality
Who render rage a necessity
By turning countries into labour camps
Modern slavers in drag as champions of freedom

Sinister cynical instrument
Who makes the gun into a sacrament --
The only response to the deification
Of tyranny by so-called "developed" nations'
Idolatry of ideology

North South East West
Kill the best and buy the rest
It's just spend a buck to make a buck
You don't really give a flying fuck
About the people in misery

IMF dirty MF
Takes away everything it can get
Always making certain that there's one thing left
Keep them on the hook with insupportable debt

See the paid-off local bottom feeders
Passing themselves off as leaders
Kiss the ladies shake hands with the fellows
Open for business like a cheap bordello

And they call it democracy
And they call it democracy
And they call it democracy
And they call it democracy

See the loaded eyes of the children too
Trying to make the best of it the way kids do
One day you're going to rise from your habitual feast
To find yourself staring down the throat of the beast
They call the revolution

IMF dirty MF
Takes away everything it can get
Always making certain that there's one thing left
Keep them on the hook with insupportable debt

[cartach]

31. After reading all the comments

it sounds to me like the piece is just another dose of propaganda similar to right wing tactics that contributors to Democratic Underground usually reject out of hand. Like neocon crap it gives half the story only and slanted only one way.

[saorsa]

33. Slanted one way?

If there ever was a textbook case of anti-democratic dirty double dealing by a succession of US governments, Haiti is one. But as in many of the stories that are shaping the world around us, you won't find the full background on the main stream news, they don't do that kind of reporting. Neocons were behind the successful destabilization of Haiti in 2004, it is one of the great crimes of the Bush regime. There are some liberals can't bear to deal honestly with the truth of Haiti & US history because the Clinton administration has been accused by many historians and writers to have blocked Aristides restoration after the Bush 1 supported coup of 1991, until Aristide agreed to terms that would tone down his leftist stands and accept IMF policies. After that, the right wing continued to work to bring Aristide down again, and succeeded, with Bush 2.
Nothing marks a successful Neocon - Right wing strategy like the muddied pools they leave behind.

here are some links I hope will work for background on Haiti:

www.guardian.co.uk/commentisfree/2010/jan/13/our-role-i...
An article by Peter Hallward, author of 'Damming the Flood: Haiti, Aristide, and the Politics of Containment'

news.bbc.co.uk/2/hi/americas/8460185.stm
current BBC background, gives perspective but repeats the smear against Aristide and the lies that cover up the US involvement in removing him from power in 2004, repeated ad nauseum by Neo-liberal apologists and the Bush regime

http://rebelreports.com/post/109822009/bill-clinton-nam...
article by Jeremy Scahill

http://www.consortiumnews.com/2010/011310.html
more history from Robert Parry, consortiumnews.com

http://www.lrb.co.uk/v26/n08/paul-farmer/who-removed-ar...
Paul Farmer, on Aristides' removal, with background

also check out Project Censored, 2005 and other years also, I think, for background

[flyarm]

42. please do a little DU Archive search during 2004 and see what was being discussed here at DU when

Bush took down the elected government of Haiti..and then do a archive search on the Shock Doctrine..it has been discussed here extensively since it was first released.

Then do some research on GLOBALIZATION..by Greg Palast..and the IMF and World bank debts of Argentina.

[Solly Mack]

32. k/r

[Hannah Bell]

35. "by 1900, it was spending 80 percent of its national budget on repayments."

and starting in 1910, it all went to Citibank investors. For 40 more years.

[Jkid]

43. I knew this crap is going to happen.

The Shock Doctrine will ensure that Haiti will never develop as a normal nation. They'll still get their 80% poverty

[peacetalksforall]

45. I don't think the IMF should be defined as sort of a UN. It is the front for the barons.

It is financial slavery.

The truth hurts. And the truth is that loved and hated administrations and big money mouths and pockets have been doing this to them for centuries.

Read all of this and project to our future if you are not wealthy. As long as poverty is orderly, they will keep doing it.

Don't glorify the IMF.

If extending the loan expedites help, but follow this and review it. There are no heroes at the IMF. There is no heart there. It is a grand effort to appear to have dignity.

In a couple of weeks some other happening will divert attention away from Haiti and as reconstruction starts, the dirty work will be well underway.

From birth to death in poverty. Think about it.

A portion of the world gets rich by the minute and they assume they are the rulers.

They don't give a damn about democracy. Usury and perpetual poverty - their ticket to riches.

They were in on the coup of Aristide. Are coup participants interested in the votes of the poor? The answer is npt just NO, it is HELL NO. And what happened in the first days - murderers were brought in for a round of massacres. That is how to rule and safegaurd your money.

[maryf]

46. kick, nt.

[Fire1]

49. AND.......... the "speculation" begins, as well. That cruise ship

standing out from a Haitian resort overlooking the landscape served it's purpose for the gawkers/speculators.

[Fire1]

50. Oh hysterics and delusions!! Why is this not moved to the

"CONSPIRACY" forum????? :sarcasm:

[Fire1sKid]

51. +1

[Fire1sKid]

52. If Obama were more like LBJ this wouldnt happen

(from my perspective as well as others on here that is usually the correct response,that or the one on DU that every one loves,DENNIS KUCINICH)

[Fire1]

53. ROFL:

:rofl: :rofl: :rofl: :rofl:

[Greyhound]

54. Servitude to the global financial system created by and serving the original slavers.

Throwing off the parasites is no easy thing.

[WillyT]

55. I'm Thinking It's Happening Here In California As Well...

January 15, 2010
Is California's budget crisis overblown?

<snip>

The Wall Street Journal's Bret Arends wrote a counterintuitive piece this week that puts California's financial struggles in a bit of a different context.

After acknowledging the state's budget trouble, job losses and housing market collapse, Arends argues that California bonds remain a solid investment, despite doomsday predictions in some quarters that the Golden State is on the verge of becoming a failed state:

I think fears about California's fiscal stability are greatly overdone. A lot of this commentary is really political rather than economic. When someone warns you that "California, a laboratory of liberalism, is spiraling downwards, driven by a huge budget deficit," you have to figure it's more about "San Francisco values" than Sacramento economics.

California's latest budget shortfall, $20 billion over the next 18 months, looks a lot less intimidating when compared to the $1.9 trillion state economy. So too does the size of the state's general obligation debts: Standard & Poor's says there are $64 billion in Californian general obligation bonds -- those backed by the state's tax power -- outstanding.

A bit later, Arends says,

Ultimately, of course, the health of a state government will hinge on the performance of the state economy. There, too, talk of California as a "failed state" is misleading. Yes, California has been hit hard by the latest crisis and its economic performance last year was dismal, probably worse than in many other states. But the longer-term picture is one of the success, not failure. Between 1998 and 2008, according to the U.S. Department of Commerce, California's economy grew by 25% per person in real, inflation-adjusted terms. The U.S. average: 16%.

California, in fact, did better than all but a handful of states. It did far better than the Rocky Mountain states, the Southwest, the Great Plains states, and the South. California did far better than Texas or Alaska -- during an oil boom. And California achieved this faster growth even though it started from a higher level. It has, and maintains, one of the highest standards of living in America.

After noting that "hundreds of billions of dollars" of Californians' federal taxes have subsidized less-wealthy states for decades, Arends says,

That would be enough to pay the entire Sacramento state budget for years. Failed state? They should declare independence.

<snip>

Link: http://www.sacbee.com/static/weblogs/the_state_worker/2010/01/is-californias-budget-crisis-o.html

WSJ Piece: http://online.wsj.com/article/SB10001424052748704586504574654673186751100.html

:shrug:

[Ken Burch]

56. This kind of thing was NEVER supposed to happen once Obama was elected

We had a right to expect that he'd use his influence to stop the IMF from imposing austerity, especially on countries that are innocent victims of natural disasters.

There is no excuse for this.