By Mark Schuller, Huff­in­g­ton Post

http://www.huffingtonpost.com/mark-schuller/clearing-the-rubble-inclu_b_490277.html

Yes­ter­day was the Oscars. Last year’s Best Actor Sean Penn made the morning’s head­lines, donat­ing a mil­lion dol­lars to Haiti’s relief / recon­struc­tion effort. Col­lec­tively U.S. cit­i­zens have donated $1 bil­lion so far. Two ques­tions arise: one, which I and many oth­ers have asked numer­ous times, where is this money being spent, how, and what plan? A sec­ond, related ques­tion is where Haiti will get the funds for the rest of the effort con­ser­v­a­tively esti­mated at $16 billion.

Pri­vate char­i­ta­ble dona­tions can only go so far. Where is the rest of the recon­struc­tion com­ing from? What is the plan of these other actors? Gen­er­ally speak­ing there are two sets of actors: the “pub­lic sec­tor” and the “pri­vate sec­tor.” I put both in quotes because there is con­sid­er­able slip­page between gov­ern­ments and pri­vate, for-profit investors or com­pa­nies, in the U.S. as in Haiti. Both sets of actors have a plan­ning con­fer­ence com­ing up, one in Miami and the other in New York.

Given tomorrow’s “Haiti sum­mit” in Miami orga­nized by Inter­na­tional Peace Oper­a­tions Asso­ci­a­tion, this first blog will focus on the pri­vate sec­tor. The argu­ment goes some­thing like this: offi­cial devel­op­ment aid can set the con­di­tions for devel­op­ment, but its impact is always going to be smaller than that of the pri­vate sec­tor, which pro­vides jobs. Glob­ally, pri­vate sec­tor “for­eign direct invest­ment” (FDI) dwarfs pub­lic sec­tor “over­seas devel­op­ment assis­tance” (ODA). For exam­ple, FDI to “devel­op­ing coun­tries” in the Global South reached $636 bil­lion in 2004, com­pared to $93 bil­lion in ODA.

The oppo­site is true in Haiti. FDI is a pit­tance in Haiti. In 2002, it was $4.7 mil­lion, grow­ing to 160 mil­lion in 2006 only to shrink again to 29.8 mil­lion in 2008.(1) By con­trast, ODA has been high fol­low­ing Aristide’s ouster, begin­ning with a rushed, top-down process in the Interim Coop­er­a­tion Frame­work wherein donors pledged 1.4 billion.(2) Why is cap­i­tal invest­ment so small and volatile in Haiti? First of all, it should be noted that Haiti’s tra­di­tional elite(3) was not a cap­i­tal­ist but a mer­can­tile class. In other words they did not build like the Rock­e­fellers or the Carne­gies but always ben­e­fited directly off of monop­o­liz­ing trade. They there­fore always took for­eign inter­ests as their own.

To many peo­ple, espe­cially for­eign investors, the dev­as­tat­ing earth­quake wherein recent esti­mates count 230,000 dead, presents a “win­dow of oppor­tu­nity.” First and fore­most, there is the obvi­ous money to be made in recon­struc­tion: pri­vate prison com­pany GEO pulled a quarter-million no-bid con­tract for secu­rity; Coop­er­a­tive Hous­ing Foun­da­tion received $117 mil­lion for hous­ing recon­struc­tion. This is one ele­ment of what journalist-activist Naomi Klein dubbed “dis­as­ter cap­i­tal­ism,” what I would call “nonprofiteering.”

In addi­tion to the money to be made, there is another com­po­nent to dis­as­ter cap­i­tal­ism, what long­time human­i­tar­ian provider/scholar Anto­nio Donini calls “world order­ing.” Dis­as­ters — both “nat­ural” and “man-made” — pro­vide the oppor­tu­nity to clear the slate, to make anew. To some agen­cies, dis­as­ters cre­ate a terra nul­lius(4) — blank slate — upon which new plans, new visions, new poli­cies can be writ­ten and imposed.

If there really is a new Haiti, a new Port-au-Prince, com­ing, that would be wel­come to most of my neigh­bors, friends, and col­leagues. Imag­ine a Port-au-Prince where every­one in all neigh­bor­hoods has equal access to a large enough, dry, safe house, elec­tric­ity, clean drink­ing water, and san­i­ta­tion. Imag­ine a Haiti where every­one, girls and boys, can go to school for free which is man­dated by the Hait­ian Con­sti­tu­tion (Arti­cle 32.1). Imag­ine enough pri­mary health care in close prox­im­ity so that women who want to have pre­na­tal care can have it, so that the 75 chil­dren out of 1,000 who cur­rently die before their fifth birth­day can be but a painful memory.

Unfor­tu­nately this isn’t the plan from the pri­vate sec­tor, and it is any­thing but new. While the name has changed, from Reagan’s Caribbean Basin Ini­tia­tive to the Interim Coop­er­a­tion Frame­work to the HOPE Act to the Col­lier Report, the plan essen­tially remains the same.

Since the 1970s and 1980s, with sup­port from the World Bank, Inter-American Devel­op­ment Bank and USAID, Haiti has been the site for off­shore tex­tile plants, alter­na­tively called Free-Trade Zones, Export Pro­cess­ing Zones, maquilado­ras, and sweat­shops, the core plank in neolib­er­al­ism. Dic­ta­tor “Baby Doc” Duva­lier promised to turn Haiti into the “Tai­wan of the Caribbean.” Neolib­er­al­ism pushed peas­ants off their land. Accord­ing to Hait­ian econ­o­mist, direc­tor of research at the State Uni­ver­sity and author of seven books Fritz Deshommes, neolib­er­al­ism destroyed 800,000 agri­cul­tural jobs in Haiti. Even at its height in the 1980s the off­shore apparel indus­try only pro­vided 70,000 jobs. Port-au-Prince grew up from 500,000 peo­ple (only built for 250,000) in 1980 to an esti­mated 2.5 mil­lion in 2005.

Where were these 2 mil­lion new res­i­dents going to live? Even for the lucky few that did make a steadily declin­ing min­i­mum wage (now val­ued at $1.65 per day), what kind of house could they afford? Said Hélène,(5) “If you pay 10 gour­des (Haiti’s cur­rency, around 40 to a U.S. dol­lar) for trans­port to work, 10 to return, and buy a plate of food for 50, that’s all your 70 gour­des.” I have vis­ited dozens of people’s homes in var­i­ous bidonvil (shan­ty­towns); many are seven feet square cin­derblock and patch­work tin roofs that have no pri­vacy, no water, no toi­let or shower, and barely keep out the ele­ments like pour­ing rain and scorch­ing Caribbean sun. After the pro­mo­tion of export-processing zones, lit­er­ally overnight, these bidonvil were cre­ated, includ­ing the infa­mous Cité Soleil, accord­ing to a movie Ghosts of Cité Soleil “the most dan­ger­ous place on Earth.” With state ser­vices pri­va­tized, also a plank in neolib­er­al­ism, fam­i­lies (espe­cially moth­ers) have to pay for their children’s edu­ca­tion (40% of a min­i­mum wage salary for one child) and health care, on top of high hous­ing costs and increas­ing food costs.

On top of this, the off­shore apparel indus­try is noto­ri­ously unsta­ble; at its peak it employed 70–80,000 jobs but dwin­dled to 12–14,000 at the nadir of vio­lence fol­low­ing Aristide’s forced removal from office — both in 1991 and 2004. Com­bine this with an already weak state delib­er­ately under­mined through neolib­eral poli­cies such as “struc­tural adjust­ment” and these bidonvil have next to no pub­lic ser­vices, and even fewer jobs. Econ­o­mist Camille Chalmers said, “We can say there­fore that Cité Soleil is a child of the Indus­trial Park.” Sub-contracted, low-wage fac­tory work does not con­tribute much to the econ­omy besides jobs. Being exempt from taxes, it does not con­tribute to the financ­ing of Haiti’s social ser­vices. Accord­ing to a min­is­ter of finance, it is the sec­tor with the least “value-added” in Haiti.

We’ll be hear­ing soon another siren song about the “Asian Tigers” like Korea who pulled them­selves up by their boot­straps through tex­tiles and grew into heavy indus­try. We’ll hear about China who has even lower wages and the world’s great­est pro­duc­tive capac­ity. To be blunt, Haiti is dif­fer­ent, given its place within the world sys­tem. It has always been drained by its for­mer colo­nial power and later its pow­er­ful neigh­bor to the north, its pro­duc­tive resources steadily drained. Haiti had a small but impor­tant indus­tri­al­iza­tion that sup­ported a peas­ant econ­omy but that has all been sys­tem­at­i­cally destroyed. Korea and China both had large inter­nal mar­kets, huge infu­sions of cash, and iron-fisted dic­ta­tors. Most impor­tantly, how­ever, both coun­tries had and have a range of pub­lic ser­vices pro­vided by the gov­ern­ment to fac­tory work­ers so their much lower wages actu­ally go far­ther than they do in Haiti. This is part of what econ­o­mists call “pur­chas­ing power par­ity,” along with fluc­tu­at­ing exchange rates.

It is true that even before the earth­quake Haiti was in des­per­ate need of good pay­ing jobs; esti­mates range from 70 to 85 per­cent unem­ploy­ment. The lack of jobs def­i­nitely gives fac­tory own­ers a sense of impunity, as fac­tory worker Marie-Jeanne said, “they fire us if we join a union because they know that if they fire you they will find 50 peo­ple to replace your jobs.” Job cre­ation, espe­cially now, is indeed an urgent pri­or­ity. But we all need to be ask­ing the ques­tions about what the social cost of these jobs will be, what their long-term ben­e­fits are, and who in the end will ben­e­fit. For exam­ple, based on my research last sum­mer, the cost of all the Hait­ian labor on a pair of jeans ranges from 12 and a half to 18 cents. My Levi’s cost me — on sale — $35. The prob­lem is the enor­mous imbal­ance of where the “value added” is being kept, with only the barest min­i­mum stay­ing in Haiti. The same is true, by the way, of man­goes and other agri­cul­tural exports.

To those who don’t trust me because I am not a devel­op­ment econ­o­mist, lis­ten to the fac­tory work­ers them­selves, like Fris­line: “when I was work­ing in the fac­to­ries, I only made pen­nies. And this didn’t do any­thing for me. Now I am doing com­merce, and I see I live bet­ter. I can invest in my business.“She of course lost her house and her busi­ness in the earth­quake. I hope to see her when I return at the end of the month.

If there is a plan to clear the rub­ble I would sin­cerely hope that peo­ple like Fritz Deshommes and the State Uni­ver­sity are fram­ing the con­ver­sa­tion with their exper­tise, and peo­ple like Hélène and Fris­line are par­tic­i­pat­ing in the process, giv­ing their pri­or­i­ties, their cri­tiques, and actu­ally set­ting agenda in addi­tion to being a name on an atten­dance roster.

Haiti’s future devel­op­ment, not to men­tion basic human dig­nity and respect, demand it.
Mark Schuller is Assis­tant Pro­fes­sor of African Amer­i­can Stud­ies and Anthro­pol­ogy at York Col­lege, the City Uni­ver­sity of New York. He is co-director of Poto Mitan: Hait­ian Women, Pil­lars of the Global Econ­omy and co-editor of Cap­i­tal­iz­ing on Cat­a­stro­phe: Neolib­eral Strate­gies in Dis­as­ter Recon­struc­tion.

Notes:
(1) Source: World Bank Haiti at-a-Glance. Accessed March 7, 2010.
(2) See cri­tique, “Haiti: the Tail Wag­ging the Dog?” on Haiti­Analy­sis or “Haiti Is Fin­ished” in Cap­i­tal­iz­ing on Cat­a­stro­phe.
(3) Actu­ally there were two: black mil­i­tary and lighter-skinned mer­chants, each com­pet­ing with one another. See Michel-Rolph Trouillot’s Haiti: State against Nation.
(4) This legal term, Latin for “empty land,” jus­ti­fied Euro­pean and Amer­i­can expan­sion and geno­cide into already-inhabited lands.
(5) Names are pseu­do­nyms to pro­tect their anonymity. All quotes are from Poto Mitan