During the 1970s, Haiti enjoyed a 5 percent annual economic growth rate as foreign aid, overseas investment, and higher commodity prices buoyed the economy. A key factor in this growth was the 1973 renewal of foreign aid from the United States and other donors after a ten-year suspension. The rapid development of assembly manufacturing that began in the late 1960s also stimulated economic expansion. Higher prices for coffee, sugar, cacao, and essential oils boosted previously depressed cash-crop production. Infrastructure development proceeded, construction boomed, banking prospered, and tourist arrivals more than doubled. Haiti modernized considerably, especially in Port-au- Prince and the major provincial cities. Agriculture stagnated, however, and per capita food production in real terms continued to decline. Jean-Claude Duvalier showed some interest in developing the nonagricultural sectors of the economy during his regime, and the state slowly expanded its role. Haitis fortunes soured in the 1980s, as real economic growth declined by 2.5 percent a year from 1980 to 1985. Inflation rose over the same period from 6 to 8 percent, and official unemployment jumped from 22 percent to more than 30 percent. After an interval of positive growth in 1986 and 1987, the negative growth trend continued in 1988, when the economy contracted by 5 percent. Although the countrys poor performance in the 1980s to some extent reflected hemispheric trends, Haiti faced its own peculiar obstacles, many of which stemmed from decades of government indifference to economic development. Uneven foreign aid flows, resulting from disputes over human rights violations and a lack of progress toward democracy, hampered government spending.Worsening ecological problems hindered agricultural development, and tourist arrivals plummeted because of negative media coverage of the islands political situation and the high incidence of AIDS among Haitians. The most fundamental problems of the Haitian economy, however, were economic mismanagement and corruption. More avaricious than his father, Jean-Claude Duvalier overstepped even the traditionally accepted boundaries of Haitian corruption. Duvalierists under Jean-Claude engaged in, among other activities, drug trafficking, pilferage of development and food aid, illegal resale and export of subsidized oil, fraudulent lotteries, export of cadavers and blood plasma, manipulation of government contracts, tampering with pension funds, and skimming of budgeted funds. As a result, the president for life and his wife lived luxuriously, in stark contrast to the absolute poverty of most Haitians. Allegations of official corruption surfaced when Duvalier appointed a former World Bank official, Marc Bazin, to the post of finance minister in 1982. Bazin sought to investigate corruption and to reform fiscal accounting practices in connection with a 1981 International Monetary Fund (IMF) economic stabilization agreement. More zealous than Duvalier had anticipated, Bazin documented case after case of corruption, determined that at least 36 percent of government revenue was embezzled, and declared the country the most mismanaged in the region. Although quickly replaced, Bazin gave credence to foreign complaints of corruption, such as that contained in a 1982 report by the Canadian government that deemed Duvaliers Haiti a kleptocracy. After the fall of Duvalier, the provisional National Council of Government (Conseil National de Gouvernement--CNG) enacted numerous policy reforms mandated by structural adjustment lending programs from the IMF and the World Bank. These reforms included the privatization of unprofitable state-owned enterprises, trade liberalization, and export promotion. The CNG, however, never fully implemented the economic reforms because of nagging political instability. At the close of the decade, the economic direction of the military government, led by Lieutenant General Prosper Avril, youtu.be/kY1_yrwKMp8
Posted on: Wed, 08 Oct 2014 20:42:08 +0000
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