haiti needs grants, not loans: stop them before they shock again

If you've read Naomi Klein's Shock Doctrine, while you were reading about frantic earthquake recovery efforts in Haiti, or watching images of fortunate Canadians being evacuated, like me, you may have wondered if Haiti is in for another disaster, of the capitalist kind.

Here's Naomi Klein in an interview with Amy Goodman.

...crises are often used now as the pretext for pushing through policies that you cannot push through under times of stability. Countries in periods of extreme crisis are desperate for any kind of aid, any kind of money, and are not in a position to negotiate fairly the terms of that exchange.

And I just want to pause for a second and read you something, which is pretty extraordinary. ... This went up a few hours ago, three hours ago, I believe, on the Heritage Foundation website.

"Amidst the Suffering, Crisis in Haiti Offers Opportunities to the U.S. In addition to providing immediate humanitarian assistance, the U.S. response to the tragic earthquake in Haiti earthquake offers opportunities to re-shape Haiti's long-dysfunctional government and economy as well as to improve the image of the United States in the region." And then goes on.

Now, I don't know whether things are improving or not, because it took the Heritage Foundation thirteen days before they issued thirty-two free market solutions for Hurricane Katrina. We put that document up on our website, as well. It was close down the housing projects, turn the Gulf Coast into a tax-free free enterprise zone, get rid of the labor laws that forces contractors to pay a living wage. Yeah, so it took them thirteen days before they did that in the case of Katrina. In the case of Haiti, they didn't even wait twenty-four hours.

Now, why I say I don't know whether it's improving or not is that two hours ago they took this down. So somebody told them that it wasn't couth. And then they put up something that was much more delicate. Fortunately, the investigative reporters at Democracy Now! managed to find that earlier document in a Google cache. But what you'll find now is a much gentler "Things to Remember While Helping Haiti." And buried down there, it says, "Long-term reforms for Haitian democracy and its economy are also badly overdue."

But the point is, we need to make sure that the aid that goes to Haiti is, one, grants, not loans. This is absolutely crucial. This is an already heavily indebted country. This is a disaster that, as Amy said, on the one hand is nature, is, you know, an earthquake; on the other hand is ... is worsened by the poverty that our governments have been so complicit in deepening. Crises, natural disasters are so much worse in countries like Haiti, because you have soil erosion because the poverty means people are building in very, very precarious ways, so houses just slide down because they are built in places where they shouldn't be built. All of this is interconnected.

But we have to be absolutely clear that this tragedy, which is part natural, part unnatural, must, under no circumstances, be used to, one, further indebt Haiti, and, two, to push through unpopular corporatist policies in the interests of our corporations. And this is not a conspiracy theory. They have done it again and again.

Richard Kim, writing in The Nation, spells it out further.

So what can activists do in addition to donating to a charity? One long-term objective is to get the IMF to forgive all $265 million of Haiti's debt (that's the $165 million outstanding, plus the $100 million issued this week). In the short term, Haiti's IMF loans could be restructured to come from the IMF's rapid credit facility, which doesn't impose conditions like keeping wages and inflation down.

Indeed, debt relief is essential to Haiti's future. It recently had about $1.2 billion in debt canceled, but it still owes about $891 million, all of which was lent to the country from 2004 onward. $429 million of that debt is held by the Inter-American Development Bank (IDB), to whom Haiti is scheduled to make $10 million in payments next year.

Obviously, that's money better spent on saving Haitian lives and rebuilding the country in the months ahead; the cancellation of the entire sum would free up precious capital. The US controls about 30 percent of the bank's shares; Latin American and Caribbean countries hold just over 50 percent. Notably, the IDB's loans come from its fund for special operations (i.e. the IDB's donor nations and funds from loans that have been paid back), not from IDB's bonds. Hence, the total amount could be forgiven without impacting the IDB's triple-A credit rating.

Finally, although the Obama administration temporarily halted deportations to Haiti, it hasn't granted Haitians temporary protected status (TPS), which would save them from being deported back to the scene of a disaster for as long as 18 months, allow them to work in the US and, crucially, send money back to relatives in Haiti. In the past, TPS has been given to countries like Honduras and Nicaragua in 1998 after Hurrican Mitch, but it has never been extended to Haitians, even after the 2008 storms, presumably because immigrations officials fear a mass exodus from Haiti.

But decency, as well as fairness, should trump those fears now. As Sunita Patel, an attorney with CCR, told me, "We have granted TPS to El Salavador, Honduras, Nicaragua, Somalia and Sudan following natural disasters. To apply different rules here would fly in the face of the administration's efforts to build good will abroad."

(UPDATE: It has just been announced that the Obama administration has granted Temporary Protected Status to Haiti. This is a great relief to Haitians in the US and a victory for those who pressured the administration to do so.)

A lot of good articles and info are being posted on the Facebook group No Shock Doctrine for Haiti.

I also refer you again to an article I posted earlier, putting Haiti's oft-mentioned chronic poverty in historical perspective: "Our Role In Haiti's Plight," by Peter Hallward, from The Guardian.