During the Crossroads Haiti Debate, I was struck by the fact that even university professors and high school teachers who teach history to American students subscribe to the belief that Haiti’s present condition is due to its ruthless exploitation at the hands of evil American capitalists.
Didn’t these people know that Whites were forbidden to own land and property in Haiti – the only place in the Caribbean where foreign capitalists were excluded – from 1804 to 1918? Doesn’t it seem intuitively absurd to blame Americans given the fact that Puerto Rico has been a US territory since 1900 and the average per capita income there is now 20x higher than it is in Haiti?
From 1915 to 1934, Haiti was occupied by the United States. In 1918, the Haitian Constitution was changed and foreigners were finally allowed to own land and property in the “Black Republic” for the first time since independence. So what happened to Haiti’s economy during the American occupation?
“And even though foreign companies were able to gain control of only a small proportion of land in Haiti – no more than 2 percent of the territory was in foreign hands by the 1920s – their impact was outsized.” (Laurent Dubois, Haiti: The Aftershocks of History, p.269)
By the 1920s, foreigners had taken control of a mere 2 percent of the land because Haitians fiercely resisted the arrival of foreign companies which tried and failed to revive the export based plantation economy:
“In many parts of the country, rural populations took on the arriving corporations in a war of attrition and succeeded in driving them away – by refusing dangerous, low-paying work, insistently demanding better conditions, and resisting expropriation of land. It is, in fact, a remarkable testament to the strength of Haiti’s counter-plantation system that while American companies successfully built plantations elsewhere during this period, particularly in Cuba and the Dominican Republic, they were largely unable to do so in Haiti – even though the U.S. directly governed the country for two decades.” (Laurent Dubois, Haiti: The Aftershocks of History, p.269)
In spite of the US occupation, the plantation system wasn’t reestablished in Haiti like it was in Cuba, Puerto Rico, and the Dominican Republic.
“The Dominican Republic was occupied militarily from 1916 to 1924 and Haiti from 1915 to 1934. Yet their status as US protectorates continued much longer because the customs receiverships could not be ended until all the external debt had been paid off. The United States therefore had financial control of the Dominican Republic from 1905 to 1941 and of Haiti from 1915 until 1947. As a result, neither country defaulted on the external debt in the difficult years of the 1930s, and yet they were never brought inside the US tariff wall – and both benefited only marginally from the US sugar quotas issued from 1934 onwards. It is of course true that protectorate status brought inward investment (mainly from the United States) that might not otherwise have materialised. However, these investments paled in significance against those US investments going not only to Cuba and the US colonies, but also to other parts of the Caribbean.
These other parts were all European colonies, and the United States, except in the Second World War, did not receive preferential treatment. However, US investors exporting to the UK from British colonies benefited from imperial preference, and the 1938 Anglo-American Trade Agreement put restrictions on which commodities the UK could tax preferentially. The areas of special interest to US investors included banana exports from Jamaica, asphalt and petroleum exports from Trinidad & Tobago and bauxite from Suriname. Perhaps the most important investment of all, however, was the US oil refinery on Aruba. This had been completed by Standard Oil in 1929, a few years after the establishment of the Royal Dutch Shell refinery on Curaçao. These mineral investments had strategic and economic value, and thus the Caribbean would acquire a special importance for the United States in wartime.” (Victor Bulmer-Thomas, The Economic History of the Caribbean Since the Napoleonic Wars, pp.209-210)
In 1947, US control of Haiti’s finances came to an end when the external debt that Haiti had accumulated was finally paid off. This shouldn’t be confused with the “double debt” or the French indemnity which was paid off in 1883.
In spite of the US occupation and control of Haiti’s finances until 1947, US business interests were much more active in Cuba, Puerto Rico, the US Virgin Islands, Jamaica, Trinidad & Tobago, Aruba and Suriname than Haiti. Foreign investment in Aruba and Curaçao’s oil refining industry was responsible for initiating their economic rebound during the 20th century.
“The US forced Haiti to adopt a new constitution in 1918 (Franklin Roosevelt would later boast – incorrectly – that he had drafted it), which repealed the restrictions on land purchases by foreigners. Some US companies took advantage of this to establish large estates at the expense of small farmers, but the results were very modest.” (Victor Bulmer-Thomas, The Economic History of the Caribbean Since the Napoleonic Wars, p.210)
The economic impact of the US occupation on Haiti was “very modest.” In contrast, sugar production exploded in Cuba and Puerto Rico developed a manufacturing sector because of their greater access to the US market.