Caribbean Project: Mats Lundahl on Haiti’s Foreign Debt

Haiti

Here’s a key excerpt from Mats Lundahl’s Poverty In Haiti: Essays on Underdevelopment on the nature of Haiti’s external debt:

“The occupation put an end to all that. Prior to the occupation, Haiti had not one but many armies whose only purpose was to fight each other. The pattern which had developed since the removal from office in 1843 of Jean-Pierre Boyer (the last president to rule firmly for a long period – since 1818) was a predictable and repetitive one: with a would be president hiring a mercenary army to march on the capital, failing or succeeding to topple the sitting government, and in the event of success going straight for the contents (if any) of the treasury.”

These are the “Generals” mentioned by Hesketh Prichard in Where Black Rules White and Sir Spenser St. John in Hayti, or, The Black Republic:

“Should the vaults happen to be empty, there was a remedy for that as well – that of floating a loan in the international or domestic market, more often than not at a tremendous discount – with repayment being passed on to future governments and generations. Foreign loans were taken in 1874, 1875, 1896, and 1910. Thereafter, Haiti’s creditworthiness abroad was exhausted, and the last governments before 1915 had to make do with what they could squeeze out of the domestic capital market: in 1912, 1913, and 1914 – the latter, four years loans.”

Stop.

This is fascinating because we have already seen that Haiti’s so-called “double debt,”  or the French indemnity of 1825 (in 1838, it was renegotiated down to 60 million francs), was actually paid off in 1883. Haiti had the chance to free itself of external foreign debt, but these “Generals” – the puppet Domingue in 1874 and 1875, Hyppolite in 1896, and Simon in 1910 – negotiated new foreign loans.

“The Americans put a stop to the political and financial merry-go-round, but this was not to be a lasting achievement. As soon as the occupation came to an end, the old tendencies raised their ugly head again. Other constructive efforts of the occupation were also short-lived. The Americans concentrated on forcing the Haitians to repay the foreign debt which their rulers had contracted for them, on constructing physical infrastructure and on providing education, along American lines.

They were infinitely more successful in the first area than in the second, and much more successful in the second than the third. Debt repayment was given absolute priority, since Haiti’s entire foreign debt had been concentrated in American hands, beginning in 1922. Between 1924 and 1930, the external debt was effectively halved, and in 1947 it was completely paid off. (The United States continued to exercise financial control after the end of the occupation as well.) The legacy of the second effort was above all an improved transport network, which was left to slowly deteriorate once the Americans pulled out of Haiti. Finally, vocational education, not least agricultural, modeled on black schools in the United States, was superimposed on the Haitian, French-inspired system, which favored belles-lettres and classical studies, with few, if any, lasting results.” (Mats Lundahl, Poverty In Haiti, pp.9-10)

This is revealing for two reasons:

1.) First, the American occupation (1915-1934) prevented Haiti’s predatory elite from getting its hands on the spoils of high office. As long the United States controlled Haiti’s finances, the foreign debt (a legacy of the “Generals”) was swiftly and finally paid off in 1947. Haiti had effectively been given a second chance at independence.

2.) Second, even while the foreign debt was being paid off, there was still plenty of money left over in Haiti’s own budget, not to be confused with foreign aid, which didn’t begin until 1944, to rebuild and invest in Haiti’s public infrastructure.

Simply put, there was no other problem in Haiti but the corruption and mismanagement of the country by its own leadership. In the eastern Caribbean, Guadeloupe and Martinique (still under white supremacy and colonialism) didn’t have this problem.

2 Comments

  1. Boom.

    … as I have said all along:

    “This, however, lasted only until the decisive year in Haiti’s history – 1809 – the year when the course of the next two centuries was decided, politically as well as economically. At that point, the plantation society crumbled under its own weight. …

    The agricultural ‘frontier’ that was created by the sudden loss of population during the wars of liberation was closed at some point during the last quarter of the nineteenth century, and from then on, Haiti’s agricultural history was reduced to a Malthusian race between population and food production, with disastrous long-run consequences for the environment and living standards.”

  2. As usual, fascinating stuff. One of the few serious analyses of Haiti I have seen online, and with lessons for the larger world.

    RE politics and culture in Haiti: these appear to be marked by kleptocracy, fighting among private armies, and a general decline of civilized infrastructure. Not very much different from the situation in many African countries, is it? Or for that matter, too many cities in the USA (Detroit, Newark, etc., just substitute “gangs” for “private armies”)?

    It’s easy enough to lay the blame for all of this on genetics, though genetics are probably a large part of the equation. Much of it comes down to the sheer corruption of just about any black political class when thrust into a modern society. Why this is so ought to be a topic for national debate…though it will not be under current circumstances.

    Another point: I’ve seen much criticism by blacks (and liberals) of the American occupation of Haiti, but as you note when the country was run by whites, it did actually function. Perhaps this is a source of so much rage?

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