Saturday, May 3, 2008

Connecting Debt and Food Security in Haiti

In Haiti, the influx of food and resources from the United States, Canada and Europe severely undermine the Haitian economy and agriculture systems. Forty-six percent of all imports to Haiti come from the United States, followed by 12.5% from other Caribbean countries (predominantly the Dominican Republic) and 11.4% from Europe. Haiti is strikingly open to foreign trade with currently tariffs on imported products averaging at 2.9%, though the vast majority of goods enter tariff-free. Liberal trade agreements have crushed Haiti’s agriculture sectors and have significantly contributed to unemployment and rural-urban migration. Haiti’s local agricultural economies have virtually collapsed and “can barely produce 48% of the food consumed in the country.” In fact, an estimated 830,000 jobs have been lost as a result of trade liberalization. More than 2/3 of the labor force do not have formal jobs (2002 estimate).
Despite public outcry, the Haitian government lacks adequate funding to support agricultural development or to bolster national production.
Forty-five percent of Haiti’s debt was accumulated under the nefarious Duvalier dictatorships with no direct benefit to the Haitian people. From 1956-1986, foreign assistance was used for the personal benefice of the Duvalier family. Since the collapse of the Duvalier regimes, Haiti’s attempts to rebuild her social and economic infrastructure have been undermined by required debt repayments. Only recently has Haiti qualified for debt relief, under the HIPC initiative, but the benefits of debt relief may not be realized until 2009 or 2010. Today, Haiti pays $56 million annually in to multilateral creditors to service its $1.3 billion dollar debt while her people suffer in poverty. If Haiti is forced to wait until the end of 2010 they will pay an additional 90-120 million dollars just to the IDB. Canceling Haiti’s debt would allow increased spending on priorities the country established in its 2007 Poverty Reduction Strategy: including agriculture, food security, health and education.
To combat the problems of food insecurity, Haiti has objectives to: grant loans to farmers and agricultural enterprises in order to enhance productivity; provide declining subsidies for agricultural production, which would aid in the purchase of fertilizers, tools and equipment. Specifically, Haiti’s Poverty Reduction Strategy prioritized the development of a sustainable agriculture system based on: environmentally sound agricultural practices: increased clarity on the ownership and use of land; watershed protection; and ensuring the broader availability of basic foodstuffs through the stimulation of agricultural production (livestock farming; poultry production).

Haiti owes over one billion USD to multilateral financial institutions: $21 million to the IMF; $507 million to the WB; $534 million to the Inter-American Development Bank. The IDB will grant Haiti interim relief of 20 million over the next two years and (if it complies with economic reforms set by HIPC creditors) could obtain full debt relief from IDB by 2009 or 2010.

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