Murder of Haitian leader sheds light on nation’s monopoly-dominated economy
People walk past military vehicles blocking the entrance to Pétion Ville, the neighborhood where the late Haitian President Jovenel Moise lived in Port-au-Prince, Haiti, on Wednesday July 7, 2021. Moïse was assassinated in an attack on his private residence early Wednesday morning. , and the first lady Martine Moïse was shot dead in the attack overnight and hospitalized, according to a statement from the country’s acting prime minister. (AP Photo / Joseph Odelyn)
The assassination of Haitian President Jovenel Moïse in his home near the capital Port-au-Prince earlier this month shook the already besieged Caribbean nation, which is the poorest in the Western Hemisphere and has a history of political violence.
According to the Haitian authorities, mercenaries stormed the President’s closed compound and shot and killed the 53-year-old businessman, seriously injuring his wife, Martine. Moses, a member of the center-right PHTK party, was a polarizing politician, accused in a 600-page report prepared by a panel of judges that he hijacked Venezuela’s foreign aid. Moïse came to power as the chosen successor to President Michel Martelly, a popular musician who goes by the stage name Sweet Micky. He won the post in the hotly contested 2016 election amid allegations of voting irregularities, intimidation and violence.
Now, more violence threatens to engulf the Caribbean nation of 11 million people, along with the leaders of the nation’s powerful criminal gangs call for civil war. Adding to the chaos, Moïse does not have a clear or elected successor as the current prime minister’s term was due to expire this week, and his Supreme Court president died of Covid-19 days before the assassination.
The power vacuum and the dangerous instability of the French-speaking nation are the result of many factors, but the American media ignores the most important, including the capture of the state by the elites, a sinister monopoly that characterizes the country’s economy and the neoliberal policies imposed by the United States and international institutions. These factors have played an important role in the creation of a country characterized by 14 percent unemployment rate and 60 percent of the population in poverty. No matter how the assassination unfolds, if Washington is truly to help stabilize the Haitian government and lift its citizens out of poverty, it should use its help and influence to promote economic democracy through competition. and anti-monopoly enforcement.
In Haiti, the richest 1% controls almost half of the country’s wealth. Just over 600 families control 345 companies. Elite family groups have the monopoly control large sections of industries through conglomerate structures. Three big banks — Unibank, Sogebank and BNC—control 83 percent of Haiti’s banking assets and 75 percent of its loan portfolio. An incredible 70 percent of loans are in the hands of just 10 percent of borrowers. In telecoms, Digicel has an 85% market share in subscribers and acquired the second-largest supplier, Voilà in 2011. Even in the food industry, supermarkets and prepackaged foods are monopolized by a few companies. This has contributed food prices 30 to 77 percent higher than in other Latin American countries. Some 38 percent of the value of imports in areas such as petroleum, food and consumer goods are imported in highly concentrated markets.
In addition, these companies to hire in collusion and uncompetitive policies by offering different products that do not overlap, according to a 2018 report from Famine Early Warning System, a leading provider of information on famine created by the United States Development Agency international in 1985.
The lack of competition in many industries means that the prices of inputs in the upstream and downstream product markets are not competitive. It also hurts the efficiency and productivity of the value chain. In Haiti, the monopoly is a major deterrent development because it creates barriers to entry and maintains anti-competitive practices. Many of these companies benefit from low import tariffs, import monopolies, tax exemptions, and government procurement and government loans.
These monopolies mar the history of Haiti but have been particularly strong in recent decades. After Haiti’s independence from France in 1804, two groups competed for power: the military who accumulated political power and were of African descent and the merchants who controlled trade and were of mixed French and African descent. Haitian society has always been a symbiotic relationship between these two powerful groups.
The merchant elite only gained political power to see it stripped by the Haitian army after American troops left the country in 1934 after a 19-year occupation. Dictator François Duvalier (“Papa Doc”) makes powerful enemies in Haiti’s business community, attacking elite economic control and promoting black nationalism during his reign from 1957 to 1971. Duvalier, at the time, only allowed monopolies if the interests of business owners companies were aligned with those of his government. The dictator created monopolies in mineral and oil exploration, television, fertilizers, casinos, hotels, sugar and agriculture. Anti-Communist, Duvalier had the military backing of the United States by serving as an ally against Fidel Castro’s Cuba. After his death in 1971, his son and successor Jean Claude (“Baby Doc”) reestablished relations with the former Haitian elites and gave them control of the economy in the 1970s and 1980s. In 1985, 19 families in the country had exclusive rights for the import of essential products.
In the 1980s and 1990s, the neoliberal policies advocated by international institutions and the United States favored economic and trade liberalization in Haiti, leading to the elimination of customs duties on more than a hundred products. This free but unfair trade led to the importation of subsidized American rice through President Ronald Reagan’s Caribbean Basin Initiative. Many self-sufficient farmers became unable to compete with cheap American imports and migrated to the cities. The influx helped create the notorious slums and slums that exist today. During the 1990s, rice imports continued with the American company Erly Industries, whose president had ties to the Reagan administration, establishment monopoly control of the rice industry.
This rice import policy continued under the Clinton administration, although the former Democratic president apologized in 2010, saying he made a “devil’s market”Which has contributed to the persistence of Haitian poverty. “So we sincerely thought we were helping Haiti when we restored the president [Jean-Bertrand] Aristide, ”said Clinton Haiti Freedom,“We are committed to helping rebuild the infrastructure through the Army Corps of Engineers there and doing a lot of other things. And we made this devil’s deal on rice. And it was not the right thing to do. We should have kept working to help them become self-sufficient in agriculture. Haiti always imports 80 percent of its rice comes from the United States
The influx of rice and the shrinking livelihoods of farmers in Haiti helped Aristide, a socialist, win the 1990 elections with the support of rural voters galvanized by his pro-poor platform and to engage to fight against monopolies. These same monopolies would later go help finance a coup against Aristide to protect their business interests. The Clinton administration and the US military helped him regain power.
Many of these elites in Haiti were distinguished by the US Congressional Task Force on Haiti in the 1990s. The panel detailed how many of these monopolies lobbied Washington to develop a policy on Haiti. In addition, some groups such as the International Republican Institute (IRI) are linked to this elite group and have affecting politics in Haiti for decades.
Many of those same oligarchs who have taken over the economy over the past few decades are still in control monopolies in Haiti to date. These elites would later go finance the political party PHTK and the campaign of President Moïse and his predecessor Michel Martelly.
After Moses’ election, one of his main goals was to reform the Haitian energy sector promising electricity 24 hours a day in a country plagued by power outages = blackout and fuel shortages. About 80 percent of electricity in Haiti is produced from imported diesel fuel. Many businesses and households use diesel generators for reliable electricity because the national electricity grid is too small. An oligopoly of just three independent power companies – Sogener, E-Power and Haytrac – dominates energy imports. These companies then resell the fuel to the Haitian public electricity supplier Electricité d’Haiti. In 2019, the Moïse government suspended contracts with these companies, took control of Sogener, and stopped its executives accused of overbilling the state. The assassinated president may have made matters worse, as power generation in Port-au-Prince fall from 130 megawatts to less than 50 megawatts.
By attempting to reform the energy sector and go after other monopolies, Moses bit the hand that fed him. It was make enemies former allies. In recent years, Moïse has started to denounce the elites in Haiti, arguing that they control the nation. “The Haitian state is being held hostage, and the only way we can talk about development is to release the captured state,” he said. declared in a speech in 2019.
Although Moses’ attempts at reform failed, American foreign policy could help. Washington has pampered overseas monopolies for too long with its trade policies, its invitations to lobby, and its failure to promote anti-monopoly and competition policies. The United States has been providing aid to Haiti and advising its governments for decades, but the country has no laws or regulations on the competition. If Washington is to avoid further political instability in Haiti and other countries, it should send ideas as well as aid. Promoting economic democracy through an anti-monopoly policy and making at least part of economic aid conditional on anti-monopoly reform would be an essential first step.