Haiti and its national and international debt status

Fri, May 26th 2017, 09:05 PM

Up to this date, around mid-May 2017, the national and international debt of the Republic of Haiti hovers around US$3 billion. This sum represents $1 billion of internal debt and $2 billion of external one. It is a very small amount if we compare Haiti's debt with other Caribbean countries that are generally overwhelmed by external and internal debts.
By way of comparison, the island of Puerto Rico is in full-fledged bankruptcy, saddled with a debt of $91 billion for a population of 3.5 million inhabitants while Haiti has ten million people.
This unusual situation of a rather solvent country, which Haiti shares with Guyana, is a double-edged proposition since these two nations are also the poorest of the Caribbean Community (CARICOM) region. They are poor for similar reasons: corruption, lack of sense of belonging among their citizens and disregard for their human and natural resources.
Haiti, because of its situation of extreme poverty and the calamities that have plagued the country recently, had its external debt erased twice. The Inter-American Development Bank, with support from the United States, orchestrated an erasure of Haiti's external debt in 2009 to the amount of $4.4 billion. There was still some $484 million left in the account that was wiped out with the support of a $236 million payment to the IDB by the United States after the earthquake of 2010.
On the other side, Venezuela, one of the largest creditors of Haiti because of the PetroCaribe program, has also erased $300 million of its debts after the earthquake of January 12, 2010.
The culture of corruption and the lack of sense of vision and of essential priorities exhibited by the past Haitian governments since 1956, and especially after 1986, have occasioned a waste of the debt instrument in ostentatious and personal expenses that had nothing to do with nation-building initiatives. As such, when the external debt had been erased, the two governments that preceded the current Moise / Lafontant government played the game of the cicada and the ant, singing without thinking of tomorrow.
Haiti now has an annual debt service in the order of $15 million, which represents a much higher sum than its budget for education ($5 million) or for agriculture ($7 million), which is the essential sector of employment for the majority of Haitian citizens, mainly those who live in extreme poverty in the rural world.
So Haiti goes from Scylla to Charybdis in its budget formulation, in its spending, and its projection towards the future. It must come out of this unhealthy paradigm to enter into a nation-building canvas that will make it vibrant, rich and prosperous forever. I propose two solutions that will facilitate that task.
First of all, as I have indicated throughout my essays with deliberate repetitions so the concept will be well imbued in the imagination of each reader, Haiti must conceptualize a national budget that takes into account the main headings of the core principles of nation-building:
1. Permeate the sense of belonging among all citizens within its territory;
2. Build excellent infrastructure and healthy institutions everywhere so that the Haitian citizen or resident is no longer nomadic at home and abroad;
3. Engage without internal struggle and without grumbling in an affirmative action mode towards the rural, the ghetto and the middle-class world to catch up with the small sector of the well off that has fully succeeded;
4. Rekindle the emancipator mission of Haiti towards its own citizens and towards the disinherited of the world;
5. Pass on to the youth the notion that the motherland is a continuous creation; it will have to complete the work of its ancestors to leave a Haiti which must always be a light on the hill.
The country's national and external debt as well as its waste material represents a resource that we can exploit. Norway is buying waste from other countries because it has already turned all its garbage into electrical energy. The external debt to the PetroCaribe program, which accounts for 90 percent of Haiti's external debt, can be converted into a wealth creation instrument for the foreseeable future.
In applying debt swapping for natural features or debt swap against the renovation of nature, the country will generate a sovereign wealth fund that will be as large and as deep as that of Singapore or China, which is in the order of more than $100 billion.
With a solicitation of $200 million a year from the Scandinavian countries ($100 million) and environmental organizations ($100 million), Haiti can cover all its majestic mountains (still owned by the state) with mahogany, cedar, and ebony and other precious hardwood that will make it as rich as it was during the colonial era when it was dubbed the 'Pearl of the Islands'.
The sum of US$200 million will be used to pay the external debt annually and the same value in national money will bring back the majestic flora of Haiti, contributing to the world fight against global warming. Its domestic debt, especially to the Bank of the Republic of Haiti and to the commercial banks, will be met by the financial returns from the ten PPPs -- public and private partnerships -- established with the support of the private sector for the building of roads, ports, airports, energy, communication, irrigation and a transport system.
With a population of ten million inside the country and four million in the Diaspora that demands services; Haiti represents an extremely interesting market for any leader with a minimum of foresight and any entrepreneur with a minimum of creative vision.
Haiti shall rise again from its ashes as the legend of the great king Henri Christophe, the builder of our Citadel, has enshrined in his insignia. It can be seen in this video of young Haitians celebrating Haiti's Flag Day this past May 18. It must from now on engage in the design of the management of its forthcoming abundance!

Jean H Charles LLB, MSW, JD, is a regular contributor to the opinion section of Caribbean News Now. He can be reached at jeanhcharles@aol.com. Published with the permission of Caribbean News Now.

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