Chris Blattman

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Haiti and debt

After a dramatic slave uprising that shook the western world, and 12 years of war, Haiti finally defeated Napoleon’s forces in 1804 and declared independence. But France demanded reparations: 150m francs, in gold.

For Haiti, this debt did not signify the beginning of freedom, but the end of hope. Even after it was reduced to 60m francs in the 1830s, it was still far more than the war-ravaged country could afford. Haiti was the only country in which the ex-slaves themselves were expected to pay a foreign government for their liberty. By 1900, it was spending 80% of its national budget on repayments.

In order to manage the original reparations, further loans were taken out — mostly from the United States, Germany and France. Instead of developing its potential, this deformed state produced a parade of nefarious leaders, most of whom gave up the insurmountable task of trying to fix the country and looted it instead.

In 1947, Haiti finally paid off the original reparations, plus interest. Doing so left it destitute, corrupt, disastrously lacking in investment and politically volatile. Haiti was trapped in a downward spiral, from which it is still impossible to escape. It remains hopelessly in debt to this day.

Emphasis mine. From the London Times. Hat tip to Naunihal.

Having such a heavy weight round one’s neck is an onerous thing. But I would still look into early governance patterns and power relations, land distribution, and social control for clues to Haiti long struggle against poverty and disaster.

I am reminded of Coffee and Power, by Jeffrey Paige, that looks at the widely different paths four Central American nations took due to (somewhat idiosyncratic) patterns of land distribution and control for coffee production. Coffee is one of those rare crops that produces profitably at several levels of scale.  Costa Rica, which opted for smallholder production, would soar, while Guatemala, which moved towards haciendas and plantations, would crumble. This area remains understudied.

I’m conscious that historical ruminating is callous at a time of crisis. At the same time, the reason why we keep hearing that Haiti is devastated by earthquakes and hurricanes, and the Dominican Republic or Bahamas is not: one has remained poor and badly governed, while the other has not. There are nearly 20 earthquakes of similar magnitude a year on the planet. In some nations disasters kill masses, while in others they merely damage (and so don’t make the news).

In the meantime, my brother tells me that translators (Creole ones, especially) are the relief resource most scarce at the moment. If you speak it, maybe consider a trip. Otherwise, do consider giving.

9 Responses

  1. You write :”By 1900, it was spending 80% of its national budget on repayments.”, but from the info I got from several articles, the debt to France was completely paid off after at least 75 years, in 1879, 1883 or 1885 (Depending of articles).
    So what were these repayments for in 1900? What are your sources?

  2. Well it’s a great article except for the last line. You really can’t travel to Haiti now. It’s dangerous.

    1. Well, I think if you’ve done what it takes to learn Haitian Creole, there’s a good chance you can handle yourself better than most of the relief workers heading over right now. They show up with French at best, a language spoken in government offices and schools, but not by the majority who have no access to such things. They will need translators, big time.

  3. Continuing to build up their debts is not the solution for a country like this to become developed, make progress or contribute to the world as a whole. I always believe we are punishing ourselves by not helping these places flourish.

  4. But land distribution, power relations, governance, etc. were all DEEPLY informed by U.S. interference throughout the 20th century. See The Uses of Haiti.

  5. I am reminded of the consequences of the reparations imposed on the Germans after WWI — Keynes’ “The Economic Consequences of the Peace.”

    And another thought — I can’t blame the French for Napolean, but at some point you have to wonder why they did not forgive the debt.

  6. I don’t buy the argument that “leaders gave up on the insurmountable task of fixing the country and instead looted it”. I believe that leaders will loot a country if they are not constrained regardless of the total wealth of the country. Perhaps if the country did not have to pay the debt and there was more for domestic consumption, that would mean more lootable resources and even more competition for leadership.

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