Tuesday, February 09, 2010

Oxfam asks: Why is Haiti poor?

In the media coverage that has followed the earthquake in Haiti, many stories have asked, why is Haiti so poor to begin with? Answers to this question range from past dictatorships to deep debts the country has suffered since it's independence.

From Oxfam blogs, writer Chris Hufstader has this good roundup of sources that help us to answer this question. We have attempted to preserve the links that Hufstader references in our snippet below.

Economist Tyler Cowen offers a few theories in his blog Marginal Revolution. (Thanks to Yale economist Chris Blattman for the reference.) Cowen proposes the historic (premature independence), financial (huge debt to France that took 100 years to pay off following the revolution), agricultural (ways of growing coffee and sugar cane). And of course, there is the political (the Duvalier clan wrecked Haiti). Cowen concludes that he is not particularly satisfied with any of these reasons.

As the weeks have gone by, there has been more and more revealing analysis of this question in the media. Other reasons for poverty in Haiti include macroeconomic decisions: As Haiti expert Bob Maguire pointed out on National Public Radio last week, the US and other countries encouraged Haiti to build factories, but did not invest in agriculture and education at the same time. This attempt at the “Taiwanization” of Haiti—as Maguire calls it—failed.

Trade liberalization has a direct impact on poverty in Haiti. Rice growers in particular bore the brunt of trade policy, which we cited in our research report “Kicking Down the Door” in 2005:

“In 1995 the IMF forced Haiti to cut its rice tariff from 35 per cent to 3 per cent, with the result that imports increased by more than 150 per cent between 1994 and 2003. Today, three out of every four plates of rice eaten in Haiti come from the USA. This is good news for Riceland Foods of Arkansas, the biggest rice mill in the world. Riceland’s profits jumped by $123m from 2002 to 2003, thanks, in large part, to a 50 per cent increase in exports, primarily to Haiti and Cuba. But it has devastated farmers in Haiti, where rice-growing areas now have some of the highest levels of malnutrition and poverty.”

1 comment:

David Maxwell Fine said...

I read recently that massive corruption had a lot to do with Haiti being poor - as though the president were like a head Mafioso, instead of the leader of the country. But the question is one I was thinking of recently looking at country GDP numbers... But Cuba's per capita GDP at 9,700 is considerably wealthier than Haiti...

Certainly one would think there's a way to make any small country's people live a decent life, even if it's frugal. One probably doesn't need much to get by in Haiti - maybe $500 month? That's a guess - maybe Povertynews blog could find out... But extreme poverty, that seems like its probably politically created through political corruption and/or authoritarianism, the former of which presumably comes with the latter...