Waiting for all the right-wing trolls to “explain” why this is so bad.

bernard,

I would be interested to find that out as well. And I am generally right-wing.

here is an outstanding blog post by a real expert on debt in Haiti (it’s a bit out of date; Venezuela is evidently no longer ‘mum’). It really is worth reading. I know Naomi Klein and her acolytes enjoy IMF bashing, but the idea shifting away from debts to grants has been part of Washington orthodoxy for some time. The IMF, however, is a lending organisation and it would be foolish to say lending organisations aren’t ever useful. Quote re Haiti: “Structurally confined to lending, the IMF hopes to be able to forgive its new loan after it is made, turning it into a grant. “

I’d also recommend this short pdf by development expert Paul Collier … it’s actually a year old, so it shows what a state Haiti was in before the quake hit. that is I hope a non-pdf version.

“Waiting for all the right-wing trolls to “explain” why this is so bad.”

OK, I’ll bite. And not just to point out that all too much is “unprecedented” in Naomi Klein’s experience. Like, you know, capitalism and trade making the poor richer and all that well trodden path.

So let us ask, is debt relief for Haiti unprecedented? Did it in fact need an earthquake to happen?

Well, no, actually, it’s not unprecedented and it didn’t need an earthquake.

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/LACEXT/0,,contentMDK:22232346~pagePK:146736~piPK:226340~theSitePK:258554,00.html

(apologies, no idea how to embed that link, I know no html).

“Washington, June 30, 2009 – Haiti was granted US$1.2 billion of debt relief by reaching the completion point under the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative approved by the Boards of the International Development Association (IDA) and the International Monetary Fund (IMF). Haiti is now the 26th country to reach the completion point under the Initiative. Debt service savings result from the HIPC Initiative (US$265 million) and the Multilateral Debt Relief Initiative (MDRI) (US$972.7 million).”

So just over half a year ago more than 50% (I’ve seen somwhere a number that Haiti has about $900 million of debt at present) of Haiti’s debt was forgiven without an earthquake.

So there’s definitely some blather going on over at The Nation (quelle surprise!).

Now as to bad ideas rather than simple ignorance:

“Watkins and others will continue to follow the issue, holding the IMF to its commitment to debt relief and non-conditionality.”

It’s that non-conditionality thing.

Start from the idea that there really are governments out there that do entirely counter-productive things. Policies enacted that really do make the poor poorer. I shouldn’t have any difficulty of convincing people about things like that around here: although we might disagree about what they are.

Now, the debt forgiveness of 6 months ago was based on some conditions. And the multi-lateral debt agencies have been burnt far too often (for example, Kenya in the 90s promised the very same reform four times and reneged, getting new loans for the same promise every time) to accept promises now: they want to see action then you get the goodies.

So, what changes were demanded?

“To reach the completion point, Haiti carried out a number of reforms despite a challenging environment marked by major natural disasters, a food and fuel crisis, difficult political conditions, and the impact of the global economic downturn. These reforms were aimed at establishing a more stable macroeconomic environment and at implementing its national poverty reduction strategy. Haiti strengthened public expenditure management by better focusing poverty reduction spending, producing audited government accounts, ensuring commitment to an asset declaration law, and adopting a law on public procurement.

In addition, Haiti strengthened tax and customs administration and improved debt management and reporting. In education, Haiti established a financing mechanism to allow over 50,000 additional children to attend school, allocated over 20 percent of recurrent spending to education, and made progress toward implementing the teacher training program. In health, Haiti approved an HIV/AIDS prevention and treatment plan and improved immunization rates for measles and DPT3.”

I shouldn’t have much difficulty in convincing people around here that those were good things that the government of Haiti was being forced (or bribed, your choice) to do.

Now, it’s very important for my argument to make the difference between emergency aid and development aid. Emergency aid is of course to be offered with only one condition: what can we do to help? Feeding the starving, watering those without water, clothing the naked, housing the homeless, medical treatment….yes, that long list. Dig deep and send the money, trained people and resources necessary, of course.

Development aid is an entirely different matter. We really do want conditionality there. Because there really are (as that list from the World Banks shows) policy problems as well as resource problems in Haiti.

Is that trollish enough?

There is also a petition on Number 10′s website that I believe is worth signing on the same issue.

BTW, interesting Paul Collier piece at the New York Times today. Wat might be done in hte medium term (ie, development, not emergency).

He points out that Haiti produces excellent coffee but that most of it is smuggled out into the Dominican Republic and almost no value is added in Haiti. So, why not try to convince one of the coffee chains to produce a Haiti blend? Add a premium to it for development? Not quite a Fair Trade idea, simply an obvious pointing to the fact that people will, undoubtedly, for the next few years at least, be willing to pay a premium for coffee from Haiti.

Conditionality of one sort of another cannot be avoided. If you observe a government embezzling loaned money and depositing it in Switzerland, I think most people would want to stop loan disbursements – there’s a “condition” right there.

I love how when the IMF or World Bank does something like canceling debt, this is portrayed as them bowing to pressure from the likes of Ms KIein, as opposed to simply doing it because they are there to help poor countries. Of course sometimes that involves creating new debts … unless you really want to argue that the big development agencies should shut down lending, close the African Development Bank, shutter the Inter-American DB, the Asian DB (as it happens, I think less lending would be a good thing but I’d not rule it out). The whole stance of this article is that the IMF and WB don’t want to help Haiti and are reluctantly pushed into down the right thing by valiant campaigners. I suppose if you start from that premise, the rest follows.