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Haiti - Profiting from misery?

By Saeed Shabazz -Staff Writer- | Last updated: Jan 26, 2010 - 12:50:44 PM

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( - Questions ran rampant across America just a few days after the 7.0 earthquake that destroyed Haiti's capital Port-au-Prince, with concern about whether U.S. corporations would profit from the disaster and whether international money lenders—like the World Bank and International Monetary Fund—would also use the tragedy to make a profit.


Two days after the quake, Democracy Now, a daily independent radio and television program that is nationally syndicated, aired segments of a Jan. 13 speech given by Canadian journalist and author Naomi Klein at the New York-based Ethical Culture Society. “We have to be absolutely clear that this tragedy (Haitian earthquake) under no circumstances, be used to, one, further indebt Haiti, two, to push through unpopular policies in the interests of our corporations,” warned Ms. Klein.

Ms. Klein, the author of “Shock Doctrine,” has written about how in times of crisis, otherwise improbable policies are considered and enacted because of the feeling that something must be done. The problem is that those desirous of profits push agendas and policy changes that may not be good for the country in crisis.

The push may be for loans, lowering of wages or protections for workers, moving people, land grabs or other life and society-changing decisions.

“The shock doctrine is the use of disasters to avoid democracy—using the state of dislocation following a disaster to say that people aren't able to make decisions, so someone else needs to do it for them. But that means policies are pushed through very quickly—unpopular policies that were often on a wish list for elites anyway, but that can suddenly be implemented because people are either traumatized or literally wiped out. In the case of Haiti, the Heritage Foundation didn't even wait 24 hours before they called for the Obama administration to reform Haiti's economy. They also suggested that George W. Bush be appointed and, lo and behold, he was appointed the next day,” Ms. Klein told Newsweek's online edition.

“When it comes to distributing aid, speed is of the essence. But it's entirely inappropriate to be setting priorities that Haitians will have to live with for decades, like with this Marshall Plan (proposed by a major investor and others at a Florida meeting with Bill Clinton, a UN envoy to Haiti.) When it comes to rebuilding, speed can be very damaging—and can be an excuse for avoiding citizen participation. If there's anything we know from New Orleans and Iraq, there needs to be transparency. I don't usually do this, but I'll quote John McCain: early on with Iraq, he said that Iraq is a big pot of honey and there are a lot of flies. Right now, Haiti is the pot of honey. Billions of dollars are going to be allocated for reconstruction. If we want to make sure that whatever gets built is what Haitians want built, then let's lay down that principle now. Once contracts are handed out, there's no going back,” she added.

Some of the concerns about corporate bloodsucking start with credit card companies that stand to make a killing off of transaction fees as relief organizations solicit credit card donations. Some 97 percent of the funds will make it to those organizations with the banks and credit card companies keeping three percent for fees. After the initial Jan. 12 disaster some credit card companies said they would forgo the fees, but will that last forever? It doesn't seem likely.

A Jan. 23 CNN iReport pointed to Wachovia/Wells Fargo, saying that for every “$1,000,000 that customers donate, the bank makes $30,000 in fees.” “Most likely Wachovia will recoup the $100,000 they donated to the tragedy and will probably turn a profit,” said the iReport, which was submitted by someone from the public.

“There is no telling how much of a profit U.S. pharmaceutical companies will make from sending medicine to the thousands of victims from the Haitian earthquake,” said Carl Dix, national spokesman for the Revolutionary Communist Party USA. Mr. Dix and a plethora of activists held a Jan. 22 protest in front of the U.S. Mission to the United Nations and one of the issues they raised was businesses profiting from the Haitian crisis.

“The question of corporate profiteering has a historical precedent, a present day fact; and unfortunately an issue that faces us in the future,” Mr. Dix told The Final Call. “People need to act to correct this problem, but it is not something we are going to be able to correct overnight.”

“There's a huge amount of lobbying going on already. But there are really core questions about what Haiti's postquake economy should look like. So, for example, the garment sector wants the new economy to give them shiny new export zones, tax breaks, public money to rebuild their factories—but we also know that they don't pay taxes that build Haiti's public sector, which is part of what deepened this disaster,” Ms. Klein told Newsweek.

“Klein's argument is absolutely right, but it may be too soon to tell with Haiti right now,” said Bill Fletcher Jr., executive editor of the and founder of the Center for Labor Renewal.

Mr. Fletcher, who for years has been a pro-Haiti advocate, said much of the condemnation concerning the motives of corporations is at best speculative. Corporations, “for a variety of reasons,” are very concerned about their image, so it is good public relations to be seen helping the Haitian people, he said. Mr. Fletcher added there may be immediate profiteering in the use of mercenaries in Haiti, given the fact that the Haitian police force has been decimated by the earthquake.

“What we do or don't do in reference to the ‘Shock Doctrine' is extremely important at this time,” Mr. Fletcher added. He referenced the “free South Africa movement” as a model that can be called on to show how “a united front” in the U.S. can change policy. Pressure from the movement led to an end to U.S. support of the White minority government and contributed to its eventual downfall.

Activists and observers note reconstruction programs must be put into place as the search and rescue phase comes to a halt in Haiti. The Council for Foreign Relations, in a position paper, projected “a long-term reconstruction effort” that “could take decades and cost billions.” The question is, where will the Haitian government get the money for the reconstruction and who will get the contracts? And, who will benefit?

Advocates are demanding grants instead of loans from international lending institutions, which Haiti already owes billions to.

Since Haiti lacks the machinery and materials for massive rebuilding, American corporations such as Bechtel, Halliburton, Stone and Webster and Browne & Root, may be called upon—and they don't come cheaply. This could bring more pressure to take out loans.

Haiti has an external debt of $1.3 billion, according to Jubilee USA, which fights for debt reduction for developing nations. Jubilee states that over half of that debt is from loans granted to dictatorships that controlled Haiti in the 20th century. The Center for International Policy reported that Haiti spent $57.4 million in debt service in 2003. Jubilee USA and other activists are demanding that all of Haiti's external debt be “canceled immediately without conditions, as a matter of justice.”

In June 2009, Haiti's debts were cancelled for debts acquired up until 2004. But, Haiti has borrowed money since 2004, and it is projected to pay more than $100 million over the next 10 years to the IMF and the Inter-American Development Bank, which serves as Haiti's largest development financier.

The World Bank and the IMF say they are willing to forgive all of Haiti's external debt, but the IDB will only say it is considering debt cancellation.

“Recovery operation funds for Haiti need to be in a bank, in a single transparent, multi-donor recovery fund that is controlled by Haitians,” said Dr. Jeffrey D. Sachs, an American economist and director of the Earth Institute at Columbia University, in a recent position paper on how to protect Haiti against predatory international lending.

Related news:

Analyzing Haiti's history of hardship (Web Video, 01-14-2010)

Disaster hits Haiti: Magnitude 7.0 Earthquake (FCN, 01-13-2010)

Naomi Klein issues warning on "Disaster Capitalism" in Haiti (FCN, 01-14-2010)

How the U.S. impoverished Haiti (FCN, 09-10-2003)