Thursday, January 31, 2013

Jamaica Betting Big on Panama Canal Expansion

January 31, 2013

The expansion of the Panama Canal is to be completed in 2015. In preparation for this, Jamaica has embarked upon an ambitious program of infrastructure development to position it as a “global transshipment and logistics hub”—joining the likes of Singapore, Dubai, and Rotterdam.

However, the cost to join the ranks of such global hubs is estimated to cost Jamaica anywhere between US$8 and $10 billion. While Jamaica is endowed with natural advantages, such as geographic proximity—it is the island closest to Panama and home to the world’s seventh largest natural harbor in the world—it is also saddled with a crippling amount of debt.

In order to successfully complete the daunting project before the canal opens, Jamaica will have to dredge the Kingston harbour in order to ensure that the massive ships will be able to enter port, expand existing port facilities, construct a dry dock for ship repairs, establish a transshipment commodity port, an air-cargo and passenger facility at Vernamfield, and develop the Caymanas Special Economic Zone.

The Caymanas SEZ alone is a massive undertaking, consisting of a 1,500 acre site, with an independent energy source and integrated port facility developed through a public/private partnership. The Jamaica Investment Forum touts that this will be Jamaica’s first ever integrated industrial zone in the country, with the potential to provide up to 21,000 jobs. The air-cargo facility at Vernamfield will also host a smaller export processing zone.

Jamaica’s Minister of Industry, Investment, and Commerce, Anthony Hylton, has stated that plan is now the “flagship project” to stabilize the country’s economy and that the government has elevated it to the status of a national priority. The Government of Jamaica has estimated that the massive project would provide a 17% increase in GDP for the country over the upcoming decade. Given that Jamaica’s economy has largely stagnated, the World Bank noting that it had little and often no growth over the past 40 years, the potential opportunity makes the project impossible to turn down.

Mr. Hylton argued that “It is our opportunity to leverage the radical shift in the geography of global trade to build and anchor an engine of growth that will generate sustained growth and jobs for years to come.”
In his vision, the transformation goes much more beyond the establishment of a transshipment and logistics hub. Proponents are presenting and packaging the project as a savior that will literally transform life on the island. “Jamaica’s surplus of professional and skilled workforce will be a primary factor in the success of Jamaica’s logistics hub and the corollary initiative such as the establishment of an international financial services center. We will also be relying on our robust and expansive telecommunications infrastructure across the island as well as our extensive subsea fiber network,” Hylton added.

While the World Bank, Inter-American Development Bank, and promises of private investment from companies based in China and Singapore look promising in regards to covering much of the costs, the Caribbean has been sold tales of modernization and prosperity before. While remaining cautiously optimistic about the impact such a project would have upon Jamaica, it would be important to remember how the Caribbean Basin Initiative of the 1980s was designed to turn the Caribbean into an archipelago resembling mini models of Taiwan and Singapore. It obviously didn’t work.

While it can be argued that the Caribbean lacked the infrastructure needed to modernize in a similar way to the Asian tigers, the Caribbean lost out in the long run primarily because it was cheaper to place sweatshops in China and Mexico. Despite Jamaica’s committed drive to construct the necessary facilities to serve as a logistics hub, it will be in competition with similar deep harbour projects in the Bahamas, the Dominican Republic, Costa Rica, Colombia, and even Cuba. Additionally, the American ports of Miami and Jacksonville are also hoping to steal some of the Caribbean’s thunder. Thus while the upside is huge, it is not guaranteed by any means. It hinges on promises of funding and completion targets being met in an extremely narrow window of time.

Hopefully this project will serve as a national project for Jamaica, galvanizing its potential and provide a light at the end of the tunnel. However, if Jamaica is going to truly capitalize on such a project, it cannot forget to make additional funds available for education and social services. While Jamaica certainly has a pool of skilled workers in the targeted sectors, the completion of such a project calls for a great deal more. At the moment, Jamaica’s debt serving eats up 50% of the annual budget, while health and education combined only accounts for 20%. Perhaps the promise of the project will allow Jamaica to have more breathing room from the World Bank and International Monetary Fund negotiations.

Whatever happens, the coming six months will be crucial in determining whether promises of funding are kept and deadlines followed. Despite the late start and magnitude of the project in comparison to their other Caribbean competitors, Minister Hylton remained confident, stating that “We are late but we are an island of sprinters, so we can get there.”

Thursday, January 24, 2013

CIDA Continues its History of Controvery in Haiti

Originally Published: January 24, 2013

On January 8, 2013, Canada’s Minister of International Cooperation—and head of the Canadian International Development Agency (CIDA)—blindsided Haiti, the United States, and the United Nations by announcing through the media that he would be freezing any further distributions of development aid. The announcement made just before the three year anniversary of the devastating January 12 earthquake has since created a great deal of controversy for Fantino both within Canada and abroad, but so far there have been no signs that the decision will be reversed. Fantino’s reasoning for the shift was due to his disappointment with the slow process of reconstruction and thus attempted to justify this position by remarking “Are we going to take care of their problems forever? They also have to take charge of themselves.”

Such a poor characterization of the challenges faced by Haiti and the Haitian government’s handling of the reconstruction funds is neither fair nor accurate. According to the CIDA website, the Haitian government does not receive any direct funding and is not listed as a primary partner on projects dating back to 2006. In short, the reality is that the Canadian government does not in fact give aid to the Haitian government, it instead channels aid to multinational organizations and NGOs like World Vision, the Red Cross, Oxfam, and the World Food Program. Judging by the absence of any criticism leveled at such organizations by Fantino, it would be safe to assume that the systemic failure (meaning individual successes in a sea of failure) and siphoning of funding by the NGOs was not problematic.

While agreeing that the slow pace of reconstruction was a disappointment, Haitian Prime Minister Laurent Lamothe challenged the assertion that the Haitian government was the key figure to blame, stating that “For any future co-operation, when it’s decided to resume, we will ask the Canadian government to focus on the priorities of the Haitian government … Basically, the development assistance, because of the perceived weakness of Haitian institutions, was routed directly to NGOs (non-government organizations) and Canadian firms … That weakened our institutions.” Such has been the deeply politicized pattern governing Canadian aid to Haiti since the late 1990s.

While Canada has never released an official document outlining the reasons why they changed distribution of aid to Haiti, using the common practices of CIDA as a guide, it is generally assumed that they have followed in the steps of the United States by circumventing the Haitian government via NGOs. The United States has openly acknowledged this policy—outlined in the Dole Amendment—which barred USAID from directly funding the needs or projects of the Haitian government.

The Clinton administration instituted the Dole Amendment in 1995 after prominent Republican figures claimed that the murder of one of their most vocal anti-Lavalas, anti-Aristide supporters, Mireille Durocher de Bertin, was politically moti­vated. As a result of the restrictions upon aid to Haiti, the United States directly suspended $50 million of aid to the Haitian government, with the Dole Amendment being considered a part of a wider Republican plan to undermine President Clinton’s perceived foreign policy successes, leaving both the Haitian people and state as collateral damage.

A U.S. Army War College Strategy Paper released in 2001 candidly outlines the current policy of the United States towards Haiti, stating that “By keeping initial aid out of the hands of the Haitian government, the United States can ensure that corruption is minimized, while limiting the power of the Government of Haiti (GOH). Reduced corruption could be accomplished by bypassing the GOH in handling any USAID funds, working instead directly with Non-Governmental Organizations (NGO) to provide needed aid. Not only would this reduce corruption, but it would also demonstrate to the Haitian population that the power of the GOH is limited.”

Ironically, the United States aimed such harmful policies only at the Haitian government, which channeled a significant portion of funds towards instituting basic and accessible levels of public healthcare and education. For example, the Lavalas administrations of Aristide and Preval built more schools in Haiti between 1994–2000 than the whole prior period between 1804–1994 (Lavalas built 195 new primary schools and 104 new public high schools). With Aristide’s second election in 2000, the United States and Canada pressured the Inter-American Development Bank to block loans to fund Haiti’s water and sanitation programs claiming that the successful completion of the project would increase the popularity of the Lavalas movement. The importation of the cholera epidemic by the United Nations Stabilization Mission in Haiti in October 2010 has only compounded these aid failures.

It is important to note that while the pre-earthquake economic circumvention of the government via NGOs played a vital part in the undermining of the Haitian reconstruction process, Canada and the United States have also lent political support and funds to the highly controversial elections in 2010 in which 14 political parties were banned from participating – including Lavalas. As a result, the government of President Michel Martelly and Prime Minister Laurent Lamonthe came to power via the lowest voter turnout for a Presidential election in the Western Hemisphere.

Such political manipulation is not new however, as during Aristide’s second term CIDA  specifically channeled development aid to fund opposition groups such as the Group of 184 in order to destabilize the government. Prominent members of the Group of 184 were also linked to Canadian garment manufacturers Gildan, who operated sweatshops within Haiti. The opposition groups such as the National Coalition for Haitian Rights highlighted the human rights abuses alleged to have been committed by top Lavalas officials in an effort to undermine international and regional support for Aristide. With the success of the coup in February 2004, the very same CIDA-funded groups reporting on the alleged abuses of Aristide fell totally silent when the illegal regime of Gerard Latortue was carrying out widespread human rights abuses in the streets of Port au Prince.

With this troubled past of political and economic intervention in Haiti in mind, CIDA’s hypocritical accusations of corruption and mismanagement should be less surprising. With Haiti currently one of Canada’s largest foreign aid concerns, it remains to be seen how the relationship in regards to the freezing of development aid could degrade any further. Haiti has not been receiving the money collected for reconstruction efforts, but has instead been left to deal with the blame and accusations of corruption. As a matter of fact, when responding to the criticism about his decision to freeze aid Fantino remarked We should be thanked upside down and sideways. We pledged $400 million over two years in March 2010 at an international donors conference and we are one of very few countries that actually meets its commitments.”

It remains unclear why the Haitian people should even think to thank Fantino, his predecessors, or CIDA. Fantino remarked that “Canada’s assistance will not be a blank check.” Indeed Fantino must be clueless to assume that Canada’s “assistance” to Haiti hasn’t been without conditions. At every opportunity CIDA has sought to undermine Haiti’s struggle for self-determination, choosing to empower corrupt industrialists, unaccountable NGOs, and political puppets instead of helping to build and support a Haitian state via a democratic process which would be capable of handling its own affairs.

Monday, January 14, 2013

Haiti Three Years Later: Reversing the Arrow of Corruption

Haiti Three Years Later: Reversing the Arrow of Corruption

In The Diaspora

Stabroek News (Guyana)

Kevin Edmonds is a freelance journalist and doctoral student in Political Science at the University of Toronto. He is one of the authors of the recently released report by a Harvard University based research group, on MINUSTAH in Haiti.

Editor’s note: Saturday marked the third anniversary of the earthquake in Haiti. A letter to the British Guardian newspaper, and signed by members of the Global Women Strike, the, Women of Colour Global Women Strike, US, the Haiti Action Committee (US) and Red Thread (Guyana), points out that “the robbery of Haiti by governments, NGOs and private contractors, under the protection of UN troops which have been occupying since 2004, is more glaring than ever.”  The letter also underlines the double standard in the treatment of former presidents Jean-Bertrand Aristide (deposed by a US, French and Canadian backed coup in 2004) and Jean Claude Duvalier (the dictator who was removed by popular forces in 1986), noting that “President Aristide is to appear in court on Wednesday on charges of exploiting street children.  Thousands protested these outrageous charges last week, forcing a week’s postponement of the hearing, and will protest again tomorrow.  The LafanmiSelavi centre for street children was founded in 1986 under parish priest Aristide, and young people have been his staunchest supporters.  The centre was burned down twice and each time the Aristide administration rebuilt it.  Rumour has it that the Canadian and French embassies are behind the charges and that those making them have been promised material benefits.  Chief prosecutor Delile was one of the leaders of the 2004 coup. In the meantime, former dictator Duvalier whose death squads, the TontonMacoutes, imposed decades of terror, has had all charges for crimes against humanity (rape, torture, assassinations, disappearances) dropped, and has been given a diplomatic passport by the [current] Martelly government.  Martelly, himself a supporter of the TontonMacoutes and FRAPH (a CIA-funded paramilitary group), was put in power by the US through rigged elections (Aristide’s party was not even allowed to stand); this has so far guaranteed him and Duvalier immunity.” Signatories note that they would mark the anniversary demonstrating outside of the Red Cross. This week’s column helps us to understand the significance of such a decision. In the aftermath of January 12, 2009, what has been truly obscene is those who have profited from the earthquake, the amount of resources spent in the name of Haitians that Haitians have yet to see, and those governments and international institutions that continue to perpetuate this intolerable situation.

In the three years that have passed since Haiti was devastated by the earthquake, it has stood as a testament to the deep seated paternalism and naked hypocrisy of international development aid. For those that do not believe in the existence of disaster capitalism or of the neocolonial intentions of foreign development agencies, Haiti must be presented as exhibit A.

The failures of the international reconstruction effort have become well known to most. Three years later 300,000 people still remain without shelter, nearly 8,000 people have died from the cholera epidemic imported by the United Nations troops, food insecurity remains high and there has been a prioritization of sweatshops and five star hotels over much needed infrastructure and housing.

During the three years of increased foreign intervention, the debate surrounding Haiti has followed a path of initial optimism spouted by its international saviours to a muted pragmatism, and most recently has descended to placing absolute blame on the Haitian people and their government for the failure of reconstruction. They argue that the reason why the failure has occurred is due to Haiti’s endemic corruption.

According to the Oxford dictionary, the generally accepted definition of corruption is “dishonest or fraudulent conduct by those in power, typically involving bribery”. With this guideline, it would be naïve for us to state that corruption is non-existent in Haiti – or any other country for that matter. The problem in this instance has to do with the matters of power and access to resources, especially given the small scale of Haitian corruption in comparison to that of the international donor countries, multinational corporations and NGOs. The blame and accusations of corruption only flow one way.

One of the most notable examples of this has been Canada’s recent call to cut development aid to Haiti. Since 2006, Canada has been one of the most influential donors in Haiti, contributing Cdn$1 billion in the form of development aid. On January 8, 2013, Canada’s International Co-operation Minister Julian Fantino announced that Ottawa was concerned about the slow pace of development, and as a result would not fund any new programmes in Haiti until it found a new and better way to help itself, remarking that “Canada’s assistance will not be a blank cheque”.

Fantino went on to state that Canada “should not take gratification in the simple transaction of international aid” and that “Our government’s international development goal is to help countries, their governments, and their people help themselves… we expect transparency and we expect tangible results for those most in need.”

The claim by the Canadian government that Haiti is responsible for the current situation is without merit or much thought. Canada’s government to government assistance is extremely low and consisted primarily of the training of Haitian security forces and building prisons. It must also be noted that CIDA is no impartial actor in Haiti, as it played a major role in severely weakening Haiti’s government institutions by drastically reducing aid to the Aristide government, funding disinformation campaigns and channeling resources to anti-Aristide groups which eventually carried out the 2004 coup.

Aside from the less admirable legacy of the agency, the list of the Canadian International Development Agency (CIDA) funded projects in Haiti is quite long. A deeper look at CIDA’s multi-million partner organizations going back to 2007 reveals that NGOs such as Oxfam Canada, CARE Canada, World Vision, Save the Children Canada and larger multinational organizations such as the World Food Program and the United Nations Development Program have received virtually all of the contracts, not the Haitian government as Fantino implies. As such they do not have control over any of the Canadian funding sent to Haiti, and one would think should not be on the hook for the failure of projects or the disappearance of the money. Yet this is not the case.

A March 2012 report from the Washington-based Center for Economic and Policy Research established that a similar pattern of channeling reconstruction funds to Non Governmental Organizations (NGOs) and non-Haitian contractors has been followed by the United States. The report revealed that out of the nearly US$400 million spent by USAID in Haiti at the time of publication, only 0.02% of the procurement contracts went to Haitian firms. On the opposite side of the procurement spectrum, U.S. firms concentrated in the Washington DC, Virginia, and Maryland area were rewarded with an astounding 77.46% of the contracts.
The report went on to note how reconstruction contracts were drafted with loopholes such as an “indirect cost rate” which allows for the repatriation of funds. Such loopholes “allow a portion of all funds allocated to go towards costs not related to the actual program, in other words, back to their headquarters inside the Beltway. Both Chemonics [a construction contractor] and USAID declined to provide HRRW [Haiti Relief and Reconstruction Watch] with the Indirect Cost Rate stipulated in their contract.”

The Canadian accusations towards Haiti bring to mind the statements made by former Organisation of American States (OAS) Special Representative to Haiti, Ricardo Seitenfus, who bluntly remarked that “The charges of corruption are part of an ideological discussion. There is no corruption, there is the perception of corruption. Haiti has no way of being corrupt because the state has no resources. What can be questioned is how the resources that the NGOs collect, without accounting for them to anyone, are being administered. That is indeed the big question. I make an exception of the work that was done in the emergency, but there cannot be a permanent policy of substituting the NGOs for the state. Haiti is Haiti, it is not Haiti-NGO. No country would accept what the Haitians are forced to accept.” These candid comments were made to the BBC in Brazil; shortly after the interview was printed Seitenfus was dismissed from his position.

When looking at Haiti it is important not to break time periods into historical blocs such as before the earthquake and after. The historical events that preceded the earthquake played a direct role in magnifying the devastation which occurred on January 12, 2010. Even before the earthquake, 80 percent of Haiti’s basic services were provided by the more than 10,000 NGOs. This was due directly to the actions of organizations like CIDA and USAID undermining the Haitian state in order to benefit Canadian and American interests.

By all accounts NGOs are less transparent and accountable than the Haitian state – the only difference is that the money flows back to the donor countries. While there are exceptions in the case of Partners in Health and the few organizations which work in partnership with the Haitian government – by and large the Haitian government is regarded and portrayed as an insatiable parasite which cannot be trusted. However there is evidence to suggest that the same can be said about NGOS. In 2010, the Disaster Accountability Projectwas formed, and they found that of the 197 largest NGOs in Haiti, only 6 provided regular, factual situation reports on their websites. Out of the 197, only 21 offered to even take part in the survey.

The only way to ensure progress going forward is that those involved in Haiti work with the government as an equal partner and support the democratic process which would allow the Haitian state to rebuild itself. It is important that this is not a hollow democracy as defined by the United States, Canada, France or the United Nations – but one which is defined by the choice of the Haitian people without outside interference (something that did not occur with the election of President Michel Martelly). Hopefully the three year anniversary of the earthquake will be a turning point and bring about a shift in the conversation to focus not on a failed reconstruction in Haiti, but who has failed Haiti and why.

Thursday, January 10, 2013

2013: A Brighter Year Ahead for the Caribbean?

January 10, 2013

In 2012, the Caribbean was the site of many positive developments—but overall the region as a whole is desperately trying to keep its head above water. An example of this could be seen in both Jamaica and Trinidad’s 50th anniversary of political independence. While last year marked half a century since the end of formal British colonialism, it also highlighted that new and perhaps more powerful structures of control have arisen in the region such as the International Monetary Fund, the World Trade Organization and the international drug trade. The continued advance of all three of these influences has been relatively unimpeded in the politically fractured Caribbean of today. What one can only hope is that from the lack of progress following prescriptions handed down from Washington, Geneva and Brussels, will lead to a reorientation towards discussing new alternatives for the region. The ugly reality of austerity has rolled back much of the region’s social progress in healthcare and education—and we are witnessing an unparalleled spike of inequality, poverty, and crime. The majority of the spending for such services now is predominately debt driven and as such are unsustainable.

Jamaica has come to symbolize how problematic a relationship with the IMF can become. Since the late 1970’s Jamaica has been stuck on a treadmill of debt, running at full speed, engaging in continuous borrowing, and repaying with massive amounts of interest while never getting ahead. In the 35 years the IMF has been in Jamaica, the country has devalued its currency numerous times, liberalized its tariffs, lowered taxes for corporations, created export-processing zones, slashed social spending, and privatized state enterprises. This has all resulted in higher levels of debt, less social services, little to no economic growth, and the collapse of Jamaica’s productive economy.

While this may not be news to many in the region, an article in the Chicago Tribune recently stated that Jamaica’s ongoing debt crisis is in fact worse than that of Greece—and also that Jamaica has more debt in relation to the size of its economy than any other country. Jamaica is currently in the midst of deciding whether or not to negotiate a further round of payment restructuring. Instead of flying advisors from Washington to Kingston to provide advice on how to handle the crisis, perhaps the PNP government should be looking south towards Buenos Aries for ideas on how to deal with such unsustainable levels of debt.

The Westminster institutions of government inherited from colonialism have also showed that it is due for an upgrade. The two party system of much of the English speaking Caribbean has left a legacy of partisan infighting, and in most cases the population has the choice between two flavors of neoliberal policy orientation. Lloyd Best rightly challenged the wholesale acceptance of British cultural and political institutions in a region so diverse and different in regards to size, population, resources, history, and power relations. There is no real third option to challenge the ineffectiveness of the traditional parties and break beyond the isolationist politics of underdeveloped micro-states and think in terms of a regional political alternative. While this will not happen overnight, there is a serious need for democratic renewal in the region. As Tennyson Joseph of the University of the West Indies has written, there is a serious need for a second independence revolution to take place if the region is to develop meaningful solutions to its unique problems.

The year 2012 also saw the publication of the first Human Development Report focused specifically on the Caribbean.  The report was heavily focused on how crime has impacted human development in the region. Lead writer Helen Clark argued along the lines of what has more or less become common sense stating that “This report stresses the need to rethink our approaches to tackling crime and violence and providing security on the ground. We need to follow approaches that are centered on citizen security and address the causes of this recent increase in violent crime, including social, economic, and political exclusion.”

The problem is, given the situation whereby most governments are limited economically—how can such resources materialize? Additionally, the problem of crime in the Caribbean cannot be solved simply by throwing more money towards security forces and the police—this is simply a way to try to contain it. The sharp increase of crime across the Caribbean has coincided with the implementation of trade liberalization and an erosion of basic social welfare programs. In a society where opportunity is a scarce commodity, the lure of quick cash in the drug trade is not a question of morality—it is a matter of survival for most. According to many domestic police reports, this can be seen by the increase of marijuana plantations by former banana farmers in their late 50s and early 60s in both St. Lucia and St. Vincent, where they have gone so far as establishing a marijuana growers association in the latter.

The orientation of the region has led to a fracturing of both the domestic and regional economies. What is proposed is not an easy task, and it will take a collective effort. What Caribbean leaders need to do is establish a series of plans to tackle to most serious problems facing the region. In regards to food security, the Caribbean is one of the most fertile regions on the planet but is vastly underutilized when it comes to the production of locally consumed food. While CARICOM countries enjoy duty free access to each other’s markets, we have only begun to see the implementation of a partnership which will see Trinidad fund a food security initiative which will hopefully turn Guyana into the breadbasket of the region. It should not stop there however, as Belize, Haiti, Suriname and Jamaica all have the potential to significantly boost the production of local agricultural production. Such initiatives will not only reduce the skyrocketing food import bills, it will also act as a sponge for the large number of unemployed and underemployed in the region.

While tourism is now the largest contributor of income in the Caribbean, an effort must be made to make the industry more sustainable in addition to mandating that it form much needed links to other industries such as agriculture. A 2011 World Bank report on Jamaica revealed that as much as 80% of tourism earnings do not stay in the Caribbean region, one of the highest "leakage" rates in the world. According to Victor Bulmer-Thomas of London University, "In all-inclusive Caribbean hotels it is common for only 20% of revenue to be returned to the local economy. In the case of cruise ships it will be much less, probably no more than 5%." In addition, the majority of the food which is served in the hotels comes straight out of the container port from Miami. It is not unusual to see bowls of apples and grapes sit in Caribbean hotel restaurants while fruit vendors selling local fruit like mangoes or papayas struggle to get by. As a result, the income derived from these food imports are also exported outside the region.

While the region is in no way fighting from a position of strength, the weakness of the United States should be taken as an opportunity to reorient the Caribbean towards meeting domestic, rather than international needs. While the population of the region certainly knows that change must occur—and soon—how much further does the region need to fall for politicians to change their course of action? Hopefully 2013 will be an unlucky year for those who benefit from and are determined to keep the Caribbean locked into outdated and inappropriate policies which do nothing to improve the condition of the majority of the people.