Why is Haiti poor?
Theories abound—what can we learn from them?February 5th, 2010 | by Chris Hufstader
The earth was still shaking in Haiti when the questions started. Among the toughest and most important: Just why is Haiti the poorest country in the western hemisphere?
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.”
Environmental degradation in Haiti is also fueling poverty. Most poor people in the country burn charcoal for fuel, and the result is that Haiti is now 98 percent deforested. This has increased the island’s vulnerability to flooding in tropical storms, has hastened the erosion of good soil, which in turn means that the land is not as good for farming. It’s a lose, lose, lose situation.
Many of us are now thinking about the reconstruction and long-term development of Haiti. We’re all looking for the right answers about how to do this, so Haiti can break itself out of some of these poverty traps that have caused so much suffering. We need a clear-eyed analysis of what has failed in the past if we are to help Haiti get it right this time. So, what are we overlooking here, and what else should we be reading? Let’s hear your suggestions.