CREATING A MODERNDAY SLAVE STATE

PORT-AU-PRINCE, HAITI

I was standing open-mouthed outside the presidential palace in Port-au-Prince 18 months after the earthquake had devastated the city when a man approached selling his paintings. "What do you think of that?" he said, pointing to the collapsed palace behind us. I told him the truth: I was finding it hard to come to terms with the completeness of the destruction. The man, who later told me his name was Charles Renodin, smiled slightly. "Tell the world how we are living," he requested. "Let them know." He paused and added, "I live in the camp there," pointing across the road, where opposite the crumbling presidential palace a vast expanse of tents – emblazoned with the logos of the US, China, Bill Gates, Carlos Slim, all competing shamelessly for brand recognition – spread out as far as the eye could see. "After the earthquake I lost my mum, my dad, one daughter, so I had to move to this camp. I don't like it, it's full of corruption, it's run by gangs, and the little girls have to sell their bodies to eat," he told me. "Little girls," he added for emphasis. "Maybe eight or nine years old, getting raped every day. The police don't do anything about it, the country has no law." He told me that the Haitian people refer to the palace behind us, which should be a point of pride, as the "Devil's House". "It's full of so much corruption, they don't care about the people, they just want to make money, when the money comes they take it for themselves." He was waiting on a house now so he could leave the camp, but he didn't think it would happen any time soon: "The government has no plan." In the camps, it was particularly bad news for women: "Because there is no work, women have to sell their bodies just to eat, the only job they have is to have sex for money. Men have to steal stuff – they have no choice."

Like most in Haiti, Charles had an ambiguous feeling toward the thousands of nongovernmental organizations (NGOs) working in his country. "Some come to help, some come to make money, they like us living like this because they make more money." It is easy to dismiss such sentiments, but the global "rescue" industry really is big business. There is often a direct and positive correlation between American influence over smaller countries and the crises they experience. "After the earthquake they would give us food, water, but now everything has stopped. If you go inside this camp you don't see water, people have to walk six miles to get water. That's why crime is up." He became more agitated. "Everything is crazy right now, we're living just like animals. There is no everyday life, nobody has a job." Haiti has arguably had more US intervention in the last hundred years than any other country in the world – that it ended like this is not wholly accidental. As Doctor Maigot poignantly says to Mrs Smith, an American, in Graham Greene's The Comedians: "In the Western hemisphere, in Haiti and elsewhere, we live under the shadow of your great and prosperous country. Much patience and courage is needed to keep one's head."

The following day, I was driving down a long, dusty and typically bumpy road in the middle of Port-au-Prince when I came across some imposing metal gates. Behind them stood the E-Power electricity plant. The site was unlike the rest of the city, which lay in complete ruin, even a year and a half after the earthquake: it had burnished sheet-steel doors and perfectly tarmacked roads. I was on assignment with the Financial Times and being escorted in a 4x4 by the World Bank, which had its own particular kind of tour that seemed to ignore the massive tent cities whizzing past our windows. Here was the optimistic vision, they told me. In a capital city where electricity blackouts were a nightly occurrence, E-Power was the kind of company the international financial institutions (IFIs) running Haiti believed would lead "reform" – by taking power away from the state-run company, and running the business for profit. My World Bank guide was adamant that this was the way out of Haiti's tragic past and present. I soon found out the company was founded in 2004 by a group of Haitian venture capitalists excited by the departure of social democratic President Jean-Bertrand Aristide. The aim, they said, was to "offer a solution to power generation in Haiti". Sure enough, some years later, in 2006, the new US-backed President René Préval launched an open bid for a contract to provide electricity to Port-au-Prince. Seven companies took part. E-Power won.

For many in the Haitian business elite, such economic liberalization was to be the model for the new Haiti being built after the devastating 2010 earthquake. "The earthquake created trauma that could have been better exploited," Pierre-Marie Boisson, board director at E-Power, told me as we sat in the upmarket air-conditioned offices at the plant. "Because of the political process that took place after that, it took too much time." He added: "Earthquakes should be an opportunity because it destroyed. Where it is destroyed, we have to build. When we have to build we can create jobs, we can create a lot of changes, we can change a country."

However, Mr Boisson's cynicism about the slow rate of "exploitation" of the "opportunities" provided by the earthquake was not quite accurate. In the aftermath of the earthquake, the opportunity afforded by the destruction wreaked on Haiti was capitalized on immediately. As the dust was still settling in Port-au-Prince, the World Bank, the IMF and their regional analogues, alongside various US agencies – what became the de facto government in the absence of a Haitian alternative – carved up the society's different sectors and doled them out among themselves. The Inter-American Development Bank (IADB) got education and water, the World Bank bagged energy, while the United States Agency for International Development (USAID) – a body that will be examined later in this book – gratefully accepted the planned new industrial parks. Alexandre Abrantes, the World Bank's special envoy to Haiti, told me how it worked: "We basically have agreed that where each of us has the competitive advantage, we then divide ... the sectors among ourselves, and add in some sectors which go together."

The mass privatization of state-run assets and the turning of Haiti into a Caribbean sweatshop – via an export-led garment production and cheap labor model that the US and the IFIs had been pushing from the mid-1990s through the 2000s – were now distinct possibilities. This could be enforced with minimal push back from a decimated civil society and a denuded government. All the extra-Haitian bodies, particularly the US government, shared this vision. "There is a lot of agreement, so I would say one of the unusual and very positive aspects about this project is that it is really done in partnership," Jean-Louis Warnholz, a State Department official working on Haiti, told me when I was back in New York. (Mr Warnholz asked not to be named, but Haitians deserve to know the officials who are designing their destruction.) Haiti was to be the next Top Model on the World Bank and IMF catwalk. The "partnership" (in which the Haitian people had no part) believed that rebuilding the capabilities of the Haitian state should play no role in its reconstruction. Instead, the solution to Haiti's problems lay in the creation of a flourishing private sector. "What's really going to change Haiti and make this process different from all the previous ones is the development of the private sector, and I think there's a consensus in that," José Agustín Aguerre, the Haiti manager for the IADB, told me. The bank disbursed $177 million in grant money in 2010 – more than any other multilateral source – to push this agenda. "Private sector is the big difference, it's what will be creating wealth, creating jobs, not the public sector," he added. It seemed there was no alternative.

After the election of President Michel Martelly in May 2011, things remained easy for this private-sector-led "consensus": the IFIs and US not only had their Shock Event, but also their Shock President. Aristide, who was president in 1991, 1993–94, 1994–96 and 2001–04, continues to be the most popular politician in Haiti, but is banned from standing again for the presidency. In Martelly, the US government had found its "Chicago Boy", a more-than-willing partner for their economic program ("Chicago Boys" is a term which refers to the University of Chicago economists who helped dictators impose neoliberal capitalism in its early stages). All the major business groupings and IFIs I spoke to in Port-au-Prince were effusive in their support for the president. Carl-Auguste Boisson, general manager at E-Power, told me: "I am pleased by what I heard Martelly saying about the importance of private investment, especially when he was campaigning he was talking about things like providing private provision of public services." Kenneth Merten, the then US ambassador to Haiti, was similarly excited about the new president's privatization agenda. "A few privatizations of flourmills, but aside from that you haven't had much of anything in past decades," he told me. "That's the element that's been lacking here, you need a government that understand investment and I think Martelly and his folks do." For the US, a pliable figure like Martelly had been a long time coming. Despite many decades of effort, Haiti had not completely succumbed to the plans that its major patron had for it. And such recalcitrance had been causing increasing consternation in Washington.

HISTORY'S LONG SHADOW

In 1990, after the first democratic elections in Haiti's 200-year history, the US became hopeful of breaking up the corrupt state institutions which had been run as the personal fiefdoms of Papa and Baby Doc, the US-backed Duvalier dictators who had ruled Haiti viciously for nearly 40 years. Private capital would then be able to penetrate deeper into the country, and an economic model conducive to the interests of the rich countries could take firm root. But it wasn't going to plan. Instead of the US-orientated "reformer" many in Washington had hoped for, a huge mass movement, named Lavalas ("the flood"), propelled the social democrat priest Jean-Bertrand Aristide to a landslide victory. Over the next 20 years, the democratically elected Aristide would be ousted twice with US support, while the democratic hopes and dreams of Haiti's people would be quashed time and again. Aristide had become a nuisance in the eyes of Washington and so when he was put back in power in 2001 it was under the tacit agreement that he would allow the World Bank, the IMF and the US to institute their plan. It had been 11 years since the democratic elections, and still economic "reform" was slow. Something had to change: democracy was fine, but it had to be of use.

In this period, René Préval, a former ally of Aristide who served as president from 2006 to 2011, seemed to offer some hope for the Americans. "In the context of the developing world, we would most accurately describe him as a neo-liberal, particularly in that he has embraced free markets and foreign investment," notes one of the US embassy's diplomatic cables, released by WikiLeaks, sent from Port-au-Prince in 2007. But the leader the US was really after in that period looked more like Haitian-American businessman Dumas Siméus. A resident of Texas, he assured the US embassy, according to a diplomatic cable sent in 2005, "he would manage Haiti like a business". The same cable added: "Displaying abundant charm and energy, the 65-year-old said he had decided to run for President not only for Haiti's benefit, but also as a gesture of thanks to the United States." He was very clear about how he would do this: "The University of Chicago alum pledged to bring the 'Chicago Boys' to Haiti and establish a road map for change, promising investors would return." It was exactly what the US embassy wanted to hear; Siméus was the candidate they had been searching for. The cable concluded by noting that the millionaire Texan was a "potentially viable candidate" who could, unlike Aristide, "govern responsibly and maybe effectively" – code in this case for "in the US interest". The US deemed Martelly similarly "responsible".

But in many ways, US exasperation at the apparent reluctance of Haiti's leaders to sell off their country's assets and create an economic playground for foreign capital remains hard to understand. From the mid-1990s through the 2000s, the "Chicago Boys" had to all intents and purposes come to Haiti; the process of opening up Haiti's economy to the predations of foreign capital was well under way. The fetish of foreign investment was firmly rooted. In 1996 for example, the Haitian government had already, as one diplomatic cable published by WikiLeaks noted, "established legislation on the modernization of public enterprises, which allows foreign investors to participate in the management and/or ownership of state-owned enterprises." Moreover, a November 2002 law explicitly acknowledged the "crucial role of foreign investment in assuring economic growth and aims to facilitate, liberalize, and stimulate private investment in Haiti". The law gave foreign investors exactly the same rights and protections as Haitians. Months earlier in 2002, the Haitian parliament had voted for a new free trade zone law which provided "zones" with fiscal and customs incentives for foreign enterprises – for example, a 15-year tax exemption. In other words, post-Aristide, the government had "seen the light" and embraced the US-led vision for the post-dictatorship Haiti.

But these steps, it seems, were not enough. Only a "Chicago Boy" would do. Another WikiLeaks cable noted that in 1996 a "modernization commission" was set up to decide whether management contracts, long-term leases or capitalization was the best option for each of the companies to be privatized. The commission would also decide how much the Haitian government would retain of each asset, with a cap at 49 percent – a minority stake, stripping the Haitian people of control over their own industries.

This had an immediate effect. In 1998, two US companies, Seaboard and Continental Grain, purchased 70 percent of the state-owned flourmill. Despite this "progress", a diplomatic cable from 2005 lamented, "Some investments, however, still require government authorization," adding, "Investments in electricity, water and telecommunications require both government concession and approval. Additionally, investments in the public health sector must first receive authorization from the Ministry of Public Health and Population." It sounded like a reasonable demand from a sovereign country, but a sovereign country is exactly what the US didn't want Haiti to be. Two years after Aristide had been spirited out of the country by the Bush administration and the local oligarchs, and just before the victory of the "neoliberal" Préval in 2006, the US embassy noted witheringly: "Since the privatization of the cement factory, privatization has stalled and appears to have been put on hold." It added plaintively: "None of the major infrastructure-related enterprises (the airport, seaport, telephone company or electric company) have been privatized." The document continued: "Although these entities were supposed to have been privatized by 2002, persistent political crises, strong opposition from the former administration, and a general lack of political will have delayed the process indefinitely." The cable then noted a more plausible reason why this massive privatization program had not been enacted quite as smoothly as the US had hoped: "Some opposition to the privatization of state enterprises continues from groups such as employee's unions who have expressed opposition to workforce reductions that privatization might entail." Those pesky Haitians.

By 2008, then, the US embassy was disconsolate at the slow rate of progress and local intransigence. "Despite assurances that privatization is still a priority for the government ... we are increasingly skeptical that privatization, in whatever form, will happen," one WikiLeaks cable noted. "Time is running out." The US, however, remained steadfast. "We will continue to advocate strongly on behalf of privatization and/or private management," one cable noted. It further advocated using IFIs such as the World Bank and the IMF to bribe the democratic government of Haiti, one of the staples of the "structural adjustment programs" explored later, although it is rare to see it spelled out in such clear language. "[The US embassy] repeats its recommendation ... that privatization be a requirement under future agreements with the IFIs ... to be negotiated with the new government," the cable to Washington noted.