A new facebook group has been set up to stock The Shock Doctrine in Haiti. But the IMF have only agreed an emergency £100m loan with conditions attached.
News stories about Haiti are full of tales of looters. There’s less talk of a bigger scale plunder to come. In Naomi Klein’s ‘The Shock Doctrine‘ she maps the rise of “disaster capitalism”. She describes how, over 40 years, The International Monetary Fund (IMF), Pentagon, and various mega-corporations have increasingly used (or created) disasters as an excuse to push through unpopular right wing economic policies, and asset strip vulnerable economies.
I was just finishing this book on Thursday as the scale of Haiti’s earthquake was becoming clear. My immediate fear was an obvious one. So I did what all young lefties do in a time of crisis. I set up a Facebook group: “No Shock Doctrine for Haiti”.
It turns out the vultures were already circling. Almost immediately, a friend joined the group and posted a link to The Heritage Foundation – a highly influential conservative American think-tank. They argued (in a paper which has since been removed) for the approach described in Klein’s book. See a description of it here.
Worse still, if this article in The Nation is to be believed, the IMF were way ahead of us. As I was setting up the group, they were haggling with Haiti. They agreed to an emergency loan of $100 million. But, allegedly, they forced the Haitian government to agree to freeze public sector pay, and raise fuel costs in exchange.
This is standard fair for the IMF. I won’t detail them here, but Klein gives examples in her book of how disasters or major shocks have been used by the Fund and others as a chance to force through unpopular, radically pro-corporate policies, which have led ultimately to massive inequality. These case studies range from Russia to Chile, and South Africa to Poland.
Debt is also familiar to Haiti. Jubilee USA provide a useful briefing in which they explain how France’s demands for reparations for the lost labour from Haiti’s freed slaves forced the country into massive debts from which it never recovered.
Despite allowing corrupt dictators to remain in power for decades, when the people of Haiti elected a leader promising to do something about poverty, we either backed, or allowed, two coups against him.
The US has also pushed privatisation – of more benefit to their companies than the poor of Haiti. According to Haiti Progrès, for example, in 1996, the United States Agency for International Development (the government’s aid wing) signed an $800,000 contract with a Canadian Public relations firm to hype privatisation in Haiti.
The economic guru of the radical right, Milton Friedman, explained to his students how their neo-liberal ideas would take over the world:
“Only a crisis—actual or perceived—produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.”
The poverty which made this earthquake so devastating is no accident. It is the result of two centuries of oppression of the world’s first black republic. It is the result of enforced neo-liberal policies that have prevented Haiti developing the only way any country has – through investing in infrastructure and people. Friedman’s ideas are so popular with the mega-rich because they have only ever succeeded in doing one thing – making them richer.
If you want to do something, you can donate to ActionAid or one of these charities. The Shock Doctrine works by pushing policies through while people are distracted and grieving. So we must also be their eyes and ears, and keep the vultures at bay until they can come together to decide how they want their country to be re-built. As I write, more than 4,000 people have joined the Facebook group, and are helping act as those eyes and ears.
Our guest writer is Adam Ramsay who will jointly launch a new blog brightgreenscotland.org on Wednesday.
41 Responses to “No Shock Doctrine for Haiti”
Mark
It’s easy to demonise the IMF but they are not set up to be sinister. Instead they bring in outside help and resources, something that Haiti lacked for so long. After all, debt is next to irrelevant given the crushing poverty and the kleptocratic governments this country has seen. A dose of IMF rigour isn’t exactly going to “shock” this disastrous nation, it’s probably the least of their worries. Sadly it takes a tragedy on this scale for the US and Europe to wake up: we’ll invade Iraq for the oil but the US didn’t care for this near-neighbour.
Lee Vanderheiden
Charles,
The tone in your letter is soothing however your assertions are unsupported. “…the reasons those decisions were made were on the basis of sound economics”. Untrue. Economics is not a science, it is based on theory only, and supply and demand, laissez-faire economic theory has not proven itself to be sound at all. It is the reason the for the past twenty-five years all over the world where nations have instituted neo-liberal/neo-conservative Chicago school, Milton Friedman economic ideas have redistributed their common wealth into just two camps: the majority poor and the very rich elite, with overwhelming political power favouring the rich. Sound economics for whom?
Furthermore, at a time of great upheaval and tragedy is NOT the time to offer a loan with long standing and long-suffering strings attached. How cruel! It is a time for compassion and aid. Yes, without any strings! No one with a heart would seek to profit from such a catastrophe as this!
Haiti’s corrupt government? Who in much of Haiti’s history has been responsible for this? The USA has consistently interfered with Haiti’s democratic electoral process. Should the people be blamed for this? Blaming the victim, another cruel response to tragedy.
Please support your assertions with facts. Where on earth has privatization been shown to be the best way forward? In Canada? The USA? Russia? Iraq? Where??? Where there has, there has been corruption of the worst kind. Please visit the Canadian Center for Policy Alternatives website for a review of this, for a quick example: “Flawed analysis props up BC public private partnerships” ( http://www.policyalternatives.ca/publications/commentary/flawed-analysis-props-bc-public-private-partnerships ) COMER (The Committee on Monetary Economic Reform : http://www.comer.org/ is another website with more in depth information regarding the downside of monetarism.
Your own soundbite: “There’s a lot of tragedy and a lot of opportunity to …” is classic Milton Friedman “shock therapy”. The phrase “shock therapy” is not Naomi Klein’s words but Milton’s own. Read his works!
Any why wouldn’t Obama let it become a “corporate oligopoly playground”? His multi-billion dollar bailouts to the banks and his current foreign policy of more aggression into Afghanistan and possibly Yemen (following in Bush’s footsteps) is doing just that. Not only to his own country but to these others too, where he has no right to be in! The War on Terror is creating corporate oligopolies and, unfortunately, more terrorists (displaced, traumatized, desperate, angry young men and women).
Naomi Klein’s book, “Disaster Capitalism” and the ideas contained within are refreshingly new and most controversial, given the predominate economic zeitgeist. As far, far away from “sensationalist stereotype” as you can get. Nothing stereotypical about it at all. Except the rich and powerful plundering the poor and weak.
Oxford Kevin
Adam, I can see now why I couldn’t get you to stand in a ward in Oxford. But WDM http://www.wdm.org.uk has lots of information on the problems with the World Bank, the IMF and the WTO. Specifically the demands to apply conditionality to loans has nothing to do with rooting out corruption and everything to do with forcing markets to open up, which has proved again and again that the IMF/World Bank/WTO model is a complete failure. There have been horrendous examples of exacerbating corruption when the privatization of state assets has occurred, not just in Africa like the failed sell off Tanzania’s water supply but also in Russia after the collapse of the Soviet Union.
The World Development Movement has a number of recent reports on the failure of these unnaccountable organizations.
http://www.wdm.org.uk/out-time-case-replacing-world-bank-and-imf
http://www.wdm.org.uk/denying-democracy-how-imf-and-world-bank-take-power-people
http://www.wdm.org.uk/zambia-condemned-debt-how-imf-and-world-bank-have-undermined-development
http://www.wdm.org.uk/treacherous-conditions-how-imf-and-world-bank-policies-tied-debt-relief-are-undermining-development
http://www.wdm.org.uk/debt-and-destruction-senegal-study-twenty-years-imf-and-world-bank-policies
Adam Ramsay
Hello,
thanks for the comments on this.
Charles, I was going to respond to your well made points, but Lee, above, has already made most of my points. I am somewhat surprised by the idea that privatisation has been show to be the best way forwards though. Looking around Europe at the moment, I think it’s fair to say the opposite is true with many types of resource.
Mark, you’re right. The IMF was set up as a result of the Bretton Woods conference in order to bring stability to the global economy. However as, among many others, Joseph Stiglitz found when he was chief economist at the World Bank, they has consistently failed to do this. I’d argue this is largely because they are controlled by rich countries who, understandably, push their own interests.
I find it difficult to accept the idea that debt is irrelevant. The country was bankrupted on it’s independence and has never recovered. It is a disaster because we have constantly intervened in their affairs and done them harm. IMF rigor isn’t what they need – their structural adjustment programs are a joke. The reason developing countries were so loath to accept any role for the World Bank/IMF in climate finance at Copenhagen, for example, is that no developing countries trust them any more because of the mess they’ve made.
Tom Usher
RT @nohaitishock: Read Adam Ramsay's article on #Haiti on Left Foot Forward: http://bit.ly/8zGtc3