Haiti fuel price jump was ‘guaranteed to lead to backlash,’ U.N. poverty expert says

Miami Herald, by Jacqueline Charles, July 16, 2018

The United Nations’ top expert on poverty criticized the International Monetary Fund’s continued push to force Haiti to remove fuel subsidies on Monday, and said donors such as the World Bank and Inter-American Development Bank should help poor Haitians cushion the blow of the extra cost by increasing assistance to the country.

“The fund has consistently underestimated the importance of calibrating their recommendations to the specific political context, not taking into account the extent to which recommendations are politically viable and socially sustainable,” said Philip Alston, the U.N. special rapporteur on extreme poverty and human rights.

He said the dramatic increase in fuel prices a week ago that led to burning barricades on the street and the resignation of the prime minister on Saturday was “guaranteed to lead to a backlash and bizarrely, undermine the very programs the fund is trying to implement.”

In an interview with the Miami Herald, Alston said IMF leaders should have known that a 38 percent increase on gasoline, 47 percent on diesel and 51 percent on kerosene, would be “highly problematic.”

The increases were almost immediately temporarily suspended 14 hours after they went into effect. But the IMF’s continued insistence on the hikes, even after the deadly protests, the cancellation of U.S. flights and the resignation of Prime Minister Jack Guy Lafontant and his cabinet, ignores Haiti’s political and social fragility, said Alston, who has offered his independent expertise to Haitian President Jovenel Moïse to investigate human rights issues affecting the poor.

“Instead of saying, ’We blew it and we will try to work on something which is more manageable,’ it takes a hard line,” he said of the IMF, which last week said it was anxiously awaiting a revised agreement with the Haitian government that included gradual increases on the price of fuel accompanied by social programs like transportation vouchers to ease the impact on the poor.

Haiti entered the original agreement with the monetary fund because it would give the poor country access to an initial $96 million in grants and loans. And successfully implementing the agreement with the IMF sends a signal to other potential donors who could help Haiti by providing more aid.

“It’s a very bad dynamic and politically highly problematic,” Alston said of the IMF’s continued pressure on the government.

Alston’s criticism came as Moïse began a search for a prime minister to head a new government. In a three-minute address to the nation late Saturday, Moïse said he understood “the situation of a lot of compatriots that unemployment, hunger and misery are killing them,” and plans to appoint a new prime minister as soon as possible to “form an inclusive government whose mission will be to alleviate the misery of the Haitian people.”

That new government will inherit a country with a crushing deficit and debt that has gone from less than $200 million after the devastating January 2010 earthquake to about $2 billion — most of it owed to Venezuela.

“The IMF has been obsessive about removing fuel subsidies for a very long time in countries around the world, because it says the subsidies benefit the middle and upper classes more than the poor,” Alston said. “But you’ve got to work gradually… it has to be a longer-term exercise. The social and economic and political consequences of cuts of that size are very large. “

The next head of Haiti’s government, he said, “will have to persuade the IMF that the package to be discussed needs to be palatable, needs to be sellable…”

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Categories Haiti News | Tags: | Posted on July 17, 2018

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