In the 19th century, Haiti embarked on a debt journey that casts a long shadow over its economic development today.
Initially saddled with a massive indemnity to France for its independence, the debt’s repercussions are still felt.
Haiti shares traits with neighbors, such as reliance on cheap labor and past U.S. interventions and support for dictatorial regimes.
However, Haiti’s past includes a unique burden. In 1825, France demanded 150 million francs as compensation for lost land and slaves, a sum that dwarfed the young nation’s budget.
This debt, facilitated through loans from French banks, eventually became part of the portfolio of National City Bank, now Citibank.
Unlike debts that fund infrastructure, Haiti’s repayments were essentially for its right to exist as a nation.
By 2022, The New York Times estimated the reparations due to Haiti could range from 21 billion to 115 billion current dollars.
MIT historian Malick Ghachem highlighted another legacy of this debt: the dominance of the U.S. dollar in Haiti’s economy, undermining the local currency, the gourde.
Despite remittances being exchanged into gourdes, the dollar remains the currency of the elite, contributing to cycles of devaluation and inflation that harm the economy.
Navigating Haiti’s Challenges
Ghachem suggests that international support, including currency stabilization efforts from the Eurozone and the U.S., could help strengthen the gourde.
Yet, the complexity of Haiti‘s situation, compounded by political chaos and the lack of state services, poses significant challenges.
Up to 80% of public services are provided by foreign NGOs, increasing since the devastating 2010 earthquake.
This reliance on external aid has stifled local institutions and perpetuated dependency.
Corruption further complicates efforts to rebuild. International aid directed towards foreign NGOs and the concealment of wealth by Haiti’s elite hinder progress.
Import dependence has also weakened local agriculture, suggesting a need for tariff adjustments to protect domestic industries.
Addressing these issues requires a multifaceted approach that includes supporting local institutions, promoting transparency, and re-evaluating aid practices.
As Haiti continues to navigate its complex history and current challenges, the international community’s role in offering effective support remains crucial.