An Anatomy of Corruption: Haiti

By Georges A. Fauriol

The past decade has convincingly brought to a close a period of global democratic growth and consolidation underway since the late 1970s – Samuel Huntington’s “third wave.”  We have instead now witnessed twelve years of democratic decline. This is fueled by the resurgence of expansionist authoritarianism armed with a vision strategically eager to compete with the norms and institutions of democracy; worse, there is also a measurable decline by established democracies in their commitment to democratic governing principles – in the aggregate, this is Larry Diamond’s “democratic recession.”

One alarmingly systemic feature has emerged across all regions of the world: the inability of governments to deal with the hopes, let alone the fears of its citizens. Much of this can be associated with poor governance, which has in turn energized a revolt against real and perceived injustice and inequality. This corrosion of democratic values has translated into frustrations at both the political and policy levels. Many feel that they have no voice and see elites at a loss to connect satisfactorily with an electorate, or in a perverse way, fantasize that populist and authoritarian leadership is genuinely interested in giving them a voice.

Democracy is in trouble – yet, democratic governance has achieved important gains over the past year – see the recent elections in the Maldives, where a united opposition was able to oust a president condemned internationally for serious human rights violations; in Armenia earlier this year, weeks of mass demonstrations and civil disobedience against the entrenched regime led the opposition leader to be elected as prime minister by parliament; and in Zimbabwe, elections in late July provided another signal event in a post Mugabe regeneration of freer politics. Objectively, these transitions each face uncertain odds, but they suggest the inherent risk that all undemocratic and corrupting regimes face: popular will, freely expressed.

Admittedly, in many other cases, the emergence of a democratic political process remains arduous, even with considerable international engagement. Nonetheless, encouraging if halting developments can emerge, underscoring the political energy of organized mass movements motivated by a shared vision to overcome injustice, instill greater transparency, and strengthen democratic governance. Exhibit A: Haiti, whose government was recently forced to come to grips with a deep and expanding scope of governmental corruption.

The latter is highlighted by the misuse of at least $3 billion in funds over the past decade sourced through Venezuela’s PetroCaribe discounted oil initiative. The government’s changing attitude emerged in the wake of national demonstrations on October 17, and a more violent explosion on November 18. This political dynamic was itself preceded by an even more violent explosion that engulfed Haiti’s capital, Port-au-Prince, in early July. The trigger was an ill-advised and mishandled change in public subsidies for the price of fuel –in effect, an increase at the fuel pump. But most observers, and notably Haiti’s political community, attributed the violence more as a reflection of the dysfunctional state of Haitian governance.

A network of corruption permeates all sectors of public governance, the magnitude of which is confirmed by Transparency International’s 2018 Index ranking Haiti as the second most corrupt country in the hemisphere after Venezuela. This impacts all sectors of political and economic activity, such that the 2018 Global Competitiveness Report Index, measuring the quality of institutions and the ensuing human capital and economic ecosystem, ranks Haiti second from the bottom out of 140 countries. These statistics reflect a perennial challenge for succeeding governments despite a significant commitment by a wide spectrum of the international community — notably the United States – since the late 1980s. The current government of President Jovenel Moïse is no different. It started off badly with the president himself being accused of money laundering even before his inauguration in February 2017, and then muddied the waters further by subsequently firing the head of the government unit investigating the allegation.

The sheer scale of the PetroCaribe scandal was ultimately difficult to hide and provides an illustration of the role that civil society can play in pushing political leadership toward corrective action. In the past two decades, Haitian civil society has been robust yet also divided and often no match for the outsize chicanery of successive governments and its allies. Nonetheless, with a focus on transparency and credibility in governance, an anti-corruption movement has emerged pursuing both a quasi-legal strategy through Haiti’s overburdened and somewhat opaque administrative court process (an approximation of the GAO in the United States, and more), while simultaneously dovetailing with a parliamentary effort to investigate the allegations of mismanagement of PetroCaribe funds and outright corruption. Although considerable partisanship was thrown in for good measure, this resulted in a 686-page parliamentary report issued in 2017, which targets Moïse’s predecessor (Michel Martelly) generally, and specifically, individuals in his government, as well as several of them who transitioned to the current government.

The succession of three major public protests (July, October, November) have significantly altered the political equation for Moïse: it first forced the ouster of his ineffective prime minister (Jack Guy Lafontant); then, in the wake of the October protests, his successor, Jean-Henry Céant, announced plans to establish an independent commission to pursue the findings of the parliamentary PetroCaribe report. Several top advisers to the president, targeted in the parliamentary report as well as by public opinion, were also dismissed from the government. The November protests place even greater pressure on the government. Where this all leads is uncertain.

These developments highlight civil society’s demands for better governance from its national leaders – it sheds light on the interaction between democracyand marketsand the practical implications this has on national development. In the Haitian context, this draws attention to the varying roles played by the private sector, often maligned by critics domestically and abroad. This sector of civil society represents wildly differing levels of economic activity – from the street market vendor, to the small-scale business, to the larger, international market-driven, cosmopolitan entrepreneur – as well as differing levels of social and political engagement. Nonetheless, collectively, this community faces Haiti’s culture of corruption in a direct way – it is intertwined with business activity. There is no mystery that some elements collude the system toward illicit profitable arrangements, in tandem with allies in the government bureaucracy. But this lack of transparency in markets and governance ultimately affects all Haitians.

If the PetroCaribe scandal is notable for its sheer scale, then the illicit commercial trafficking that characterizes the Haiti-Dominican Republic border provides a strikingly more granular window on the challenges facing the business community – and the lawlessness that permeates layers of Haiti’s administrative machinery. To put it in visual terms, a fleet of trucks and cars crisscross the Haiti-DR border daily representing a significant volume of transactions, portions of which remain unrecorded – mostly to Haiti’s detriment.

The absence of effective cross-border trade controls at all of the official land border crossings has become institutionalized by entrenched interests on both sides of the border. So, this is not Haiti’s problem alone but the collusion affects it more dramatically — it undermines industries and production in Haiti, distorts market prices and depreciates the national currency, and limits the potential for foreign investment. The loss of revenue for the Haitian government alone is estimated to be as much as $400 million a year. This is not only an inexcusable loss for a government trying to deal with perennial budget deficits, but undermines its efforts to demonstrate to the donor community that the scope of progress since the 2010 earthquake is sustainable only with continued international support.

 

Fortunately, this has begun to attract attention, in part because this is an issue whose resolution is within reach as well as being necessary for Haiti’s democratic development. Constructing a cross-border trade regime to internationally accepted norms is also possible because both countries in practice already apply those norms to their trading relationships with the rest of the world.

Céant has shown concern, traveling to the border regions, which when combined with a potentially more hard-nosed political approach to the PetroCaribe scandal, are useful ingredients to address these core policy challenges. But much more is needed from Haiti’s political leadership. Anger over public corruption is high and ready-made for political mischief. Unlike the recent development in the Maldives and Armenia noted earlier, the issue here is not entrenched political leadership but protected economic interests combined with unsteady governance. In this regard, in the absence of other effective political actors, notably political parties, there is useful space for Haiti’s civil society activism – including by the private sector — to provide constructive engagement to address Haiti corruption challenges. This also points to avenues of support from the international community.

 

Georges A. Fauriol teaches in the Democracy and Governance Program at Georgetown University, and is Vice President, Program Operations and Evaluation at the National Endowment for Democracy (NED), and is also a Senior Associate at the Center for Strategic and International Studies (CSIS). The views expressed here are solely those of the author.

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