By Henri Alphonse

PORT-AU-PRINCE, Feb 14 (IPS) – President Rene Preval’s term has begun on the same discordant note on which his predecessor’s ended. Like Jean-Bertrand Aristide, the new Haitian leader’s ear is being blasted by voices telling him how to deal with an ogre with a weird acronym: SAP.

In many other parts of the developing world, SAPs – Structural Adjustment Programmes – are part of everyday life. In Africa, Latin America, elsewhere in the Caribbean, and some areas of Asia, a whole generation is growing up familar with their manifestations.

Belt-tightening and cutbacks in spending on social services – and the consequences which flow therefrom – have become pervasive. Privatisation is part of everyday debate. Other elements of the programmes imposed by multilateral lending agencies in return for balance of payments support are hauntingly famililiar to all.

Not so in Haiti. Fearing the country’s dirt-poor conditions would become even more unbearable should the doctrine of the International Monetary Fund and World Bank – merchants of SAPS – be followed to the letter, the government has balked at going beyond a feeble imitation of SAP orthodoxy.

Now it is crunch time. On Jan. 25, the Prime Minister’s office announced the resumption of negotiations with the IMF for a structural adjustment loan – and promptly revived controversy over conditionalities.

Discussions with the Fund had been interrupted in October. They centred on public finances, the development of the private sector and sectorial strategies. Terms of reference for a government action plan were sent at the end of January to representatives of the IMF, World Bank, the Inter-American Development Bank and the European Union.

With a new government in place – Preval took over from Aristide on Feb 7, as leader of the poorest country in the western hemisphere – groups opposed to SAP anticipate that some kind of adjustment programme will be implemented. They have begun preparing to mobilise members against the application of austerity measures.

Privatisation is particularly sensitive because of the fear that largescale disposal of state assets would enrich the small minority which already own a disproportionate amount of the country’s wealth.

Reports here say during the talks last year, the IMF indicated it was also concerned at the deterioriation of public finances, the spiralling inflation rate and the effect these would inevitably have on investment confidence of the private sector.

The IMF demanded the government apply measures to increase fiscal revenues, eliminate abuses in the tax exemption system and reduce government expenditures and Customs tariffs.

Executive secretary of the Haitian Appeal for an Alternative Development Party, Camille Charlmers, told IPS his group would ‘’absolutely oppose’’ any structural adjustment programme on an economy that was already in bad shape.

Some of the austerity measures contemplated would lead to ‘’social apartheid’’, he warned, and be fatal to the democratic process.

Charlmers said only two percent of the 46 million dollars worth of aid provided to Haiti since the return to constitutional order in October 1994 had been invested in agriculture. Various forms of adjustment attempted since 1983 had done little to boost farm production. Haitians were more dependent than ever on imported food.

Rice producers (output from this sector is at 100,000 metric tonnes annually) had been faced overnight with massive imports of that produce, resulting from a reduction in import duties.

Political analysts say President Preval appears to have very little room in which to manoeuvre and will find it difficult to commit the state to socially viable public investments demanded by the rank-and-file of his own political party, Lavalas.

‘’The negative effects of the conditionality of aid on the standard of living of the working classes could spark an explosion of violence,’’ says Ron Daniels.

President of ‘’Campaign for a New Tomorrow’’, an influential Afro-American organisation based in the United States and closely linked to the Black Caucus in the U.S. Congress, Daniels maintains the economic crisis has been exacerbated by the interventions of the World Bank and the IMF.

With the support of the U.S. administration, these multilateral lending agencies were imposing structural adjustment programmes and privatisations which are rejected by large sectors of the population, he said.

Daniels — who at the end of January made a tour of the country to evaluate the process of democratisation since the restoration of constitutional order in Haiti — promised to organise an international conference on the situation in Haiti.

It would include participation by those Afro-American leaders who thought the political crisis had ended with Aristide’s return to power.

A source close to the European Union’s Office in Haiti told IPS the opportunity offered the new government to mobilise financial instruments of the European Fund worth 10 million ECUs (1 ecu = 1.3 dollars) earmarked for complementary support to Haiti’s balance of payments position.

But the source warned that access to these compensation funds would only be available if the Preval administration agreed to conform to the demands of suppliers of those funds earmarked for achieving financial equilibrium and the setting up of a macro- economic framework acceptable to IMF.

Financial aid worth 17.5 million ecus has been granted over the last two years to the Haitian government by the European Union. More assistance is contingent on the IMF giving its perspective on prospects for economic growth.

First, Preval must overcome deepseated suspicion to SAP from within the ranks of his own party, and establish ‘’a climate of confidence in all sectors of Haitian society’’, as he himself characterised the task at hand. (ENDS/IPS/HA/TT/FN/96)

Origin: Amsterdam/HAITI-ECONOMY/ ----

[c] 1995, InterPress Third World News Agency (IPS) All rights reserved

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