Abstract
Of all the countries in the
world that could not withstand the negative impact of an economic embargo Haiti
was probably the most vulnerable. The
purpose of political and economic sanctions is to persuade a government to
change its behavior in order to create an opportunity for improvements. During the Embargo of Haiti of 1991-1994
thousands were massacred by the brutal military rulers and economic conditions
became worse than ever for the Haitian people.
It ended only as US troops were headed to Haiti to implement an invasion
and occupation. The Haitian Embargo
highlights the differences in interests among governments, businesses, and the
people of the affected country. Perhaps
solutions lie in finding the point at which divergent interests converge. After the 2010 earthquake one company
(Thread, LLC) has provided bold leadership in reconciling the competing
interests of governments, businesses and the people.
An analysis of the impact of political sanctions on business
operations is incomplete if it is done in a vacuum or from the perspective of
only one political or business standpoint.
Thus, in this short paper an attempt is made to provide a brief, but
meaningful, overview of the political and business issues related to the embargo
of Haiti that occurred from 1991 to 1994.
The story of the embargo is
analyzed from two very distinct perspectives: the perspective of an American textile
manufacturer (fictitious) and the perspective of Haitian textile workers. In order to set the stage, a brief history of
Haiti is given, highlighting some key facts related to its development (or lack
thereof). The brief history is followed
by a description of the contemporary business climate, economic realities for
the people of Haiti, and the political intentions and behavior of the American
government in relation to Haiti.
Finally, in the wake of the 2010 earthquake and its devastating impact
on an already fragile economy, the issue of Corporate Social Responsibility
(CRS) is discussed as a necessary element for any American corporation
operating in or doing business with Haiti.
Brief History
The establishment of Haitian independence is historically very
unique. In 1804 Haiti was the first
Latin American colony to achieve independence from its European colonizer and
only the second colony to become independent in the western hemisphere (Skidmore,
Smith & Green, 2010). The United
States of America was, of course, the first to achieve independence. Haiti was the first republic in the new world
that was ruled by persons of African descent and it represented the first time
in history that a new country was established after a slave revolt (Werleigh, 1993). Perhaps precisely because of these facts, it
was not well received by the international community. At the time of its independence, all of
Europe, the US, and the Vatican refused to recognize Haiti’s status as a
republic. In 1824, France claimed that
the government of Haiti owed it 150 million French francs for loss of
property. France’s claim was supported
by the US and others in the international community with an economic embargo and
in 1825 Haiti began making payments (Farmer, Fawzi & Nevil, 2003). Loans were made from French banks and
payments continued until 1947. The total
paid (with interest) in today’s US dollars is $21 billion. Essentially, former
slaves were forced by the international community to pay restitution to their
former slave owners.
Poverty, political instability and
interference by the US in its internal affairs persisted throughout Haiti’s
history. From 1900 – 1915 the US
practiced what became known as “gunboat diplomacy” and engaged in military
invasions of Haiti’s shores dozens of times (Farmer et al., 2003). In 1915, the US engaged in a full blown
invasion and militarily occupied Haiti until 1935. In spite of claims by the US that it wanted
Haiti to become a functional democracy it was a main source of foreign aid
during the reign of Haiti’s most brutal dictators (e.g. Francois “Papa Doc”
Duvalier, 1957-1971).
Socially and economically Haiti became
extremely stratified with a small wealthy elite class (mostly mulatto) and
large underclass existing in extreme poverty.
In 1990, it appeared that things would begin to change. Under the leadership of a priest
(Jean-Bertrand Aristide) from a parish in the poorest area of Port-au-Prince, a
political party was formed with the idea of bringing true democracy to Haiti
and making changes that would reduce poverty and improve the health and
education systems (Sprague, 2008). Jean-Bertrand Aristide is described as the
first democratically elected president in Haiti’s history (Farmer et al.,
2003). Unfortunately, within seven
months, he was removed from office by a military coup that was supported by the
elite class of Haiti. They feared Aristide would bring socialism to Haiti and
threaten their status and wealth (Werleigh, 1993).
The 1991 Embargo
The Economic Embargo of Haiti was triggered by a military that
occurred within seven months of the election of Jean-Bertrand Aristide as
President of Haiti. Many in the
international community expressed outrage that a democratically elected leader
who had received 67% of the vote with a 90% turnout was ousted by military
leaders who had previously left the country (Werleigh, 1993). The US along with the Organization of
American States (OAS) immediately proposed sanctions against the military
government. Unfortunately, the threat
and implementation of economic sanctions did not prevent the military
government from searching out and killing thousands of Haitian civilians
identified as Aristide supporters (Farmer et al., 2003). The Embargo has been criticized and most
severely impacting those who it was intended to help while allowing exceptions
that benefited American businesses and the Haitian elite (Werleigh,
1993). The end of the embargo came in
1994 as a large contingent of American troops was on their way to once again
invade the shores of Haiti. The military
leaders made a quick exit and Aristide was reinstated as President.
Government versus Business versus Popular Interest
As in any situation involving international relations, economics,
politics and business, things can get very complicated. The choices that are made in the process of
any crisis depend on who is making the choice and from what perspective. Regardless of how benevolent a foreign
interest might sound the reality is that each government must make choices that
are in its own interest. However, when a
government has been dismantled a vacuum is created that allows foreign interest
to make choices that may or may not be in the actual interest of the dismantled
government.
Similarly, businesses operating or attempting to operate in a
country that is experiencing a crisis, such as the economic embargo of Haiti, will
make decisions that are in its best interests as defined by its own
perspective. Additionally, a foreign
business in Haiti would have to decide what, if any, responsibility it has
related to the wellbeing of its Haitian employees. If an American textile manufacturer with a
plant in Haiti has been successful, it would be motivated to develop a plan to
return upon the resolution of the crisis and even lobby for exclusions. That is exactly what happened during the
economic embargo of Haiti. Many American
businesses found ways to gain exemptions and continue their operations at least
at a level sufficient to maintain a presence in Haiti (Werleigh, 1993; Todd, 1994).
Finally, the interest of the typical Haitian
civilian must also be considered.
President Aristide made the interest of the people his number one
priority and it put him at odds with the Haitian elite, American business and
eventually the American government. The
people of Haiti desire what people everywhere desire; an opportunity for a
decent and comfortable life. Unfortunately,
what is offered to an overwhelming majority of Haitians is extremely low wages
under inhumane working conditions. Under
Aristide the minimum wage was raised to $2.40 per day. However, as a result of the embargo the cost
of living in Haiti soared to levels comparable to or far exceeding prices in
the US (Gibbons & Garfield, 1999).
For example, a gallon of gas rose to as high as $10 per gallon while in
the US it remained below $1.50 per gallon.
The disparity between wages and prices has not been reconciled. It is one of the conflicts in interests
between American and Haitian textile manufacturers and textile workers. It is in the interest of the textile
manufacturers to maintain low labor costs.
The textile workers, on the other hand, consistently demand a livable
wage and better working conditions.
Corporate Social
Responsibility (CSR) in an Economically Ravaged Region
Is there the possibility of a light at the end of the tunnel? Can the conflict between the interests of
governments, businesses, and the people be reconciled? CSR has become a part of the vernacular among
global corporations. Most global
corporations entered the new millennium with a new sense of social
responsibility in relation to the environment and the conditions of people in
the countries where they operate.
Sometimes CSR means providing support to local NGO’s or building new
schools. In Haiti one American company
has taken CSR a step further.
Thread, LLC was established after the 2012 Haitian earthquake it
is a Pittsburgh based company involved in recycling plastics. While volunteering in Haiti it owner and
founder, Ian
Rosenberger, observed the massive
amounts of plastic bottles that seem to be everywhere. He believed that it
would be possible to turn the massive amounts of plastic trash into something
useful and employ Haitians in the process.
He established partnerships with local recycling companies and built a
processing plant in Haiti that shreds the throwaway plastic and prepares it for
shipment to the US. In the US, Thread,
LLC partners with others to turn the plastic into fabric and other usable materials. The result is supplemental and fulltime
income for over 2,000 Haitians. As new
partnerships and products are made from the shredded plastic, the profits for
Thread and jobs for Haitians increases (Thread, LLC, 2013). Thread offers a model of CSR that directly
addresses the interest of both the business and the people it employs.
A Final
Word
The
issues of political stability, economic development, promotion of business
interest, and social responsibility are certainly highly complex. There are no simple solutions. However, with bold leadership and a sense of
social responsibility the points at which the interests of very divergent
groups converge can be discovered.
References
Farmer, P., Fawzi, M.C., & Nevil, P. (2003).
Unjust embargo of aid for Haiti. The Lancet, 361(9355), 420-3.
Gibbons, E., & Garfield, R. (1999). The
impact of economic sanctions on health and human rights in Haiti, 1991-1994.
American Journal of Public Health, 89(10), 1499-504.
Skidmore, T.E., Smith, P.H. & Green, J. N. (2010). Modern
Latin America (7th ed.). New York, New York. Oxford University Press.
Thread, LLC (2013). Thread impact report 2013. Retrieved from
http://www.threadinternational.com/about-us/2013-impact-report/
Todd, D. (1994). Haitian companies' exports
to U.S. soar by 50 per cent despite embargo. The Ottawa Citizen.
Werleigh, C. A. (1993). Sanctions: Haiti and
the halfhearted. Bulletin of the Atomic Scientists, 49(9), 20.
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