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The Therapy Sessions
Thursday, February 26, 2004

Haiti is travelling a well worn path

I've grown tired of dictators of all stripes. But some of them are so deluded as to be comical:

Aristide begs for international help against rebels

PORT-AU-PRINCE, Haiti - President Jean-Bertrand Aristide begged other nations yesterday to rescue Haiti from an intensifying crisis that he said raised the specter of mass deaths and could propel waves of "boat people" to U.S. shores.

Aristide was once an elected leader. When he was an alternative to the military thugs who took over Haiti in 1992, he had strong support from the US.

He squandered it in a typically African attempt to christen himself president for life. He wasted the good will of the world, and spent the aid money Haiti received on useless vanity projects.

Like so many African countries, Haiti (which is African in every sense except for its geography) suffers from big man syndrome.

I worked as Peace Corps volunteer in Sierra Leone and I have travelled in Haiti.

I believe the problem can be put bluntly: African governments are fakes. They have all the trappings of governmental authority: big buildings, presidential palaces, leaders in limos, and abundant office workers. But at the head of almost every agency is a corrupt man on the take, and the closer to the top you get, the more corruption you will see. Leaders pretend to fill a few vague criteria for donor nations, and then when the donor’s back is turned, they do pretty much as they please with the money in hand that they need to continue ruling. A typical country runs a budget that is largely financed by foreign aid, and every year these governments do precious little with it.

Aid, at least as it is currently known, does not generally solve problems in African countries. In the West, it may soothe consciences (the primary reason for it). But in Africa, aid is often part of the problem. It reinforces a toxic idea: in order to advance economically, Africans must curry favor with Western politicians. These governments do little with the aid money they are given. This being so, giving more aid to them is, truly, throwing good money after bad. You would do just as well to send it to a dictator’s Swiss bank account.

I suggest a different approach. I think that in most Sub-Saharan African countries, most aid given to the governments should be ended, and we should marshal our resources for the few countries that are willing to take the painful steps needed to solve their problems. This will concentrate our aid in countries that might just use it wisely.

The painful steps are the very "structural adjustment programs" that liberals consider harsh.

They are harsh, but they are necessary.

What are the painful steps? They are basic steps that any are the foundation of any working economy.

African nations must reduce budget deficits (which are the highest in the world). They desperately need to end price controls, particularly on food and energy. Price controls favor the rich in the cities while they impoverish farmers, encourage scarcity, and create black markets. Countries must stop recklessly printing worthless currency (which causes inflation), develop fair systems of taxation (so that citizens will develop a proprietary understanding of their governments), and clamp down on corruption (which is difficult if people do not have a proprietary understanding of their government).

It is vital for countries to open their borders to trade with (at least) other African countries. Right now, working for the customs department is the road to wealth for mid-level African bureaucrats: the bribes and tariffs are wealth creation, African style. Freeing trade will improve access to needed goods (especially food), stimulate competition and improve efficiency. Standards of living and diets will not be far behind.

State-owned enterprises, which fill the pockets of corrupt leaders, should be sold. Most of them divert government money and attention, and the collusion of business and government interests inevitably leads to corruption. Imagine if the owner of your company could have you arrested and tortured for not working hard enough. This is the case in the Congo. Cotonniere, the state-owned cotton monopoly, makes government officials rich and the police beat farmers when they fail to grow enough cotton. Business and government interests are best kept separate.

African property ownership thoroughly needs to be reformed and legitimized. Currently, Africans are allowed to work lands that have been in their families for centuries, but they do not own them and they can lose them at any time. Formal ownership of land would make households wealthier, give homeowners collateral so that they can formally borrow money, and reduce tribalism. It would also strengthen African legal systems, which in most cases are in their infancy.

What countries would practice such “radical” economic policies?

These are the very same policies practiced by the rich nations of the world, and they are the primary reason that these countries maintain their wealth. Africa has suffered for thirty years with nationalized industries, Marxist leaders preaching economic self-sufficiency and independence from the outside world. Bad economic policy is at the heart of African poverty.

What can the U.S. do? We could certainly stop dumping cheap subsidized food on them, for one. But the most important thing is simple: give African countries freedom to sell their products on the American market. West Africa would love to sell its fine cotton and cloth to Americans, not to mention its fruit, and Haiti would love to sell us sugar. If it weren’t for US law, the flood of hard currency would certainly transform these economies much more than any aid package would. The opening of the US market could be used as a reward for any country that is willing to undergo such painful structural reforms.

This is my vision, but free trade is currently a bad word. And liberals are abandoning it entirely.

This is terrible news for the US, American workers and consumers, and the world.

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