It has been almost 5 months since Haiti was destroyed by one of the largest earthquakes on record. Haiti, already one of the poorest countries in the world, was left destitute amongst the rubble. Almost immediately foreign nations, including the United States, pledged humanitarian aid to assist the Haitians in rebuilding their country. The question is, however, will the billions of dollars pledged actually aid the Haitians at all? Will good intentions result in detrimental aftershocks?
Emily C. Schaeffer, a Research Fellow and Director of the Center on Entrepreneurial Innovation at the Independent Institute, in her recent article, “Rethinking Haiti’s Reconstruction,” examines the role the U.S. government should have in the rebuilding of Haiti.
The International Monetary Fund Managing Director, Dominique Strauss-Kahn has called for a “Marshall Plan” for Haiti. The situation in Europe during the late 1940’s after World War II when the Marshall Plan was inaugurated to aid in the European reconstruction, however, is quite different than where Haiti lies today.
“The Marshall Plan succeeded in helping to usher in the European ‘economic miracle’ of the 1950s. But it did so, according to most historians, because the bulk of the aid went to developed nations that merely needed an economic jump start.” Peter Coclanis of the Wall Street Journal in his article, “Haiti needs to be Built, not Rebuilt,”writes. “Haiti is an economically exhausted place, as it was on the eve of the Jan. 12 earthquake. Its economic problems are not akin to those facing Europe or Japan in 1948, and what is required to put Haiti on sound economic footing is much different.”
Schaeffer, an economist at San Jose State University, recalls the aftermath of Hurricane Katrina and the success of the relief efforts executed by federal agencies. “The lessons of Hurricane Katrina are important because the administration of relief and aid took place under relatively favorable conditions for government management. New Orleans is a port city accessible from land, sea, and aid, in a country with stable property rights institutions, relatively high levels of wealth, free immigration between the states, and the technological capacity to anticipate such disaster and make them public knowledge. In this context, the failures of government relief efforts suggest serious skepticism about the ability of the federal government to accomplish similar efforts in Haiti, a country with severe disadvantages due to distance, failed and corrupt political institutions prior to the quake, and with the majority of the population living in abject poverty.”
This is not the first time the United States has undertaken an invested interest in the fate of Haiti. “In terms of state-building efforts, the United States government has conducted such missions in Haiti for the past 100 years with no evidence of sustained positive results,” writes Schaeffer.
The situation in Haiti is very similar to the situation in Africa. Both suffer from abject poverty and a lack of industry within their own borders. Also, both have been beneficiaries of massive amounts of foreign aid over the years. Yet, it appears that the poverty level is the same, if not worse, than it was before monetary aid was administered. The political solution to solve the problem of the lack of growth after aid is pledged is always, more aid! Never do lawmakers step back and reevaluate their failed policies.
“The countries that have collected the most development aid are also the ones that are in the worst shape,” says James Shikwati, a Kenyan economist, reflecting on the harm foreign aid does to Africa in an interview conducted by Spiegel Online International. When he was asked what people should do who want to help fight poverty in Africa, particularly in Rwanda, Shikwati said, “If they really want to fight poverty, they should completely halt development aid and give Africa the opportunity to ensure its own survival.”
The distribution of billions in aid, although a good intention, is always only going to be a temporary band-aid to camouflage the real problem. In order for a country to prosper economically there has to be free trade, industrial innovation, and the elimination of government intervention in the economy. Billions more in foreign aid will only continue to hinder Haiti’s potential for economic growth.
“What policy makers need to focus on is creating the conditions—economic, social, educational, public health, political, and perhaps most importantly, cultural—necessary to put Haiti onto the first foothold of the development ladder,” adds Coclanis. “Haiti also lacks a culture that encourages a strong work ethic, the accumulation of capital, and the passing of assets on to future generations. Realistically, building an economic base for Haiti will take generations.”
“Aiding Haiti best requires a withdrawal of U.S. military and aid and a push for unilateral open borders and free trade,” Schaeffer explains. “Allowing Haitians to migrate freely to the United States is a direct and non-interventionist method of humanitarian relief.”
If world governments do not reevaluate their failed policies toward developing nations, Haiti, amongst others, will be destined to continue to drift downwards on the poverty slope. The Haitians definitely cannot resurrect their tattered country simply by their own efforts. Foreign nations should absolutely assist them in their efforts to develop industry and assist in teaching the Haitians how to produce different goods and services which can be traded in the free market, but we cannot do all the work for them. The Haitians have to have investment in their own economic future.