Haitian officials knew the gas price hike would be unpopular. They did it anyway

Haitian officials knew the gas price hike would be unpopular. They did it anyway

Haitian officials knew the gas price hike would be unpopular. They did it anyway

Updated July 10, 2018 09:58 PM

As Haitian soccer fans were glued to their televisions Friday watching the Brazil-Belgium World Cup game, the Haitian government — on the state-owned TV channel — announced it was imposing new measures that leaders had been warned would be wildly unpopular: a huge jump in fuel costs.

Ten minutes into the game, the news started rocketing around social media: an increase of 38 percent on gas, 47 percent on diesel and 51 percent on kerosene, which is used largely by Haiti’s poor to light up their homes.. Though many diehard Haitian fans of the struggling Brazilian World Cup team stuck with the game to the end, five minutes after it ended with Brazil’s shocking loss, many took to the streets in anger, burning tires and blocking streets across the country.

If the government had counted on Haiti’s soccer obsession to tamp down reaction to the gas price hikes, it had badly miscalculated.

Less than 24 hours after the increases went into effect and violent demonstrations engulfed the nation’s capital of Port-au-Prince, Prime Minister Jack Guy Lafontant tweeted that the measure had been temporarily suspended. It had been part of a financial agreement the government struck with the International Monetary Fund, or IMF, that would have given the poor country access to badly needed money, $96 million in low-interest loans and grants initially. The IMF and World Bank, which also planned to loan Haiti money as part of the financial package, have not publicly said whether the violence will scuttle the deal.

By Associated Press
“They thought Brazil would win and while people took to the streets to celebrate, you would have some protests over the gas, but not like this,” said Sen. Patrice Dumont, noting there were other, less critical revenue streams the government could have tapped to address its budget deficit.

“[President] Jovenel Moïse failed to consider that above everything else, politics is not what’s in your head, it’s what you’ve done,” Dumont said. “There has been no improvement in anything in the country that has been the result of the government. …In his mind, he thinks he has done something serious. Up until now, he’s not living in reality.”

Haiti Fuel Protests.JPG
A tap-tap bus carries commuters on the second day of a national general strike in Port-au-Prince, Haiti, early Tuesday, July 10, 2018.
Dieu Nalio Chery AP
Haiti’s reality — double-digit inflation, a depreciating local currency, low purchasing power and little in the way of job creation — was the match that helped sparked three days of civil unrest that left at least three dead, businesses burned and pillaged, and international flights canceled. Some Haitians and tourists were stuck in businesses, police stations and other locations for as long as three days.

“These acts largely reflect the high level of frustration — even the despair — of the majority of our fellow citizens in the face of the deterioration of their living conditions for many years,” the country’s Economic Forum of the Private Sector said Monday while condemning the violence that forced layoffs of 673 employees at the Delimart grocery chain after three of its stores were looted.

“The situation results from a lack of leadership from the highest authorities of the Haitian state, including the president of the republic and the prime minister and his government,” the business group said, calling on President Moïse to ask Lafontant “to submit, without delay, his resignation and that of his government in order to offer a way out of the current political stalemate.”

The ultimatum followed a similar one issued by both the Senate President Joseph Lambert and Lower Chamber of Deputies President Gary Bodeau. In a Monday afternoon meeting, both lawmakers made their positions clear, Bodeau said: The Haitian people had lost confidence in the government. Lafontant has to go.

“I told them not to raise the price of gas,” Bodeau said, recalling that he and others warned Moïse. “I said, ‘If they do it, the country will burn.’ The communication campaign hadn’t worked. They didn’t talk about it enough. They said they had taken all of the necessary steps.”

Guyler C. Delva
Le président a une vision extaordinaire pour ce pays et c’est pour moi un énorme plaisir d’avoir eu l’occasion de travailler avec lui. Cependant, j’ai le regret d’annoncer que je lui présenterai ma démission dans les prochaines heures.

On Tuesday, as a relative calm returned to the capital and blocked streets were cleared, Lafontant and his government remained in power. In a bizarre episode, however, Communication Minister Guy Delva announced — and then retracted — his own resignation on Twitter, saying he decided to stay at the request of the president.

During a 40-minute meeting between Moïse and the economic forum on Tuesday, Haiti’s business leaders reiterated their position: the prime minister had to go before parliament fires him. Haiti’s Lower Chamber of Deputies has scheduled a no-confidence on vote on Lafontant’s government for 10 a.m. Saturday.

Lafontant has not commented publicly about the public pressure to fire him. On Tuesday he issued a statement saying the crisis had passed and touting Moïse’s Caravan of Change, a public works initiative that promises to bring 24/7 electricity to Haitians and improve roads.

“The incidents that occurred in response to the announced decrease in fuel subsidies took place mainly in the metropolitan area of Port-au-Prince and have been brought under control,” he said. “Normality has been restored. Travel to and within Haiti — for business or pleasure — is safe.”

The U.S. State Department, meanwhile, continues to issue a Level 4 travel alert for Haiti, telling travelers Tuesday: “Do not travel to Haiti due to civil unrest and crime.” The U.S. Embassy advised its citizens to go to the airport only with a confirmed seat on a flight, now that U.S. carriers have resumed flying after flights were canceled over the weekend. The embassy continued to tell employees to shelter in place after authorizing voluntary departures of non-emergency U.S. government personnel and their families.

Haiti’s government had been planning to impose the price increase at least since February, when it signed the agreement with the IMF to get access to the $96 million in donor funding, plus millions of dollars more in grants and zero-interest loans over the next two to three years under another IMF program.

But while officials pitched the hike as a requirement of the IMF agreement, they failed to build public trust or introduce a series of measures that had been discussed with the IMF that might have made the unpopular measure more palatable.

Case in point: Fare hikes for public transportation were announced as a result of the increase in fuel costs but other measures, such as transportation vouchers intended to blunt the impact of higher bus fares, weren’t mentioned.

Lafontant noted in his Tuesday statement that Haiti has the lowest fuel prices in Latin America for a non-oil-producing country. Next door in the Dominican Republic, gasoline is 43 percent more expensive.

According to government figures, the difference between the real price of gas and the subsidized price that Haitians are used to is about $160 million, money that could be used for sewers or to pay police officers, who didn’t get their June salaries until a day before the fuel hikes were announced.

During Friday’s announcement of the gas price increase, Finance Minister Jude Alix Patrick Solomon attempted to make the government’s case for the hike. Only 25 percent of Haitians had actually benefited from the artificially cheaper prices, he said, which had created a heavy burden on the country’s cash-strapped economy. But Haitians weren’t listening. They were watching the game.

Former Haitian Prime Minister Jean-Max Bellerive said he didn’t anticipate the violent protests that followed. “I was shocked,” he said. “In my mind, I thought [the government] was ready.”

Moïse, a political newcomer who became president after a re-run election, overestimated his political clout, Bellerive said.

“Because he did not have a strong, structured opposition in front of him, he thought he had the political capital to impose an unpopular measure,” he said.

“In every country, raising the price of gasoline is a very sensitive measure and even more so in Haiti,” Bellerive added. “It’s a point of contention in the political discussion. It’s not just an economic decision.”

As crowds looted businesses Saturday and set cars ablaze outside two luxury hotels, shocked Haitians remembered Moïse’s words from 2016, when he was still a presidential candidate, handpicked by former President MIchel Martelly. At the time, the interim president, Jocelerme Privert, had proposed raising fuel prices.

Moïse responded harshly, calling Privert “someone who hates the people, who doesn’t know the people’s misery, who wants to increase the price of the gas.”

Bellerive, who sometimes bumped heads with foreign donors trying to impose difficult measures on Haiti, said Moïse’s administration is not the first to face pressure from the IMF over recovering lost revenue on petroleum imports. Bellerive said he faced similar pressure when he was late President René Préval’s prime minister, and did raise pump prices as Préval handed power over to Martelly.

Bart Oosterveld, director of the Global Business and Economics at the Atlantic Council, said while the reaction in Haiti was severe, it’s not surprising.

“This is a global phenomenon. A lot of people rely on the subsidies to make their own household budgets work,” Oosterveld said. “It tends to provoke a reaction.”

Oosterveld said he believes that despite the government’s reversal on the price hike, he believes the IMF “is very interested in making this work.”

“This was a condition,” he said of the fuel hikes. “They wouldn’t just shut off the valve, but would work on an interim solution… or finding some other way to make budgetary adjustments. As long as the government is trying to constructively solve that, I think negotiations can be ongoing.”

A tap-tap bus carries commuters on the second day of a national general strike in Port-au-Prince, Haiti, early Tuesday, July 10, 2018. Dieu Nalio Chery AP


July 15th, 2018

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