Financing infrastructure is a challenge for any government, and even more challenging for developing countries like Haiti where competing needs far outstrip available funds. Six years after the devastating earthquake of 2010, much of Haiti remains without clean water, sanitation, electricity, and paved roads despite a massive infusion of nearly 5 billion dollars from international donors. Compounding Haiti's ability to build needed infrastructure is the real or perceived rampant government corruption that deflects money from needed development projects.
Public desire to see the state invest in infrastructure projects and concurrent concerns with rampant corruption have shaped the public's response to a covert presidential decree carving a large portion of the island of La Gonave for international investors. This last minute presidential decree was enacted with no public announcement, no public input, and signed during the president's last days in office. It became known only after the president had left office. The covert nature of the deal led to widespread denunciation that Martelly sold Haiti's largest island while others hailed the secret deal as an effort to attract investments.
With barely a month left to his mandate, on January 7th2016, Martelly published in Le Moniteur, the government's official newspaper, the controversial decree to transform Haiti's largest island, La Gonave into a tax haven for individuals, investors, companies, banks, and institutions seeking high level financial services. The ambitious project which must first be approved by Haiti's Legislature, seeks to establish infrastructure for a financial district or center on 10,000 hectares (the size of Manhattan) on La Gonave, an offshore island with 100,000* inhabitants. The center's initial 3 year starting budget would come from the public treasury. The center would raise revenues through the sale of financial products and services, the granting of concession rights, the leasing/ renting of property, and the granting of licenses. As a financial center, it would essentially function as a bank to facilitate investments. But the decree also gives the center the authority to function as a city hall, making its own rules independent of the existing government structure on the island.
Gulf of La Gonave
Gulf of La Gonave
The obscurity around the enactment of the decree provoked suspicion of malfeasance and some political leaders have accused Martelly of abusing his executive authority and of trying to sell La Gonave to foreigners. This is in part because the decree allows foreigners to gain residency status in a tax free zone with privileges not given to locals. The accusation that the president is trying to sell La Gonave is not without basis, considering that a video has been circulating on social media for the past 6 years showing the detailed plans of Global Renewable Energy Ltd, a company that was seeking to develop the island. It remains unclear if the last minute effort by the president during the last weeks of his term constitutes the paving of the way for projects like that of Global Renewable Ernergy Ltd.
Before its enactment, the 34 page decree was not discussed with the Haitian population nor with the residents of La Gonave whose lives it impacts the most. Up until the announcement of the decree, La Gonave, a part of the West Department of Haiti which includes the capital city of Port-au-Prince had received little government investment and attention. While the decree places La Gonave in the spotlight, it makes little mention of the population's need for essential public services such as water, energy, sanitation, roads, security, education, and health care. The decree exposes a dissonance between what the people need and what the government wants to provide. When asked how the people of La Gonave will "digest" the decree, an economist on the show Le Point of Radio Tele Metropole explained that a communication campaign will be launched to inform the population about the decree.
As news of the La Gonave decree begins to spread throughout Haiti, the population must now ponder what it all means, whether it offers new opportunities or treacherous pitfalls. Hopefully the new government will see to it that a Creole translation of the decree is made available. While it is true that Haiti must find innovative ways of financing its development, it is not yet clear that turning part of its territory into a tax haven (zone franche) and displacing local residents is in the best interest of the general population, or in the best interest of those displacing the locals. It is also unclear if major international businesses will want to incorporate in an area where land was acquired in an ethically dubious manner. A previous decree which claimed all of Haiti's islands as public utilities to be set aside for tourist development was challenged by residents of Ile-a-Vache who demanded a repeal of the decree and compensation when the government tried to displace them from their homes.
In an International Conference on Financing for Development which took place in Ethiopia in July of 2015, organizers offered several principles for financing development. Among their recommendations were:
To rely primarily on domestic resources
To make the development cohesive and nationally owned
To provide good governance with democratic and transparent institutions that are responsive to the needs of the people
The La Gonave decree meets none of these criteria. Instead of relying on Haitian resources, the government seeks money from wealthy foreigners who are trying to dodge their tax responsibilities at home. Yet, the Haitian Diaspora sends 2 billion dollars in remittances annually to Haiti. A tax anywhere from 5% to 10% on these remittances would yield annual revenues of anywhere from 100 million to 200 million dollars. That money could go a long way in Haiti and leave the country less beholden to foreign interest.
The La Gonave decree is neither cohesive nor nationally owned. Its does not directly address the needs of the local population. In fact, it is willing to push the local population aside to carve room to welcome foreigners who have always been welcomed to buy land in Haiti without having the government bulldoze local residents aside.
And finally, the manner in which the La Gonave decree was enacted makes a mockery of democratic governance and transparency. The decree was published in a newspaper in French in a country where 90% of the population neither speaks nor reads French. It was not published for all to see, nor broadcast for all to hear. It wasn't even a subject of debate on the island of La Gonave where residents did not know that their government was signing a decree that could evict them from part of the island.
*The population of La Gonave was estimated to be 79,188 people in 2009 according to Wikipedia.