Haiti – plus ça change
Dr Peter Sollis (former Senior Advisor – Haiti Response Group, Inter-American Development Bank)
Just over two weeks before the February 7, 2017 presidential inauguration, a judge began investigation of a report that president-elect Jovenel Moise may have laundered dollars through 14 accounts over the 2007 to 2013 period and, in a separate claim, that he received special treatment to get business loans from the Haitian Popular Bank, a state bank.
The investigation, launched in 2013, lay dormant until four opposition senators demanded information on the findings. They have also demanded a delay in the swearing in until the judicial investigation is completed and there is clarity on the matter. They argue that a tainted president will raise concerns about Haiti’s ability to root out corruption as well as affect banking transactions between US and Haitian banks.
Jovenel Moise who appeared voluntarily without his lawyer before the investigating judge, calls the allegations a political smear. His political allies accuse the financial crimes unit (UCREF), a key government agency, of a political witch-hunt, especially since confidential reports were leaked during the campaign itself.
The case is unlikely to be concluded before the inauguration date, though it is not expected to derail Moise’s swearing in. It does however reflect Haiti’s political divisions and underscore the unpredictability of its politics.
It was only on January 4, 2017 that Haiti’s Provisional Electoral Commission (CEP) declared that Jovenel Moise of the Parti Haitien Tet Kale (PHTK) had won the November 2016 presidential election. The inevitable street protests in Port-au-Prince could not take away the personal triumph the result represented for Jovenel Moise. Nor could it mask the electoral earthquake associated with the round defeat of two protégé presidential candidates.
Jovenel Moise who topped the list in disputed October 2015 presidential elections with 33.8% of the vote, won in 2016 with 55.7%; a margin wide enough to obviate the need for a runoff. With no government experience but a clear vision about Haiti’s future, backed by a well-run campaign, Moise saw his popularity bounce between 2015 and 2016 with a 17% increase in his total vote.
The electoral machinery did not favour Jovenel Moise. It was interim President Privert, a staunch PHTK opponent, who appointed the nine CEP members, responsible for arranging the November 2016 elections. Expectations were low since these were the first elections in more than a decade that were largely Haitian organised. Fears about widespread violence did not materialise. Indeed, the 2016 vote was more peaceful than that of October 2015.
The authorities were also vindicated in their decision to continue with the elections despite extensive hurricane-damage. An impressive effort readied voting infrastructure in disaster-hit departments to ensure voters could participate. Irregularities did occur. Some voting centres opened late. Poorly trained electoral workers also denied some voters the opportunity to vote though they were registered.
The losing candidates were hard pressed to claim the electoral machinery had not worked. Indeed, a major defining factor in the election was how the different campaigns responded to the suffering caused by Hurricane Mathew that hit Haiti on October 6, 2016.
Jude Celestin’s well-resourced campaign played to his past reputation as a builder of things in the two administrations of President Rene Preval. This point was literally driven home by the deployment of fleets of tractors to clear debris blocked roads. Celestin’s popularity surged with his offer to rebuild the bridge at Petit-Goave. His standing then eroded under questions about how he had a bridge available and why he was campaigning with equipment from the National Equipment Centre (CNE), where he had once been Executive Director.
Celestin’s clarification, that he only knew where a CNE bridge was stored and as an engineer he could help to install it, did not convince. The damage was done. His rivals seized the opportunity to paint him as a dishonest politician using state equipment to benefit politically from a natural disaster at the people’s expense.
As in 2015 Jude Celestin finished second. But this time around his support collapsed. Having received 392,782 votes in 2015 he polled only 208.837 in 2016, a 47% drop in support. This loss, after the 2010 presidential election defeat, means that Celestin’s chance to be President has likely passed, despite his continued party control.
Dr Maryse Narcisse, the Fanmi Lavalas candidate secured a poor fourth place. As the first Fanmi Lavalas candidate to contest presidential elections since 2000, Narcisse expected her numbers to benefit from get-out-the vote campaigning in Lavalas strongholds, such as Delmas 3, by Ex-President Aristide. Fanmi Lavalas also tried to take electoral advantage of post-hurricane devastation. When rice distribution in Les Cayes got out of hand, Lavalas volunteers were filmed beating back people with sticks and throwing them off trucks. The outcry when the videos went viral overshadowed the former president’s efforts and the total vote for Dr Narcisse between 2015 and 2016 shrank by 12% to just over 96,000.
Whether, as some suggest, the President-elect lacks a mandate because of deepened political divisions and instability misses a central point. For every Narcisse voter six people voted for Jovenel Moise and for every Celestin voter, nearly three voted for the president-elect, according to the election results. The close association of these two defeated candidates to ex-Presidents Aristide and Preval, respectively, the duo dominating political life over the twenty year period from 1990 to 2010, shows their weakening sway over the election politics.
Moise, the protégé of ex-President Martelly, headed a handsomely financed campaign conceived by the same firm, Ostos and Sola, which guided Martelly to the Presidential Palace. Already popular in the north Moise’s campaign focused on the south, stockpiling water and food there in anticipation that Hurricane Mathew would hit Haiti. Moise’s campaign was the first organisation to distribute relief in rural areas, using local mayors the local counterpart designated by central government. Though criticized for handing out supplies with PHTK labels, Moise nevertheless showed he got things done.
Known affectionately as Neg Bannan Nan, Moise campaigned hard on rooting out corruption and strengthening Haitian government watchdogs. He offered a lyrical vision of how a deforested country could become a banana-producing republic through a promise to “put the rivers, sun, the soil and the people to work”. His own modest start in life and reputation as a successful entrepreneur who started auto parts, purified water and banana businesses, provided the credibility behind his electoral slogan of se sel vre chanjman (the only true change).
Whether the president-elect can bring change, always a big ask, has got even more difficult with the money laundering and favouritism allegations. As a man largely hewn in the provinces and a political newcomer, Moise has now experienced the bruising nature of national politics in Port-au-Prince. His calculation about how to be his own man when forming his government has become more complicated. What distance does he put between him and the group around Martelly, some of whom were rumoured to have campaigned for Celestin? Also what will be the understanding about, and with, Sophia Martelly? When she ran multi-million dollar education and social programmes she redefined the role of first lady, kindling an ambition beyond being known an ex-first lady as shown by her attempt to stand for president.
The president-elect also has a new parliament to work with. Whether parliament can move beyond its normal ineffectiveness is a big question. A priority is to get parliamentary business working again after a two-year hiatus created by the failure to hold legislative elections at the end of 2014. In the newly reconstituted parliament, the PHTK, Moise’s party, and its allies, now holds putative majorities in both the assembly and senate. Yet parliamentary approval of a legislative programme of a government of the same party is by no means certain given deep-rooted traditions of parliamentarian individualism and weak party discipline.
If getting it right on his emergency response to Hurricane Mathew was instrumental to winning the election, as President, Moise needs to establish his governmental credibility through an equally astute set of longer-term actions for relief and recuperation. Here trusting his entrepreneurial instincts might be advantageous, particularly if donor projects supporting private sector development can be rejigged to recapitalise small and medium enterprises across the south.
A much-talked about budget revision might only free-up minimal funds for hurricane relief. As Haitian budgets are largely administrative there is little room for shifting resources around. Also, price subsidies on petroleum products at around US$400 million per annum, and transfers to cover the operating deficit of Electricite d’Haiti (EDH), around US$150 million annually, eat up around 30% of the budget.
A president with diminished credibility might be less able to address long-standing impediments to growth. And, if one agency epitomizes Haiti’s structural problems it is EDH. All attempts since the 2010 earthquake to reform and modernize EDH’s financial management and administration have stalled. This failure is a major contributory factor to donor fatigue, most recently evidenced by the underwhelming response to the UN’s Hurricane Mathew emergency appeal.
Though interim President Privert, as well as EDH itself, have belatedly recognised the need for change, their recent pronouncements fall short and lack consistency. The newly completed Tabarre electricity sub-station and internal distribution circuits in Port-au-Prince, built with donor money, have improved the capital’s energy supply. Large industrial, commercial and institutional consumers have returned to EDH’s network. In his August 2016 address at the inauguration of the Tabarre sub-station, President Privert reminded his audience of the improved service to exhort customers to pay their bills.
Later that same day, interim President Privert inaugurated the first of three new donor-financed turbines at the Peligre hydroelectric plant. His message there was significantly different. He did not speak about the problems of stealing electricity and non-payment of bills. Yet any traveller taking the road from Mirebalais to Peligre can easily see how each electricity post bristles with illegal connections. Local consumption has consequently soared to take almost half Peligre’s new production, nearly overloading the distribution network and increasing the risk around the plant’s integrity. Only around 30% of local customers pay for electricity consumed.
Legalising connections and getting consumers to pay is both a commercial and technical necessity as well as a political problem. Privert’s silence at Peligre acknowledges the entitlement felt by those people near the dam who contend that because their water is generating the electricity they should not pay.
Meanwhile, EDH is running TV advertisements about the completion of Tabarre, the internal circuits in Port-au-Prince and the first Peligre turbine. These too encourage customers to pay for their electricity, offering those with past due bills a discount deal. Such an approach seems to introduce perverse incentives unlikely to change current behaviours – why pay today if when you pay later you pay less?
As Peligre turbine replacement advances, a second and then, a third unit will be brought on line. This power will be the cheapest produced in Haiti, though contracts with independent power producers (IPPs) restrict when and how it can be fed into the system. This is contrary to universal energy planning practices that establish that the cheapest electricity is used first.
2017 will be a more sombre and uncertain year for the Haitian economy. The World Bank forecasts a 0.6% contraction in GNP. Inflation, now at around 12%, will continue to devalue the gourd-dollar exchange rate, which is widely watched, and popular, indicator of economic health. Petro-Caribe that financed many post-earthquake infrastructure projects will not again reach its post-earthquake funding apotheosis. Other donor funding has largely returned to normal levels. Meanwhile, uncertainty surrounds the Haiti policy of the new US administration.
In constricted economic circumstances making EDH solvent is more important than ever. Donors now finance the capital investments required because of EDH’s past inability to maintain its plant. It is folly to assume that donors will continue this effort indefinitely. Improving EDH’s technical and maintenance capabilities goes hand in hand with establishing its commercial viability and financial sustainability. As electricity is sine qua non for any development strategy the government has to take the lead in fixing how Haiti produces, transmits and distributes electricity. Past experience shows that squeezing out systemic distortions is a matter of political will at the highest level. This will be a true test of the mettle of the se sel vre chanjman.