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Steve Forbes on a fix for Haiti's woes
Forbes - 29 Mar 2004
How to Help Haiti Help Itself
The U.S. should take several important steps to give Haiti a chance to break free from its history of tyranny, anarchy and perpetual poverty.
Tell the IMF to get lost, immediately. No representative of that agency should be allowed near Port-au-Prince. The IMF has done immeasurable harm to developing countries around the world, and Haiti has been a particularly hard-hit victim.
In the late 1980s and early 1990s Haiti's economy began to blossom. Foreign investment started flowing in. Textile factories and other businesses were opened. More and more people were getting decent-paying jobs (by Haitian standards), which enabled them to begin pulling themselves up the economic ladder. But the IMF plied its poisonous brew of budgetary austerity, higher taxe
s and debasement of the currency, particularly after Jean-Bertrand Aristide was restored to power in 1994.
The economic boom collapsed; inflation ensued. We should tell Haiti's new interim government that past debts will be forgiven if basic economic reforms are put in place.
Haiti should enact a flat income tax, somewhere in the range of 10% to 15%. The threshold for being liable for this levy should be set high enough to exclude most of the working population. A similar tax regime should be put in place for businesses. Haiti's economy would quickly flourish, and tax revenues would blossom.
To prevent politicians from plundering people via inflation, Haiti should make the U.S. dollar its legal tender, as several other countries, such as Panama, Ecuador and El Salvador, have done.
The government should also make it easy for people to set up businesses:
Fill out a simple form, and pay a $1 or $2 fee. Like most poor countries, Haiti has made it extremely difficult for entre
preneurs and merchants to start businesses that operate within the law.
Washington should also encourage Haiti to institute a formal, inclusive property rights system. This would turn the majority of that country's squatters into legal property owners, who would have the rights and protections that we in the U.S. and other Western nations take for granted. Remember that, historically, much of U.S. property law basically codified what people were already doing, i.e., it turned American "squatters" into "pioneers."
Haiti doesn't lack for entrepreneurial energy, as the vibrant and increasingly prosperous Haitian community in the U.S. attests. The country, though, badly needs institutions, monetary/tax laws and arrangements that will enable these entrepreneurial impulses to find a productive outlet at home.
It is profoundly in our interest--and obviously in Haiti's--that these changes come to pass. As businesses proliferate and incomes begin to rise, an emerging middle class will develop t
he civil customs and institutions that make a country less likely to fall into the grip of kleptomaniacal thugs. The nation can then finally achieve a destiny worthy of its heroic overthrow of its French slave masters and its dramatic defeat of Napoleon's troops two centuries ago.
(c) 2004 Forbes Inc.
By Steve Forbes, Forbes