The Louverture Investment Plan is Missing Crucial Reforms | Opinions
By: Xiomara Jean-Louis, Haiti Policy House Researcher
On May 17th, 2024, three U.S. Congresswomen proposed the “Louverture Investment Plan” (L.I.P.), a 10-year-long, $50 billion development plan aimed at recovering the Haitian state, government, economy, and more.
The L.I.P., when taken at face value, is an excellent idea. Many of the Haitian diaspora have called for similar “Marshall Plans” for Haiti. (Examples can be found here, here, and here.) It must also be said that the Plan is in its infancy, having just debuted and pending revisions in a pugnacious Congress. However, the current details of the Plan warrant scrutiny. The Plan’s stipulations, in my opinion, are hampered without reparations, including the return of Navassa Island, and broader reforms to the international financial system.
The Plan Cannot and Should Not Replace Reparations
First, the Plan includes a symbolic nod to France’s infamous and catastrophic ‘ransom’ from Haiti for its independence:
“Whereas, in 1825, Haiti was forced to pay a ‘‘ransom’’ to France for its independence, amounting to at least $21,000,000,000 in current value.”
This rings hollow without an accompanying commitment to return the money. The L.I.P. doesn’t return the full value of the ransom, nor does it meet the principle of reparations without France itself footing the bill. The U.S. has proven hostile to the idea, insofar as to work with France to depose President Aristide over his demand for reparations in 2004, making this sentiment platitudinous.
Indirect reparations are also non-starters. U.S. officials have refused to consider paying climate reparations for its outsized role in driving carbon emissions, and they have pushed back on having richer countries become the primary funders of ‘loss and damage’ funds for poorer nations afflicted with adverse weather events—both of which would benefit Haiti as it suffers flash floods, crop die-offs, and other effects of climate change. Since then, the U.S. has pledged $17.5 million but quickly clarified amidst international criticism that the nation’s position has not changed. The U.S. will not admit liability, fault, or commit to any form of reparations.
Reparations must never be omitted from the conversation. Haiti remains impoverished and struggles to invest in necessary public services and development, due in part to a $5 billion of public debt siphoning off the equivalent of approximately 28.5% of the GDP. Debt relief is difficult to acquire, especially for a state with a growing, but nascent, government. Reparations are a feasible and immediate avenue for relieving Haiti of its financial crisis and investing in Haitian growth, as the L.I.P. seeks to do. The L.I.P.’s text is appreciable but falls short of changing the U.S.’s position on reparations and therefore hinders the Plan’s potential.
Haiti GDP ($bn)
Now, obviously, the U.S. is not France, so it cannot pass legislation forcing France to provide reparations. However, the U.S. can do two things:
Return the island of Navassa, which was Haitian property until the U.S. seized it during the mid-19th century Guano runs and to which the U.S. continues to hold, and return the minimum of $10 billion in profits gained;
Return the $500,000 of gold pilfered from Haiti’s National Bank in 1914 and formally adopt a policy position that pushes the French government toward reparations of some form.
The former is wholly within Congress’s power and requires political support for Haiti which, as evidenced by this first-of-its-kind Resolution, seems to be improving. The second option is, perhaps, more tenable than outright reparations, since it was taken from Haiti under gunpoint. The latter is significantly more difficult given the U.S. government’s own hostility to reparations and France’s recent strike-down of Martinique’s case for reparations. However, a forceful change of position could be a galvanizing first step in reinvigorating the fight for reparations.
Establishing Fiscal Sovereignty is a Prerequisite to Success
Secondly, the Plan intends to reform U.S. foreign aid, but not the larger international financial system:
(6) acknowledges the need to improve United States financial assistance to Haiti by reforming the foreign aid system and ensuring foreign assistance is being distributed to Haitian-led communities;
The set-up of the international financial system predisposes Haiti for failure and dependence, not success. The primacy of the U.S. dollar in all international transactions subordinates developing nations to American monetary policy. As political economist Susan George wrote in A Fate Worse than Debt (1988), the Federal Reserve’s raising of interest rates balloons the interest payments of impoverished governments seemingly overnight. These increases appreciate the value of the dollar relative to other currencies, lessening their purchasing power and cyclically exacerbating poor nations’ debt burden. In Haiti, the dollar’s appreciation has sunken the gourde’s value amidst increasing national debt and has had that exact effect.
Similarly, in cases of financial distress, the World Bank or I.M.F. steps in and provides loans conditioned on sets of economic reforms that limit public services. These reforms have historically destabilized Haiti and recently resulted in riots in 2022, a governmental shake-up in 2018, and widespread protests in 2014. Despite decades of outcry, these institutions have doubled down and continued to promote austerities. Haiti can’t eke by on remittances and the L.I.P. alone, meaning these bodies will likely intervene to the detriment of average Haitians.
There are pathways to a just international financial system, like overhauling the credit-rating system, redistributing unused I.M.F. Special Drawing Rights, encouraging the use of local-currency settlement systems, and even amending the I.M.F.’s founding Articles of Agreement. Advocates have also proposed the U.S. work to boost the gourde’s value and petition the World Bank and I.M.F. to cancel outstanding debt. These provisions, despite the U.S.’s leverage as a governor and main contributor to these institutions, are missing from the L.I.P., dooming the Plan to the same plight as a fish swimming against an overpowering current.
The pathway to international finance reform may seem daunting, but there are opportunities available that the U.S. government has yet to seize. During the summer of 2022, Barbadian Prime Minister Mia Mottley proposed the Bridgetown Initiative for the Reform of the International Financial Architecture, which has since been updated. This spurred the formation and hosting of the 2023 Summit for a New Global Financing Pact, which U.S. Secretary of the Treasury Janet Yellen attended, but there hasn’t been much movement since. The L.I.P. provides a prime opportunity to restart these discussions and strike while the iron is hot.
All of us in the diaspora want the L.I.P. to succeed, but I struggle to see its viability without these additions. The L.I.P. must do more to challenge the structural challenges inhibiting Haiti’s success, or else its other priorities will fall short.
Haiti Policy House is a not-for-profit institution focusing on Haitian public policy issues. Its research is nonpartisan. Haiti Policy House does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
© 2024 by Haiti Policy House. All rights reserved.
Readers like you made this analysis possible. Thank you for your donations. We look forward to your continued support! Donate Here