The Washington Monthly - Assassination of Haitian Leader Highlights Nation’s Monopoly-Dominated Economy

Garphil Julien highlights how the killing of President Jovenal Moïse took place against a backdrop of elite power, anti-competitive policies, and the U.S. failing to create open markets.

The assassination of Haitian President Jovenel Moïse in his home near the capital city of Port-au Prince earlier this month rocked the already beleaguered Caribbean nation, which is the poorest in the Western Hemisphere and has a history of political violence

According to Haitian authorities,  mercenaries stormed the president’s gated compound and shot and killed the 53-year-old former businessman, seriously injuring his wife, Martine. Moïse, a member of the center-right PHTK party, was a polarizing politician, accused in a 600-page report prepared by a panel of judges that he embezzled foreign aid from Venezuela. Moïse came to power as the chosen successor of President Michel Martelly, a popular musician who goes by the stage name Sweet Micky. He won office in the heavily disputed 2016 election amid claims of voting irregularities, intimidation, and violence.

Now more violence threatens to engulf the Caribbean nation of 11 million people, with leaders of the nation’s powerful criminal gangs calling for civil war. Adding to the chaos, Moïse has no clear or elected successor because the current Prime Minister’s term was set to expire this week, and its supreme court president died of Covid-19 days before the assassination.

The power vacuum and dangerous instability in the Francophone nation result from many factors, but the American media ignore big ones, including state capture by elites, a grim monopolism that characterizes the country’s economy, and neoliberal policies imposed by the United States and international institutions. These factors have played a significant role in creating a country characterized by a 14 percent unemployment rate and 60 percent of the population in poverty. Regardless of how the assassination unfolds, if Washington is serious about helping to stabilize Haiti’s government and lift its citizens out of misery, it should use its aid and influence to promote economic democracy through competition and anti-monopoly enforcement.

In Haiti, the wealthiest one percent controls almost half of the country’s wealth. Just over 600 families control 345 corporations. Groups of elite families have monopolistic control of broad swaths of industries through conglomerate structures. Three major banks—Unibank, Sogebank, and BNC—control 83 percent of Haiti’s banking assets and 75 percent of its loan portfolio. An astounding 70 percent of the loans are in the hands of a mere 10 percent of borrowers. In telecom, Digicel has an 85 percent market share in subscribers and acquired the second-largest provider Voilà in 2011. Even in the food industry, supermarkets and prepackaged foods are monopolized by few businesses. This has contributed to food prices 30 to 77 percent higher than other countries in Latin America. Some 38 percent of the import value in areas such as petroleum, food, and consumer goods, are imported into highly concentrated markets.

Furthermore, these companies engage in collusion and non-competitive policies by offering different products that don’t overlap, according to a 2018 report by the Famine Early Warning System, a leading provider of famine information created by the U.S. Agency for International Development in 1985.

The lack of competition in many industries means inputs in upstream and downstream markets for products are not priced competitively. It also hinders efficiency and productivity in the value chain. In Haiti, monopoly is a major deterrent to development because it creates barriers to entry and sustains anticompetitive practices. Many of these companies benefit from low import duties, import monopolies, tax write-offs, and the awarding of government contracts and state loans.

Read the full article on The Washington Monthly here.